BP updates operations in Azerbaijan

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 2 -- Rashid Javanshir, head of BP PLC’s subsidiary in Azerbaijan, said production will be reduced next year at the massive Azeri-Chirag-Gunashli (ACG) oil field in the Azerbaijani sector of the Caspian Sea.

Consortium members plan to reduce the field’s oil production to 850,000 b/d in 2011, just under this year's projected level of 854,000 b/d. ACG’s participating interests include operator BP 37.4%, Chevron Corp. 11.3%, State Oil Co. of Azarbaijan Republic (SOCAR) 10%, INPEX Corp. 11%, Statoil ASA 8.6%, ExxonMobil Corp. 8%, Turkish Petroleum International Co. (TPAO) 6.7%, Itochu Corp. 4.3%, and Hess Corp. 2.7%.

Javanshir’s remarks coincided with release of BP’s fourth quarter business update for its work in ACG, where it spent $270 million on operations and $1.149 billion in capital investment in the first 9 months of 2010.

“For the full year we expect to spend about $587 million in operating expenditure and $1.584 billion in capital expenditure on ACG activities,” BP said.

BP said ACG production averaged 835,100 b/d of oil, amounting to 228 million bbl total from the Chirag, Central Azeri, West Azeri, East Azeri, and the deepwater Gunashli platforms.

The firm said its full-year plan remains an average 854,000 b/d production from the five ACG platforms, including 90,900 b/d from Chirag, 184,200 b/d from Central Azeri, 285,700 b/d from West Azeri, 158,100 b/d from East Azeri, and 135,100 b/d from Deep Water Gunashli.

BP said Chirag has 21 wells in operation (15 oil producers and 6 water injectors) and produced 98,000 b/d in the first three quarters of 2010. Central Azeri (CA) has 18 wells (13 oil producers, 5 gas injectors) and during the first three quarters it produced on average about 206,600 b/d.

West Azeri (WA) has 21 wells (15 oil producers, 6 water injectors). In the first three quarters it produced an average 252,800 b/d. East Azeri (EA) has 15 wells (10 oil producers, 5 water injectors). It averaged 143,500 b/d production during the first three quarters. Deep Water Gunashli (DWG) has 22 wells (11 oil producers, 11 water injectors), and during the first three quarters it produced on average 134,100 b/d of oil.

ACG associated gas
BP said it continued in the first three quarters to supply associated gas via the 28-in. subsea pipeline from three platforms (CA, WA, and EA) to the Sangachal terminal and from there into Azerigas national grid system for domestic use.

Some of the associated gas produced from the Chirag platform was sent to the SOCAR compression station at the Oil Rocks via the existing 16-in. subsea gas pipeline.

BP said the rest of the associated gas from the ACG platforms was sent via infield subsea gas pipelines to the compression and water injection platform on CA for reinjection to maintain reservoir pressure. Gas injection continues from five wells on CA.

During the first three quarters, BP said it delivered 9.3 million cu m/day of ACG associated gas to SOCAR.

“In total we delivered 2.5 billion cu m (bcm) of associated gas to SOCAR during the first three quarters, which already exceeds our original plan to deliver 1.9 bcm of ACG associated gas during the full year,” BP said.

Shah Deniz
Meanwhile, BP said the consortium developing the Shah Deniz oil field spent $121 million on operations and $251.1 million capital expenditure during the first 9 months of 2010.

Another $56.8 million is to be spent on operations and $253.7 million on capital expenditures by yearend, said BP, which operates the field with a 25.5% stake. The other shareholders include Statoil 25.5%, SOCAR 10%, OAO Lukoil 10%, Naftiran Intertrade Co. Ltd. (NICO) 10%, Total SA 10%, and TPAO 9%.

According to BP, Shah Deniz continued to produce from four wells to off-take points in Azerbaijan, Georgia, and the Turkish border during the first 9 months of 2010. It said the gas from Shah Deniz Stage 1 continues to be sold to Azerbaijan, Georgian Oil & Gas Corp. (GOGC), Turkey's state-owned Botas, and the BTC Co.

