BP Exploration (Caspian Sea) Limited is the operator on behalf of the Contractor Parties to the ACG Production Sharing Agreement.
In the first half of 2020, we spent about $268 million in operating expenditure and more than $947 million in capital expenditure on ACG activities.
During the second quarter the ACE (Azeri Central East) platform fabrication activities on the topsides and drilling facilities at the Bibi-Heybat fabrication yard, and the jacket fabrication at the Heydar Aliyev Baku Deepwater Jackets (BDJF) factory continued with social distancing measures in place and limitations on the work force numbers. Good progress is being made with the first major lift of the drilling support module lower deck achieved and the first major equipment delivered to Baku in the second quarter. The next major topsides lift was successfully completed in July 2020.
The fabrication of the living quarters in Sweden continues, as does the subsea fabrication at BDJF with the subsea pipe coating already completed at Caspian Pipe Coating (CPC).
COVID-19 pandemic restrictions in Azerbaijan and around the world continue to impact the delivery of materials and equipment throughout the supply chain. Despite of these, the project team continue to work collaboratively with all parties to achieve the best outcome for the project and the jacket pin piles are on target for installation in the third quarter of
During the second quarter, ACG continued to safely and reliably deliver stable production. Total ACG production for the first half of 2020 was on average about 498,000 barrels per day (b/d) (about 91 million barrels or more than 12 million tonnes in total) from the Chirag (38,000 b/d), Central Azeri (123,000 b/d), West Azeri (122,000 b/d), East Azeri (66,000 b/d), Deepwater Gunashli (96,000 b/d) and West Chirag (53,000 b/d) platforms.
At the end of the quarter, 129 oil wells were producing, while 42 wells were used for water and seven for gas injection.
Drilling and completion
In the first half of 2020, ACG completed eight oil producer wells.
During the first half, ACG delivered an average of 6.9 million cubic metres per day of ACG associated gas to SOCAR (1.3 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.
During the first half of 2020, 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 101 million standard cubic metres per day.
During the six months, the Sangachal terminal exported about 127 million barrels of oil and condensate. This included around 111 million barrels through Baku-Tbilisi-Ceyhan (BTC) and around 16 million barrels through the Western Route Export Pipeline (WREP).
Gas is exported via the South Caucasus Pipeline (SCP), the South Caucasus Pipeline expansion system and via SOCAR gas pipelines connecting the terminal’s gas processing facilities with Azerigas’s national grid system.
On average, more than 51.1 million standard cubic metres (more than 1,805 million standard cubic feet) of Shah Deniz gas was exported from the terminal daily in the first half of the
In the first half of 2020, BTC spent around $48 million in operating expenditure and about $14 million in capital expenditure.
Since the 1,768 km BTC pipeline became operational in June 2006 till the end of the second quarter of 2020, it carried a total of 3.47 billion barrels (more than 462 million tonnes) of crude oil loaded on 4,526 tankers and sent to world markets.
During the first half, BTC exported more than 113 million barrels (about 15 million tonnes) of crude oil loaded on 145 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 half of 2020, Shah Deniz spent about $409 million in operating expenditure and $452 million in capital expenditure, the majority of which was associated with the Shah
Deniz 2 project.
During the six months, the Shah Deniz field continued to provide deliveries of gas to markets in Azerbaijan (to SOCAR), Georgia (to GOGC and SOCAR), Turkey (to BOTAS) and to
BTC Company in multiple locations.
In the first half of 2020, the field produced around 9.4 billion standard cubic metres (bcm) of gas and 1.9 million tonnes (15.4 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 over 56 million standard cubic metres of gas per day or more than 20 bcma.
The Shah Deniz 2 project
In the second quarter of 2020, the project team continued the installation of the subsea production infrastructure using the subsea construction vessel Khankendi. Mechanical
installation of flowlines between the Shah Deniz Bravo platform and the East South flank is progressing on board of the pipelay barge Israfil Huseynov. All activities within the Shah Deniz 2 project continue as planned to achieve the start up of the East South flank in 2021.
During the second quarter of 2020, the Shah Deniz Alpha platform rig was on warm stack.
The Istiglal rig continued drilling the lower section of the SDC05 well. The Maersk Explorer rig drilled the SDF04 well to total depth and the well was then suspended. The rig then drilled the top hole of the SDF05 well.
The above two rigs have already drilled 18 wells in total, and completed 16 out of those, for Shah Deniz 2 production and subsequent ramp up (four wells on the North Flank, four
wells on the West Flank, four wells on the East South Flank, two wells on the West South Flank and two wells on the East North flank were drilled and completed, two wells on the West South flank were drilled to final depth and suspended). Drilling operations will continue to deliver all wells required to ramp up Shah Deniz 2 to plateau level.
In the first half of 2020, SCP spent about $22 million in operating expenditure and about $5 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.
As of 20 March 2020, technical operatorship of the South Caucasus Pipeline (SCP) has been transferred from BP Exploration (Shah Deniz) Limited to SOCAR Midstream Operations Limited, a fully-owned subsidiary of SOCAR. More information is available in the official press release.
During the first half of the year, the daily average throughput of SCP was about 32.8 million cubic metres of gas per day.
On the Shafag-Asiman offshore block, the first exploration well was spudded on 13 January 2020. Drilling activities are currently ongoing at the depth of 2,500 metres. Once the well reaches the target depth, the well data will be analysed and, if successful, an evaluation programme may be conducted to confirm the results.
On D230, a 3D seismic acquisition programme, which commenced in December 2019, was successfully completed on 14 March 2020. The processing of the first stage of the acquired data was completed in June 2020. The full processing is expected to complete in the third quarter of 2020 and will be followed by interpretation. If the results from the interpretation of the seismic survey are positive, we will begin planning for the first exploration well.
In the Shallow Water Absheron Peninsula, planning for the exploration wells drilling in three selected prospective areas is ongoing. We will commence drilling activities early next year once the upgrade of the rig selected to drill the first well is completed.
At the end of the second quarter of 2020, the number of bp’s Azerbaijani national employees was 2,485 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 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 half of 2020, bp and the co-venturers in bp-operated joint ventures spent more than $1.8 million in Azerbaijan 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:
In addition, in the first half of the year, bp alone spent $0.9 million on sponsorship projects in Azerbaijan. These included:
Further information: Tamam Bayatly at BP’s Press Office in Baku.
Telephone: (+994 12) 525 58 95