State Oil Co. of the Republic of Azerbaijan (SOCAR) and BP PLC-operated Azerbaijan International Operating Co. (AIOC) have signed a letter of intent for future development of Azeri-Chirag-Gunashli (ACG) field off Azerbaijan in the Caspian Sea.
The agreement will cover development of the field until 2050 and “will add significant resource development potential to the middle of the century,” the companies said. ACG currently produces 620,000 boe/d.
In addition to BP, shareholders in AIOC are Chevron Corp., INPEX Corp., Statoil ASA, ExxonMobil Corp., Turkish Petroleum Corp. (TPAO), Itochu Corp., and ONGC Videsh Ltd.
The companies say the agreement sets key commercial terms for future ACG development and enables the parties to conclude negotiations and finalize fully-termed agreements in the next few months.
ACG is a supergiant field 100 km east of Baku covering 432 sq km. It lies in 120-170 m of water. Reservoir depth is 2,000-3,500 m.
The existing ACG production sharing agreement was signed in September 1994 for 30 years. Oil production from the field began in November 1997. To date the field has produced more than 3 billion bbl of oil with around $33 billion of investment.
There are six producing platforms on ACG, linked with an onshore terminal in Sangachal near Baku. From the terminal ACG oil is exported to market primarily by the Baku-Tbilisi-Ceyhan oil export pipeline and the Western Route Export Pipeline to Supsa.