INCREASE OF ACG CAPITAL EXPENDITURE RELATED WITH ADDITIONAL WORKS ON PROJECT
The increase of the Azeri-Chirag-Guneshli (ACG) forecasted capital expenditure is due to the decision to drill two additional wells as part of the East Azeri (EA) pre-drilling programme and the accelerated start of the Deep Water Gunashli (Phase 3) pre-drilling programme, the diving support vessel upgrade and associated pipelay and subsea costs, West Azeri and Phase 3 projects acceleration, additional contractor work scope, and additional costs due to oilfield price inflation and currency exchange rate movements.
Initially it was planned to spend $2311m for ACG activities in 2005 (Operations and Project), but the capital expenditure was increased by 13.5% and comprises $2,264m, Devid Vudvard, the head of Azerbaijani International Operation Company (AIOC), said to a news-conference on Wednesday.
The results of the first six months indicate that we expect to spend this year $188 million in operating expenditure against the plan of $154 million. The expected increase is due to higher transportation costs, higher wellwork activity on Chirag and increased facilities maintenance spend.
The capital expenditure for ACG in the 1st half of 2005 comprised $1,385bn.
The total capital expenditure for projects ACG, Baku-Tbilisi-Ceyhan and Shah-Deniz are forecasted in level $5,33bn (BTC - $1,388bn, Shah-Deniz - $1,318bn). The capital expenditure for three projects in the 1st half of 2005 comprised $2,503m (BTC - $530m, Shah Deniz вЂ" $588m).