Status of Azerbaijani offshore oil and gas projects as of December 2012

Azerbaijan, Baku, Dec. 22 / Trend E.Ismayilov /


The Azeri-Chirag-Gunashli PSA was signed in September 1994. The agreement provides for the development of the contract area within 30 years. Production in the Chirag field commenced in 1997, on Central Azeri at the beginning of 2005, West Azeri at the beginning of 2006, East Azeri at the end of 2006, deepwater Gunashli in spring 2008.

In early September, the U.S. company Hess agreed to sell its share to India's ONGC (2.72 percent) in the project of developing ACG oil fields, as well as 2.36-percent stake in the BTC pipeline. The deal value is estimated at $1 billion. The deal is expected to be completed in the first quarter of 2013.

Equity participation in the contract, excluding Hess's share, is distributed as follows: BP (operator in "Azeri-Chirag-Guneshli") - 35.83 percent, Chevron - 11,27 percent, Inpex - 10,96 percent, AzACG - 11.6 percent, Statoil - 8.56 percent, Exxon - 8 percent, TPAO - 6.75 percent and Itocu - 4,3 percent.

Project Status

As of November 26, around 289 million tons of oil were extracted from "Azeri-Chirag-Guneshli" block. Some 144 million tons of this volume fell to Azerbaijani profit oil. Some 200 million tons of the total volume of oil produced at block were transported via the Baku-Tbilisi-Ceyhan pipeline.

BP Azerbaijan is working to ensure a stable production volume on the block because of the decline in production volume at ACG.

The project of increasing the production at the "Chirag" field (the project is called Chirag Oil Project (COP)) is important within ACG due to the construction of a new platform - "West Chirag".

BP company - operator of the "Azeri-Chirag-Guneshli" offshore fields' block has completed the construction of the jacket of the platform within the Chirag oil project (increase in oil production on the "Azeri-Chirag-Guneshli" offshore fields' block).

This is the heaviest block in the Caspian Sea, which was loaded onto a barge STB-1 at the Baku Deep Water Jacket Plant named after Heydar Aliyev on Oct.20.

The jacket will remain on the barge till the end of the year, which will allow to complete work on construction of underwater pipelines that are currently at the stage of mounting.

It is planned to start work on installation of the jacket in early 2013. Also 90 percent of work on construction and installation of superstructures of the platform conducted by ATA (AMEC-Tekfen-Azfen) Consortium has been completed. They are planned to be sent to the sea in the second quarter of 2013.

Chirag involves investments of $6 billion.

The estimated daily volume of Azeri Light crude oil from the new platform to be built within increasing oil production at ACG will hit 183,000 barrels. The expected daily volume of associated gas from the new platform will exceed 6.5 million cubic meters. The estimated daily volume of gas pumped at the platform will hit 2.3 million cubic meters.

The first production from the platform is scheduled for late 2013.

In total, it is planned to produce 300 million barrels of oil within the project implementation (till the end of the contract term on ACG in 2024).


The contract on development of off-shore Shah Deniz field was signed on 4 June 1996. Shah Deniz participating interests are: ВР (operator - 25.5%), StatoilHydro (25.5%), SOCAR (10%), LukAgip (10%), NICO (10%), Total (10%), and TPAO (9%). Gas production from the field began in December 2006. Gas is transported to Georgia and Turkey through the South Caucasus gas pipeline. Azerbaijan also purchases the fuel.

Reserves of "Shah Deniz" field are estimated at 1.2 trillion cubic meters of gas.

Project status

Around 5.2 billion cubic meters of gas and 1.4 million tons of condensate (10.9 million barrels) were extracted from "Shah Deniz" in January-September. The average daily volume of gas production at the field in January-September was 18.8 million cubic meters, the average daily condensate production hit 39,600 barrels.

In 2011, around 6.67 billion cubic meters of gas and 1.8 million tons (14 million barrels) of condensate were extracted at Shah Deniz. Last year, the average daily production from the field was 18.3 million cubic meters of gas and 38,300 barrels of condensate.

Some 35.4 billion cubic meters of gas and 9.5 million tons (75 million barrels) of condensate were delivered to the world markets from late 2006 (the beginning of production in "Shah Deniz") to late September, 2012.

