Shah Deniz spuds fourth appraisal well in south-western flank of structure

23 January 2006

Shah Deniz completes fourth Stage 1 production well and spuds fourth appraisal well in south-western flank of structure. 
BP, on behalf of the Shah Deniz partnership, announced today the successful drilling of the fourth pre-drill well (SDA-4) and the spud of the fourth appraisal well (SDX-04) under the Shah Deniz Production Sharing Agreement. The wells are drilled by the Istiglal semi-submersible drilling rig. 

The fourth pre-drill well (SDA-4) was drilled through the Shah Deniz Stage 1 template to a total depth of 6189 meters. The well was then logged and after the production liner run, it was suspended awaiting the installation of the TPG-500 platform later this year and subsequent completion as a gas producer. The Istiglal was moved to the SDX-04 location in the south-western part of the Shah Deniz field on January 10, 2006. 
The SDX-04 well will be drilled to a total depth of more than 7000 meters. The previous three exploration and appraisal wells (SDX-01, SDX-02 and SDX-03) were designed to appraise and delineate the Stage 1 reserves in northern flank of the field. The SDX-04 well will appraise and delineate the resources in the southern flank of the field and will also test for gas presence in deeper horizons. 

The SDX-04 will take approximately six months to drill and production testing could extend the well’s duration by several months in order to confirm the commerciality of the gas reserves in the southern extent of the field. 
The parties to the Shah Deniz Production Sharing Agreement (PSA) are: BP (operator – 25,5%), Statoil (25,5%), the State Oil Company of Azerbaijan Republic (SOCAR – 10%), LUKOil (10%), NICO (10%), Total (10%), and TPAO (9%). 

The remaining 2006 Shah Deniz project milestones are: 

  • Stage 1 subsea pipelay completed - 1Q
  • TPG500 sail away & offshore installation – 2Q
  • Mechanical completion of the SD section at the terminal achieved – 2Q
  • SCP commissioning from the Sangachal Terminal commenced – 2Q
  • Off-take connections to BOTAS, GIOC, and Azerigas completed - 3Q
  • Offshore commissioning of TPG500 completed – 3Q
  • SCP ready to receive First Gas – 3Q
  • SDX-04 completed - 4Q
The Stage 1 project is progressing according to schedule to meet the target of delivering first gas to the market before winter 2006. 
Notes to Editors:
The Shah Deniz partnership announced the major gas condensate discovery in the Azerbaijan sector of the Caspian in July 1999 as a result of the SDX-01 exploration well. In April 2000 the partnership announced the successful results of the SDX-02 appraisal well, which was drilled six kilometers south of the original discovery. During these appraisals extensive testing was conducted on two layers - the Fasila Suite and the Balakhany VIII interval. The results of the tests suggested a world-class gas condensate resource. 

Further appraisals were conducted on the deeper pre-Fasila horizons during the Stage 1 pre-drilling programme after the first pre-drill well – SDA-01 discovered an additional gas reservoir below the previously mapped horizons. This layer was further tested through the subsequent pre-drill wells and this has allowed the Shah Deniz partnership to further upgrade the reserves. However, to determine the incremental reserve volumes and production capacity available from those lower sections of the reservoir, BP as operator of the Shah Deniz development project will continue the analysis of the data. 
The Shah Deniz field lies in water depths between 50 metres and 600 metres, some 70 kilometres south east of Baku. The Shah Deniz PSA was ratified on October 17, 1996. 

Further information:
Tamam Bayatly at BP’s Press Office in Baku, telephone: 994 (0) 12 599 4557