BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In 2021, we spent about $533 million in operating expenditure and $1,660 million in capital expenditure on ACG activities.
During the year, the Azeri Central East (ACE) project progressed according to the plan along with the other bp-operated activities.
The final major equipment packages were delivered to Baku at the end of the year completing the shipment of all equipment required for the project.
Fabrication activities on the topsides and drilling facilities continued at the fabrication yard in Bibi-Heybat. This included progressing the pipe erection and hydrotesting, cable pulling and testing. All modules of the living quarters were successfully installed on the topsides followed by the commencement of integration and internal hook-up activities. In addition, the upper deck panel was installed on the topsides, the helideck was lifted and installed on the living quarters. The topsides and the drilling module mechanical completion handovers progressed as planned. The drilling module commissioning at grade has already commenced and will continue in 2022 ahead of the jack and skid operation.
At the Heydar Aliyev Baku Deepwater Jackets factory (BDJF), the jacket fabrication continued with the final roll-up of the leg frames completed and assembly of the jacket towers commenced. The pipelay barge ‘Israfil Huseynov’ started the pipelay of the ACE oil and gas lines.
The offshore installation works associated with the spare power scope on the East Azeri platform also progressed during the year.
At the end of the year, the ACE project reached the 65% progress milestone. The project construction activities are currently at peak and involve about 5,500 people across Baku, Europe and the UK, with the majority of them being Azerbaijani nationals.
All engineering, procurement and fabrication works remain on track to support first production from the ACE project in 2023.
During the year, ACG continued to safely and reliably deliver stable production. Total ACG production for the full year was on average about 458,000 barrels per day (b/d) (about 167 million barrels or 23 million tonnes in total) from the Chirag (27,000 b/d), Central Azeri (109,000 b/d), West Azeri (116,000 b/d), East Azeri (76,000 b/d), Deepwater Gunashli (86,000 b/d) and West Chirag (44,000 b/d) platforms.
On 18 September 2021, the ACG field reached 4 billion barrels of total oil production since start.
As part of the ACG annual work programme, two planned maintenance programmes (turnaround - TAR) were successfully implemented on the ACG platforms in 2021 – on West Azeri in the second quarter and on Chirag in the third quarter.
At the end of 2021, 135 oil wells were producing, while 29 were used for water and eight for gas injection.
Drilling and completion
In 2021, ACG completed 10 oil producer and four water injector wells.
During the year, ACG delivered an average of around 9 million cubic metres per day of ACG associated gas to the state of Azerbaijan (3 billion cubic metres in total), primarily at the Sangachal terminal but also to SOCAR’s Oil Rocks facility. The remainder of the associated gas produced was re-injected for reservoir pressure maintenance.
In 2021, oil and gas from ACG and Shah Deniz continued to flow via subsea pipelines to the Sangachal terminal.
The daily capacity of the terminal’s processing systems is currently 1.2 million barrels of crude oil and condensate, and about 81 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is around 100 million standard cubic metres per day.
In 2021, the Sangachal terminal exported about 231 million barrels of oil and condensate. This included about 200 million barrels through Baku-Tbilisi-Ceyhan (BTC) and around 31 million barrels through the Western Route Export Pipeline (WREP).
Gas is exported via the South Caucasus Pipeline (SCP), the SCP expansion system and via Azerbaijan’s pipelines connecting the terminal’s gas processing facilities with Azerigas’s national grid system.
On average, around 61 million standard cubic metres (about 2,166 million standard cubic feet) of Shah Deniz gas was sent from the terminal daily during the year of 2021.
In 2021, BTC spent more than $119 million in operating expenditure and more than $34 million in capital expenditure.
On 12 December 2021, BTC reached a significant milestone by achieving 500 million tonnes of oil export in total from the Sangachal terminal near Baku across Azerbaijan, Georgia and Turkey to Ceyhan.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of 2021, it carried a total of 3.77 billion barrels (more than 502 million tonnes) of crude oil loaded on 4,939 tankers and sent to world markets.
In 2021, around 200 million barrels (about 26.4 million tonnes) of BTC-exported crude oil was lifted at Ceyhan loaded on 280 tankers.
The BTC pipeline currently carries mainly ACG crude oil and Shah Deniz condensate from Azerbaijan. In addition, other volumes of crude oil and condensate continue to be transported via BTC, including volumes from Turkmenistan, Russia and Kazakhstan.
In 2021, Shah Deniz spent more than $2 billion in operating expenditure and around $680 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
In 2021, Shah Deniz celebrated the 25th anniversary since the signing of the Shah Deniz Production Sharing Agreement (PSA). The PSA was signed on 4 June 1996 between SOCAR and a consortium of foreign companies. It was ratified by the Milli Majlis and became effective on 17 October the same year. The project is the second after ACG largest foreign direct investment made in Azerbaijan and as such it has further strengthened the country’s economy. The Shah Deniz 25th anniversary marked an important milestone in the new history of Azerbaijan’s oil and gas industry.