Peak production at the field within the first stage of the development is expected to hit nine billion cubic meters of gas and 50,000 barrels of condensate.

At present, the operations are underway within the implementation of the second phase of developing the field, and, in particular, advanced drilling, which will be more than 20.
BP used the additional Heydar Aliyev rig operated by Danish Maersk Drilling to ensure the operations on well drilling.

BP will determine the contractors of all construction operations within installing two new platforms and creating the necessary underwater infrastructure in 2013.

Partners developing "Shah Deniz" are working to start implementing the second stage, which is estimated at $ 28 billion.

Some 16 billion cubic meters of gas a year will be additionally extracted within the second stage of field development. Around 6 billion will be delivered to Turkey and 10 billion to Europe. It is predicted that gas production can be brought up to 24 billion cubic meters a year within the second stage of field development.


Absheron project Participants includes SOCAR (State Oil Company of Azerbaijan) - 40 percent, the French company Total - 40 percent and Gaz De France Suez - 20 percent.

The contract on the Absheron field signed Feb. 27, 2009 between SOCAR and Total. Later Total sold 20 percent of its equity participation in the contract to the company Gaz De France Suez. This is the, the most major oil and gas contract that has been concluded in Azerbaijan recently.

Project status

It was announced about the discovery of the deposit in September 2011. A decision about sidetrack drilling of the first exploration well was made to specify the data. The work was completed this year.

The results from the first exploration well point to the commercially attractive gas and condensate reserves.

Currently, the work is not carried out in the field because of the lack of a free rig. All drilling rigs were engaged to conduct the operations on the "Azeri-Chirag-Guneshli" block and "Shah Deniz" field.

Azerbaijan plans to begin constructing a new floating rig, which will be used primarily for SOCAR's needs, in 2013. However, the country needs three more new rigs for field development and exploration drilling on prospective structures.

According to SOCAR geologists, the Absheron field's reserves may comprise 300 billion cubic meters of gas and 45 million tons of condensate.


Dec.22, 2009, SOCAR signed a PSA contract with Bahar Energy Limited for the exploration, rehabilitation and development of the Bahar and Gum Deniz offshore fields in the Azerbaijan sector of the Caspian Sea. Under the contract, SOCAR's equity is 20 percent and Bahar Energy Limited-80 percent.

Bahar Energy Limited was registered in the Jebel Ali Free Trade Zone in the UAE. SOCAR signed a memorandum of understanding with the firm on April 16, 2009.

Project Status

The contract consists of two parts. The first involves the rehabilitation and stabilization of production on the field and the second - the exploration of the Bahar-2 promising structure.
Roughly 58 wells are planned to be drilled at the Gum Deniz and Bahar oil and gas fields in the Azerbaijani sector of Caspian Sea over the next years.

Around 101 wells are planned to be re-completed at the fields (48 - on "Gum-Deniz" field, 53 - on "Bahar" field). Six new oil platforms are planned to be constructed and installed.
Old eight platforms are planned to be renovated and modernized. It is planned to hold a two-dimensional (2-D) seismic survey in the oil field "Gum Deniz" and gas field "Bahar", a three-dimensional (3-D) seismic survey in the exploration area of "Bahar-2" prospective structure.

In particular, at present, SOCAR's Geology and Geophysics Department completes three-dimensional seismic surveys on the "Bahar-2" structure.

The total production is estimated at 122 billion cubic meters and 84 million barrels of condensate within the first phase.

Oil production within the "Phase 1" (implementation period is not specified) of the plan for the rehabilitation of the "Gum Deniz" field is estimated at 207 million barrels of oil and 16.6 billion cubic meters of gas.

The contract is concluded for 25 years with the option of renewing for the next five years. Initially, SOCAR's share of profitable hydrocarbons will amount to 40 percent. In the future the share will increase to 90 percent. The investment will hit $1 billion.

Under the contract, SOCAR will receive 170,000 tons of oil and 630 million cubic meters of gas within three years.

Gum Deniz has operated since 1955 and is located 21 kilometers southeast of Baku.
Bahar has operated since 1969 and is located 40 kilometers southeast of Baku.


The contract on Shafag-Asiman was signed for 30 years in October 2010. Exploration period will be four years, with possibility of extension for three years. Two wells are planned to be drilled within the first phase. Two more wells will be drilled if necessary within the second one.
In the operational period the sides will implement joint operatorship within the project. Share participation in the contract is expected on the scheme 50 to 50 percent.

The projected reserves at the "Shafag-Asiman" block hit 500 billion cubic meters of gas and 65 million tons of condensate.

"Shafag" and "Asiman" structures are located 125 kilometers to the south-east of Baku.
Exploration work has not been conducted on the block before. It is located in the depth of 650-800 m. with the depth of the reservoir at 7,000 meters.

Project status

BP-Azerbaijan company plans to complete processing the data obtained as a result of three-dimensional geophysical studies on the prospective structure "Shafaq-Asiman" in 2013.

Three-dimensional geophysical studies were conducted from "Gilavar" geophysical vessel. Caspian Geophysical processes the received data.

According to the initial data, the indices on the structure are good and BP hopes that a gas condensate field may be discovered here.


Under the "Contract of the Century" signed by Azerbaijan in 1994, BP and its partners in the Azeri-Chirag-Guneshli project have the right to develop oil layers lying to Fasile (Break) suite.

Based on the PSA, development of the lower horizons is the subject of a separate agreement.
Judging by other Azerbaijani offshore fields, one can argue that productive stratum placed after Fasile, namely the sandy suites Nadkirmakinsk and Podkirmakinsk and Gala, also contain hydrocarbons.

According to the forecasts, the gas reserves are estimated at 300 billion cubic meters.

At present, the work is underway at ACG to prepare a contract within the development project.
The oil reserves at ACG are being developed upon PSA. But SOCAR senior official said that the contract to be signed by all participants will be concluded in a new form.

This will be new Risk Service Agreement (a contract with a minimum guarantee of compensation).

SOCAR head Rovnag Abdullayev said earlier that the basic commercial principles on the project development have been already agreed.


Araz-Alov-Sharg participating interests are: BP (operator) - 15%, Norwegian Statoil - 15%, U.S. ExxonMobil - 15%, Turkish TPAO - 10%, Canadian Alberta Energy - 5% and SOCAR - 40%. Required investments make up about $4bln.

Project Status

The project will remain frozen until the Caspian Sea status has been agreed upon between Azerbaijan and Iran.


The first contract for development of promising offshore Zafar-Mashal field was signed between the U.S. ExxonMobil and SOCAR on Apr. 27, 1999. SOCAR possessed 50% and ExxonMobil 30%. In 2000, the remaining 20% was transferred to the U.S. ConocoPhillips.

Required investments in the project were estimated at $2bln and projected volume of oil reserves at 140mln tons, of which 100mln came from Zafar and 40mln from Mashal.

The contract was closed due to commercially unattractive volume of hydrocarbons.

Earlier, Conoco Philips company showed interest in this promising structure. In particular, the company has expressed interest in the exploration at several structures in the Azerbaijan sector of the Caspian Sea and, in particular, "Zafar-Mashal".

According to SOCAR, the company is ready to hold talks with Conoco Philips on the "Zafar-Mashal" prospective structure.

According to SOCAR geologists' estimations, the reserves on this structure are estimated at 300 billion cubic meters of gas and 37 million tons of condensate.


The first contract on the development of the perspective offshore structure of Nakhchivan was signed on 1 Aug. 1997. The parties to the contract were ExxonMobil - 50%, SOCAR - 50%.

Project Status

In March 2010, SOCAR and German RWE signed a memorandum of understanding on offshore perspective structure "Nakhchivan". Under the terms of the memorandum, companies must undertake all necessary work to prepare PSA by March 10, 2011.
However, the contract has not been signed.

SOCAR senior representative said earlier that RWE is studying geological information on the structure. It is necessary to make sure of the expediency of making the investments required to start developing the structure.

The German company can share information on the geological structure with companies with which it can share the risks of the project, therefore, to become partners
The field's reserve is projected at around 300 billion cubic meters of gas and 40 million tons of gas condensate.