In the first three quarters of 2010, Shah Deniz produced more than 5.3 bcm of gas and 11.5 million bbl of condensate. By yearend, BP expects to produce 7.6 bcm of gas and 16 million bbl of condensate.

“Production will increase as new platform-drilled wells are brought on stream over the next few years,” BP said, adding that plateau production from Stage 1 is expected to be 8.6 bcm/year of gas and 45,000 b/d of condensate.

“Appraisal activities to support plans for the Shah Deniz full field development continue,” BP said, noting the SDX-06 appraisal well was spudded in July and is being drilled to a planned TD of 6,272 m. Completion is expected in 2011.

Oil, gas exports
Oil and gas from ACG and Shah Deniz continue to flow via subsea pipelines to the Sangachal Terminal, which has an overall capacity of 1.2 million b/d of oil and 39.5 million cu m/day, including 25.5 million cu m/day of Shah Deniz gas.

In the first three quarters of 2010 the Sangachal Terminal exported 244 million bbl of oil. That total included 213.5 million bbl through the Baku-Tbilisi-Ceyhan (BTC) pipeline, 23 million bbl through the western route export pipeline [WREP] and more than 7.5 million bbl by rail.

Gas is exported via the South Caucasus Pipeline (SCP) and via a SOCAR gas pipeline connecting the Sangachal Terminal’s gas processing facilities and Azerigas’ national grid system.

On average 19.3 million standard cu m/day of Shah Deniz gas was exported from the terminal during the first three quarters of 2010.

BTC pipeline
The BTC pipeline has throughput capacity of 1.2 million b/d of oil and currently carries mainly ACG oil and Shah Deniz condensate from Azerbaijan.

However, following a new transportation agreement in July, crude from Turkmenistan is being transported through the line, and BTC also has agreements to carry oil from the Tengiz field in Kazakhstan.

During the first three quarters, BTC had $20.1 million in capital expenditures and exported 213.5 million bbl altogether, reaching its record high throughput of 1.057 million b/d on July 21.

BTC shareholders are BP 30.1%, Azerbaijan (BTC) Ltd. 25%, Chevron 8.9%, Statoil 8.71%, TPAO 6.53%, Eni SPA 5%, Total 5%, Itochu 3.4%, INPEX 2.5%, ConocoPhillips 2.5%, and Hess 2.36%.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Chevron, BP, ConocoPhillips join to explore, appraise gulf leases

02/09/2015 Chevron Corp. subsidiary Chevron USA Inc., BP PLC unit BP Exploration & Production Inc., and ConocoPhillips Co. have pledged to work together t...

Chevron unit farms into Mauritania offshore blocks

02/04/2015 Chevron Mauritania Exploration Ltd., a wholly owned subsidiary of Chevron Corp., has agreed to acquire 30% nonoperated working interest in Blocks C...

The ANWR blitz

02/02/2015 Deception begins with a 58-sec video on the White House web site in which President Barack Obama says he'll ask Congress to make the whole Arctic N...

Chevron’s $35 billion capital budget down 13% from last year

01/30/2015 Chevron Corp. will allocate $35 billion in its capital and exploratory investment program for 2015, including $4 billion of planned expenditures by...

Chevron, BP, ConocoPhillips join to explore, appraise Gulf of Mexico leases

01/28/2015 Chevron Corp. subsidiary Chevron USA Inc., BP PLC unit BP Exploration & Production Inc., and ConocoPhillips Co. have pledged to work together t...

Gazprom Neft reviews progress on refinery modernization efforts

01/19/2015 The second phase of JSC Gazprom Neft's program to modernize and upgrade its Russian refineries to improve processing capacities, oil conversion rat...

Chevron makes oil discovery in deepwater gulf Anchor prospect

01/06/2015 Chevron Corp. reported a discovery of oil pay in multiple Lower Tertiary Wilcox sands in its Anchor prospect’s Green Canyon Block 807 Well No. 2, d...

Chevron, ONGC Videsh among firms awarded permits by New Zealand

12/22/2014 New Zealand's government has awarded six onshore permits across the Taranaki, West Coast, and East Coast basins, and nine offshore permits across t...

Canada Briefs

White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts

The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected