Azeri-Chirag-Gunashli (ACG) ACG participating interests are: BP (operator - 34.1%), Chevron (10.2%), SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), ITOCHU (3.9%), Hess (2.7%).
During the first quarter of the year ACG spent $79 million in operating expenditure and $614 million capital expenditure. For the full year, we plan to spend $396million in operating expenditure and $2,579 million in capital expenditure.
During the first three months of the year we produced a total of 61 million barrels (around 678,000 barrels per day average) from the Chirag, Central Azeri, West Azeri and East Azeri platforms. Our current total daily production is over 700,000 barrels per day.
Our plan to produce an average of 708,000 barrels per day from the four platforms in total for the full year remains on target. Of this, 141,000 barrels per day is expected from Chirag, 257,000 barrels per day from Central Azeri, 168,000 barrels per day from West Azeri and 142,000 barrels per day from East Azeri.
Chirag has 21 wells in operation (14 oil producers and seven water injectors) and is now producing around 142,000 barrels per day. From the start of production in November 1997 to the end of the first quarter 2007, Chirag had produced over 395 million barrels (over 53 million tonnes) of oil.
Central Azeri (CA) has 14 wells (11 oil producers and three gas injectors). CA is currently producing around 250,000 barrels per day. From the start of production in February 2005 to the end of the first quarter 2007, CA had produced over 149 million barrels (over 20 million tonnes).
West Azeri (WA) has six wells all of which are oil producers. WA is currently producing around 185,000 barrels per day. From the start of production in early January 2006 to the end of the first quarter 2007, WA had produced 49.7 million barrels (6.7 million tonnes) of oil.
East Azeri (EA) is currently producing around 150,000 barrels per day from five out of the eight pre-drilled wells. We expect production to increase through 2007 as the other pre-drilled wells are brought online, prior to platform drilling commencing later this year.
Chirag: We are currently completing a sidetrack producer well, A-10z. We will then conduct some re-completion works on A-11 and finalise completion operations on A-21, which is an extended reach drilling water injector. We plan to drill two more sidetrack producer wells on Chirag this year.
Central Azeri: We completed the fourth platform-drilled well (a gas injector) on April 18. The B16Y (re-entry) platform well was completed in mid-May. We plan to drill four more wells from the CA platform this year - two water injectors and two production wells.
West Azeri: To date, we have drilled six platform wells. We are currently drilling a further producer well which was spudded in April. We plan to complete this well at a total depth of 3755m by early-July. We plan to drill four more wells from West Azeri in 2007.
East Azeri: We are continuing completion and tie-back activities on pre-drilled wells. To date we have tied back five wells (including a cuttings-re-injection well) with one more outstanding. We plan to drill two new wells (both water injectors) from the platform by the end of 2007.
Deep Water Gunashli: Pre-drilling continued successfully using the Dada Gorgud semi-submersible drilling rig during the first quarter of this year. We completed ten wells before the drilling, utilities and quarters (DUQ) platform jacket transferred offshore. Of these, one is planned as a cuttings re-injection well and one as a platform water injector. We are planning to start-up DWG’s tie-back programme later this year once the topsides offshore installation is complete.
The DWG drilling campaign also includes ten subsea water injection wells, which will also be drilled with the Dada Gorgud.
The rig will then undertake drilling and completion activities at the south manifold location on well G-01, and drill and suspend two further wells - G-02 and G-03. Once completed the rig will be moved to the north manifold location to drill and complete well F-01 and drill and suspend two other wells - F-02 and F-03.
Since the beginning of this year, supply of associated gas from the CA, WA and EA platforms has continued via the 28” gas subsea pipeline into the Sangachal Terminal and into Azerigas’s national grid system for domestic use. Some of the associated gas produced from the Chirag platform has continued to flow to the SOCAR compression station at Oil Rocks via the existing 16” subsea gas pipeline. The rest of the associated gas from the ACG platforms has continued to flow via in-field subsea gas pipelines to the Compression and Water Injection Platform (C&WP) for re-injection to maintain pressure in the reservoir.
In 2007 we planned to deliver 1.4 billion cubic meters of ACG associated gas to SOCAR. However, as agreed by AIOC and SOCAR early this year we have been delivering up to 8.5 million cubic metres of gas per day to SOCAR since January 1st 2007.
During the first quarter of 2007 oil from ACG has continued to flow via one 24" and two 30" subsea pipelines to the Sangachal terminal. The terminal's total oil processing capacity is now over 800,000 barrels per day and plans are to raise it to over one million barrels of oil per day when ACG Phase 3 facilities are commissioned at the terminal later this year.
In April the facility's operations reached a significant milestone: 1300 days without a day away from work case. The terminal's performance over the past three years has been outstanding. Commissioning, start-up and integration were successfully completed, including the Phase 1 and Phase 2 processing facilities, BTC main pump station, SCP facilities, Shah Deniz plant, as well as integrating SOCAR's and third party pipelines into the terminal's operations. In April Sangachal achieved its highest daily export rate to date when over 900,000 barrels were processed and exported.
During the first quarter of 2007 oil continued to be transported to the global markets, principally via BTC.
Baku-Tbilisi-Ceyhan Pipeline: In early April the Baku-Tbilisi-Ceyhan (BTC) pipeline celebrated the lifting of the 100 millionth barrel of oil from the Ceyhan Terminal in Turkey. Since last June, 131 million barrels (17.6 million tonnes or 165 tanker loadings) have been exported via BTC. From April 2007, BTC shareholders have been sending all of their oil volumes from ACG via the BTC pipeline.
Other export routes: From 1997 to the end of the first quarter of 2007, about 186 million barrels (282 tanker loads or approximately 25 million tonnes) of oil (including SOCAR non-ACG oil) was transported via the Northern Route Export Pipeline. Currently an average of around 100 000 barrels of oil per day is being transported via the railway systems of Azerbaijan and Georgia. From the beginning of railway transportation by the end of the first quarter of 2007, about 73 million barrels of oil (9.8 million tonnes or 122 tankers) had been transported by rail to Batumi in Georgia. The Western Route Export Pipeline (WREP) to Supsa is currently shut down as a precautionary measure to allow the completion of an extended repair programme which includes re-routing of a one kilometre section in Georgia. The pipeline will be restarted as soon as we complete all the necessary repairs and satisfy ourselves of the integrity of the pipeline.
Major highlights for the quarter included: