AIOC announces COP contract awards

9 July 2010

Today in Baku, the Azerbaijan International Operating Company (AIOC) announced the award of six key contracts amounting in total to some $814 million for the development of the Chirag Oil Project (COP) as part of the Azeri, Chirag and deepwater portion of the Gunashli (ACG) field development. These awards follow the project sanctioning in March 2010 by the ACG Steering Committee of the Chirag Oil Project, which will consist of: 
  • A Process, Drilling, and Quarters (PDQ) platform comprising a subsea template, a fixed steel jacket, topsides and associated equipment.
  • Subsea oil and gas pipelines and associated equipment
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%).

The award of these key contracts follows an extensive bidding and negotiation process conducted by AIOC. The process spanned some eighteen months and was based on the experience gained from the previous ACG development projects. 

The awarded six key COP contracts are as follows:
  1. 1. BOS Shelf, which is a joint venture between a Saipem Group entity and SOCAR's Baku Deepwater Jacket Factory (BDJF) named after Heydar Aliyev, for fabrication of the jacket and subsea template with associated pin piles and a riser support frame for the brownfield work on the Deepwater Gunashli production, compression, water injection and utilities platform (PCWU) platform at the BDJF facility in Baku with an overall value of approximately $215 million.
  2. The AMEC/Tekfen/Azfen (ATA) Consortium for the fabrication, assembly, hook-up and commissioning of the PDQ integrated deck, including the drilling facilities, at the Azfen fabrication facility in Baku with a value of approximately $340 million.
  3. Saipem Asia Sdn Bhd, a Malaysian company, for the transportation and installation of the subsea template with a value of approximately $57 million. SOCAR's heavy lift vessel Derrick Barge Azerbaijan (DBA) will be utilised for this work.
  4. Apply Leirvik Emtunga, a Norwegian/Swedish company, for the engineering, procurement and construction of the living quarters with a value of approximately $22 million. Engineering work will commence this year with shipping of the living quarters from Sweden expected to commence in the third quarter of 2011. The assembly and commissioning of the living quarters will be performed at the Azfen fabrication facility in Baku.
  5. Kellogg Brown & Root, a US/UK company, for the engineering of the offshore facilities with a value of approximately $150 million. After completion of engineering, work will continue through on site assistance in Baku.
  6. KCA Deutag, a US/UK company, for the engineering of the drilling facilities with a value of approximately $30 million. After completion of engineering, work will continue through on site assistance in Baku
These awards maintain AIOC's commitment to optimise the use of Azerbaijan’s local resources. The project is expected to consume around 9 million manhours during construction work with 90% of this work being undertaken in Azerbaijan and of this, around 80% will be carried out by local workforce. Additionally, the contractors are encouraged to make maximum use of local subcontractors and we expect over 30% of the total COP spend to be expended in Azerbaijan. 

Further key contracts are currently being finalised and future announcements will follow for the award of subsea pipeline installation and diving works, and the transportation and installation of the jacket and topsides. 
Notes to Editors:

The Chirag Oil Project is a $6bn development and is planned to increase oil production and recovery of an additional 360 million barrels of oil from the ACG field through a new offshore facility to be installed between Deepwater Gunashli and Chirag platforms. For the first time in history of the ACG development COP will utilise local resources to the greatest possible extent and all fabrication works will be done in Azerbaijan.

For further information please contact:
Tamam Bayatly, BP Baku Press office, telephone:      994 (0) 12 599 4557