BP, SOCAR officials meet on ACG production declines

Under criticism from Azeri officials about production declines from the ACG oil and gas fields in the Caspian Sea, BP PLC has held meetings in London and Baku with representatives of State Oil Co. of Azerbaijan Republic (SOCAR) to discuss remedies.

Average oil production from Azeri, Chirag, and Gunashli fields last year fell to 717,600 b/d from a peak of 823,000 b/d in 2010, and half-year figures indicate the decline continues.

In an Oct. 12 television statement, Azerbaijan President Ilham Aliyev blamed the decline on “numerous mistakes” by the BP-led consortium managing the fields. He said underperformance against targets has cost the government $8 billion.

Energy Minister Natiq Aliev later added to the pressure by calling ACG production “abnormal” and calling for tighter control over the consortium, which in addition to BP includes SOCAR, Chevron, Inpex, Statoil, ExxonMobil, TPAO, Itochu, and Hess.

In the first half this year, total average production was 684,000 b/d from the Chirag, Central Azeri, West Azeri, East Azeri, and Deepwater Gunashli platforms. The first-half average last year was 775,700 b/d.

Production at the complex started in November 1997 with early oil from Chirag field. The most recent start-up was the Deepwater Gunashli platform in April 2008. Water depths range from 120 m in the Azeri fields to 175 m in Deepwater Gunashli.

BP originally expected plateau production from Deepwater Gunashli of 320,000 b/d to bring total ACG output to more than 1 million b/d.

First-half production from Deepwater Gunashli slid to 116,000 b/d this year from 130,400 in the same period of 2011. The field has 11 production wells and 13 water injectors.

Output rates were down in the first half from all the ACG platforms except East Azeri.

“We clearly now have a challenge, but we are committed to working through it as quickly as possible together with SOCAR, the government of Azerbaijan, and our partners,” said Bob Fryar, BP executive vice-president, production, after the meetings in Baku.

“We are clear on the priorities and the actions that we will take to further intensify our performance, including drilling, and to maximize production with a continued focus on safety.”

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