BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first quarter of 2018, we spent about $102 million in operating expenditure and $260 million in capital expenditure on ACG activities.
In the first quarter of 2018, ACG continued to safely and reliably deliver stable production. Total ACG production for the quarter was on average 597,000 barrels per day (b/d) (about 54 million barrels or 7 million tonnes in total) from the Chirag (53,000 b/d), Central Azeri (156,000 b/d), West Azeri (123,000 b/d), East Azeri (94,000 b/d), Deepwater Gunashli (109,000 b/d) and West Chirag (62,000 b/d) platforms.
At the end of the quarter, 118 oil wells were producing, while 52 wells were used for gas and water injection.
Drilling and completion
ACG completed 5 oil producer wells in the first quarter of 2018
In the first quarter, ACG delivered an average of about 5.8 million cubic metres per day of ACG associated gas to SOCAR (525 million 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 the first quarter of 2018, 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 about 30 million standard cubic metres of Shah Deniz gas, while overall processing and export capacity for gas, including ACG associated gas is around 50 million standard cubic metres per day.
During the first quarter, the Sangachal terminal exported more than 71 million barrels of oil and condensate, including third party volumes. Of this, more than 63 million barrels were exported through Baku-Tbilisi-Ceyhan (BTC), about 8 million barrels through the Western Route Export Pipeline (WREP), and about 0.4 million barrels via a separate condensate export line.
Gas is exported via the South Caucasus Pipeline (SCP) and via SOCAR gas pipelines connecting the Terminal’s gas processing facilities with Azerigas’s national grid system.
On average, about 30 million standard cubic metres (about 1.1 billion standard cubic feet) of Shah Deniz gas was exported from the Terminal daily during the first quarter of 2018.
In the first quarter of 2018, BTC spent approximately $30 million in operating expenditure and about $5 million in capital expenditure.
Since the 1,768km BTC pipeline became operational in June 2006 till the end of the first quarter of 2018, it carried a total of about 2.93 billion barrels (around 391 million tonnes) of crude oil loaded on 3,839 tankers and sent to world markets.
In the first quarter of 2018, BTC exported around 63 million barrels (about 8.3 million tonnes) of crude oil loaded on 81 tankers at Ceyhan.
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 the first quarter of 2018, Shah Deniz spent approximately $123 million in operating expenditure and about $415 million in capital expenditure, the majority of which was associated with the Shah Deniz 2 project.
In the first quarter of 2018, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan (to SOCAR), Georgia (to GOGC), Turkey (to BOTAS) and to BTC Company in multiple locations.
During the quarter, the field produced about 2.7 billion standard cubic metres (bcm) of gas and 0.6 million tonnes (about 5 million barrels) of condensate.
The existing Shah Deniz facilities’ production capacity is currently 30.0 million standard cubic metres of gas per day or around 10.9bcma.
During the first quarter of 2018, Shah Deniz Alpha platform continued drilling the SDA11 well.
The Istiglal drilling rig completed the SDD03 well and commenced SDD04 well completion. The Maersk Explorer rig has continued drilling the lower section of the SDH01 well.
The above two rigs have already drilled 14 wells and completed four wells on the North Flank and three wells on the West Flank in preparation for commencement of Shah Deniz 2 production and subsequent ramp up. Drilling operations will continue to deliver all wells required to ramp up to plateau level
After achieving significant construction and commissioning milestones across the whole gas value chain in 2017, the Shah Deniz 2 and South Caucasus Pipeline Expansion (SCPX) projects have now entered the start-up phase in the run up to achieving first gas in 2018.
Shah Deniz 2 first gas scope is now 99 percent complete, in terms of engineering, procurement, construction and commissioning.
During the first quarter of 2018, hook-up and commissioning activities continued on the Shah Deniz Bravo platform with strong progress on both topsides. Overall progress is slightly ahead of schedule at over 90% complete. The facility is under operations control and start up procedures are progressing well with final checks under way ahead of introduction of hydrocarbons from the terminal.
The Shah Deniz 2 onshore facilities are now integrated with the operating Sangachal terminal following the removal of the fence that previously segregated them. Hydrocarbons have been introduced into the plant, a significant milestone that is essential for both first commercial deliveries and the subsequent start of production from the Shah Deniz Bravo facilities later this year.
In the first quarter of 2018, SCP spent about $8 million in operating expenditure and about $165 million in capital expenditure.
The pipeline has been operational since late 2006, transporting Shah Deniz gas to Azerbaijan, Georgia and Turkey.
SCP’s daily average throughput was about 23.1 million cubic metres of gas per day during the quarter.
The SCP has a dual operatorship with BP as the technical operator being responsible for construction and operation of the SCP facilities and SOCAR Midstream Operations, as commercial operator, responsible for SCP commercial operations.
During the first quarter of 2018, SCPX activities continued successfully along the pipeline route across Azerbaijan and Georgia. Overall, 99 percent of the first gas scope is already complete.
All mainline production welds are now completed across SCPX, with only tie-in welds remaining to complete the pipeline. Compressor Station 1 in Georgia has already been declared ready to operate. All infrastructure required to support first commercial gas deliveries to Turkey have now been completed. At Compressor Station 2, commissioning has commenced and the activities are on schedule.
At the end of 2017 the processing and interpretation of the 3D data acquired from the Shallow Water Absheron Peninsula (SWAP) contract area was finalized. A Notice of Prospectivity was signed with SOCAR, signifying BP’s commitment to drill exploration wells in three prospective areas in shallow water Absheron. Planning for the exploration wells drilling in the selected prospective areas is ongoing.
We also continue to plan for the first exploration well on the Shafag-Asiman block.
At the end of the first quarter of 2018, the number of BP’s Azerbaijani national employees was 2,688 including fixed-term employees. This makes 89 percent of BP’s professional employees in Azerbaijan, with many of them in senior positions.
BP remains committed to achieving a nationalization target of 90 percent for professional staff by the end of 2018. This envisages nationalizing some professional roles that are currently occupied by expatriate employees. Non-professional staff of BP in Azerbaijan is already 100 percent nationalized. The nationalization agenda also includes further optimization of BP’s learning and development programmes, close participation in public and private sector initiatives to further improve 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 the 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 the first quarter of 2018, BP and the co-venturers in BP-operated joint ventures spent over $1 million in Azerbaijan alone on social investment projects.
BP (on behalf of the 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:
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Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 599 45 57