During the year, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan (to Azerkontrakt), Georgia (to GOGC), Turkey (to BOTAS), to the BTC Company in multiple locations and to buyers in Europe.
In 2021, the field produced around 23 billion standard cubic metres (bscm) of gas and more than 4 million tonnes (around 34 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.
The existing Shah Deniz facilities’ production capacity is currently about 72 million standard cubic metres of gas per day or more than 26 bcma.
The East South flank started up safely in the second quarter of 2021 and later in the year the flank reached its full production rates. As a result, in July 2021, the daily production rates of the Shah Deniz Bravo platform reached the Shah Deniz Alpha rates for the first time.
On the West South flank, the pipelay barge Israfil Huseynov completed the subsea pipeline construction activities. The scope was delivered ahead of schedule with the barge achieving its best ever performance and highest productivity. This allowed to commence subsea pipelaying activities on the East North flank in 2021, originally planned for the second quarter of 2022.
Overall, all West South flank subsea installation activities are progressing on schedule for the production start-up planned for the middle of 2022.
In 2021, the Shah Deniz 2 project also started up production from the 5th well on the North flank. This marked the first in-fill well tie-in to a live subsea operating manifold in the Caspian. The entire activity was completed safely, without any interruption to the existing producing wells on the flank.
In 2021, the Shah Deniz Alpha platform rig was on warm stack.
The Istiglal and Maersk Explorer rigs have already drilled 21 wells in total and completed 19 out of those for the Shah Deniz 2 production and subsequent ramp-up. The completed wells include five wells on the North flank, four wells on the West flank, four wells on the East South flank, four wells on the West South flank and two wells on the East North flank. One well on the West South flank and one well on the East North flank were drilled to the final depth and suspended.
In 2021, the SCP spent around $54 million in operating expenditure and more than $12 million in capital expenditure in total.
The SCP has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey. The expanded section of the pipeline commenced commercial deliveries to Turkey in June 2018 and to Europe in December 2020.
During 2021, the daily average export throughput of the SCP was 48.5 million cubic metres of gas per day.
On 1 August 2021, the transition of the technical operatorship of the South Caucasus Pipeline Company (SCPC) from BP Exploration (Shah Deniz) Limited to SOCAR Midstream Operations LLC was finalized. The transition process which started in March 2020 was successfully completed in July 2021. Despite the challenges caused by COVID-19, bp and SOCAR worked in close collaboration to effectively implement all the aspects of the process.
The transfer of the technical operatorship was carried out in fulfilment of the obligations undertaken in the revised SCPC Pipeline Owners’ Agreement, signed in December 2013 as part of the Final Investment Decision on the Shah Deniz Stage 2 and South Caucasus Pipeline Expansion (SCPX) projects.
On the Shafag-Asiman offshore block, the drilling of the first exploration well was completed in March 2021 to the base of the Fasila reservoir to a depth of 7,189 metres.
The well encountered gas condensate resource in some of the penetrated reservoirs. Post-well analysis of the data received during the drilling is currently ongoing. This analysis is required in order to evaluate the hydrocarbon discovery and plan the next stage of exploration activities.
In the Shallow Water Absheron Peninsula (SWAP) area, the drilling of the first exploration well in the North Khali prospective area was completed in December 2021. The well was abandoned as per the original design and plan and the well results are currently being analyzed. The second exploration well was spudded on 11 December 2021 in the Bibi-Heybat area. Drilling activities are currently ongoing at the depth of around 2,470 metres. The spud of the third exploration well is planned for this year.
At the end of 2021, the number of bp’s Azerbaijani national employees was 2,266 including fixed-term employees.
Since mid-2018, 90% of bp Azerbaijan’s professional staff has been nationals. Non-professional staff of bp in Azerbaijan is 100% nationalized.
bp will continue its efforts to optimize its learning and development programmes and will actively participate in public and private sector initiatives contributing to the development of the local talent market.
The success of projects in the Caspian region depends, in part, on the operators’ ability to create tangible benefits from these projects for the people of the region. To achieve this, bp and its co-venturers continue to implement major social investment projects, which include educational programmes, building skills and capabilities in local communities, improving access to social infrastructure in communities, supporting local enterprises through provision of access to finance and training, support for cultural legacy and sport, as well as technical assistance to public institutions.
In 2021, bp and its co-venturers in the bp-operated joint ventures spent more than $2.2 million in Azerbaijan on social investment projects.
bp (on behalf of its co-venturers in the joint ventures that it operates) will continue their social investment initiatives in support of local capacity-building and enterprise development throughout Azerbaijan to assist the country in strengthening its economy.
Some examples of such projects in Azerbaijan are:
In addition, in 2021, bp alone spent more than $1.5 million on various social and sponsorship projects in Azerbaijan. Some examples of these projects include:
Tamam Bayatly at bp’s press office in Baku.
Telephone: (+994 12) 525 58 95