Partners continue negotiating under project to increase ACG production

Azerbaijan, Baku, Nov. 7 / Trend E.Ismayilov /

Expenditures under the Chirag oil project (increase of oil production in the Azerbaijani offshore Azeri-Chirag-Guneshli (ACG) fields) can be indicated in the program budget for the development of the block of these deposits in 2010, SOCAR senior representative (State Oil Company of Azerbaijan) said.

SOCAR together with a consortium of foreign companies develop the ACG fields in the Azerbaijani sector of the Caspian Sea.

The UK Company BP is the operator of the project developing the field.

At present, SOCAR and operator of the project have differences with developing of reserves in the ACG under Chirag oil project (COP). However, according to the SOCAR representative, the sides will agree on this issue shortly. "I hope that the funds will be invested in the 2010-program budget to develop the COP at ACG," the source added.

According to the source, SOCAR has not given final approval to start full operations under the COP project. "Currently, the sides are discussing the purely conceptual technical and technological issues to develop Balakhani suite," the source added.

In December, Azerbaijan plans to start construction of the bottom base plate needed for advanced drilling wells within the Chirag oil project - to increase oil production in the Azerbaijani offshore Azeri-Chirag-Guneshli fields, another source said earlier. "Necessary materials have been received, construction will probably start in December this year," said the source.

He said currently the SOCAR (on behalf of the Heydar Aliyev Baku Deep Water Jacket Plant) had been negotiating with the Boss Shelf company, which together with McDermott, commissioned by BP, built six platforms as part of the ACG field development. Negotiations are to reach an agreement for the joint construction of the bottom plate.

The project to increase oil production in the "Azeri-Chirag-Guneshli" field (Chirag oil project) may be sanctioned next year, said Rashid Javanshir, the President of BP Azarbaijan earlier.

Under two phases of the project on increasing oil production in the Azeri-Chirag-Guneshli field, there are plans to daily produce around 200,000 barrels of oil said the representative of SOCAR earlier. The representative of SOCAR said that according to the initial forecasts, there are plans to spend about $10 billion on the realization of the two phases of the project. The project includes installation of two platforms, a senior official of SOCAR said earlier.

Construction of a new platform within the Chirag oil project (COP), which envisages increasing oil production at the block of Azeri-Chirag-Guneshli (ACG) fields, is scheduled to begin in late 2010 - early 2011. The project is expected to get oil in 2013.

It is reckoned that the new Chirag Oil Project (COP) will add more than 300 million barrels of crude oil to the pipeline during the Azeri-Chirag-Gunashli (ACG) Production Sharing Agreement (PSA) period.

The oil reserves of the project are estimated at 331 million barrels. As many as 28 producing wells and 17 pressure wells will be drilled from a new platform. The construction of the new platform is expected to end in 2013. The oil production will be launched in Q3 of 2013.

Advance boring is performed with Dada Gorgud floating drilling unit to speed up realization of the project.

Installation of new platforms in the ACG is important for the development of the Balakhany Svita. Two more platforms must be constructed for this purpose. One of the platforms will cover Chiraq and Deep-Water Gunashli and second - West, East and Central Azeri.

The sides to the production sharing agreement on the Azeri-Chirag-Gunashli fields are BP (operator- 34.14 percent), ChevronTexaco (10.2 percent), SOCAR (10 percent), INPEX (10 percent), Statoil Hydro (8.56 percent), ExxonMobil (8.01 percent), TPAO (6.75 percent), Devon (5.63 percent), Itochu (3.92 percent) and Delta Hess (2.72 percent). Required investments total $20 billion.

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