Iran doubles budget for defense research projects
Iran doubles budget for defense research projects
Georgia sees increase in hazelnuts export
Georgia sees increase in hazelnuts export
New apartments to be added to Azerbaijan's mortgage fund base
New apartments to be added to Azerbaijan's mortgage fund base
Loading Bars
Baku Metro switches to modern train control systems
Visits of citizens to liberated Azerbaijani territories still dangerous - ANAMA
Malaysia ready to assist in promotion of pilgrim tourism in Uzbekistan
Uzbekistan’s 10M2020 data on plastic cards revealed
Turkmenistan's natural gas reserves increased – Eni’s review
Time deposits value surges in Kazakhstan year-on-year
Iran's total rail transit up
Turkmenistan's oil reserves remain stable for several years – Eni’s review
Iran doubles budget for defense research projects
Georgia sees increase in hazelnuts export
Iran reveals its COVID-19 data for November 30
CNG can easily be used instead of gasoline in Iran
Chabahar - first Iranian port to attract foreign operators - PMO
Georgia decreases mobilizing funds in tax revenue
Russia increases ten-month value of chemical products import from Turkey
New apartments to be added to Azerbaijan's mortgage fund base
Number of enterprises put into operation in Iran's South Khorasan Province up
Georgia sees decrease in estimated real GDP
Dynamics of Azerbaijan’s oil production since 2000
Iran's Central Bank announces number of exchanged checks
Israel-Lebanon maritime border talks postponed, officials say
Azerbaijan to assign 'stars' to hotels given level of COVID-19 pandemic-related security
Cargo, passenger traffic via Turkish Adana Airport lowers in 10M2020
Iran reveals exports of mining products
Eni’s analysis on Azerbaijan’s oil reserves
Value of Iran's trade turnover with Syria announced
Value of Turkish chemical products exported to Turkmenistan up
OPEC+ to discuss extending oil cuts or gradually raising output
World oil reserves in Eni’s estimates
Azerbaijani credit guarantee fund reveals data on issued loans by its agent banks
Total assets of Azerbaijan's Mortgage and Credit Guarantee Fund revealed
Uzbekistan to introduce monitoring system for seismic geodynamic processes at oil & gas fields
Amount of COVID-19 cases increase in Georgia
OSCE shares experience in risk management of oil and gas infrastructure with Turkmenistan
Swiss bank to invest in modernization and technical equipment of UzAuto Motors
Expenses grow on construction of enterprises in Irans' Chaharmahal and Bakhtiari Province
Kazakhstan eyes launching production of plastic tractor spares
Iran unveils details of exports from Mazandaran Province
Azerbaijani MP talks creation of municipalities in liberated territories
Long-term loans for construction sector in Azerbaijan increase
Hungarian-Uzbek investment projects to be implemented in food, agricultural sectors
Operating profit to regulatory risk-weighted asset of Halyk Bank Georgia down
Update on construction of Tebinbulak mining, metallurgical complex in Uzbekistan
Israel increases imports of chemical products from Turkey
Romania ramps up ten-month value of chemical products import from Turkey
Iran declares details of exports via South Khorasan Province
Central Bank of Azerbaijan reveals last deposit auction's results
Kazakhstan, Israel trade down nearly twofold amid COVID-19
Baku Higher Oil School celebrates its 9th anniversary
Turkmenistan’s Turkmengas increases gasoline production
10M2020 value of Georgia's grains, legumes import from Turkey down
Capital of Iran's Nouri Petrochemical Company increased
Germany partial lockdown pushes more companies into short-time work
Turkey reveals October foreign trade turnover
Azerbaijan commissions Aghyokhush gold field (PHOTO)
Credit Suisse commercial property fund to liquidate amid big discount
Azerbaijan, Turkey plan MoU on natural gas transportation to Nakhchivan Autonomous Republic
Kazakhstan applies corrections to capital budget
Azerbaijan to ink energy cooperation agreements with a number of countries in near future
Weekly review of Azerbaijan's oil market
Iran reveals data on foreign investments in Razavi Khorasan Province
One of upcoming OPEC+ meetings planned to be held in Azerbaijan
Kazakhstan’s freight transportation operator opens tender to buy petrol
Turkmenistan's private sector increasingly involved in raw cotton production
Azerbaijan worked out draft agreements on sale and purchase of electricity with Acwa Power, Masdar
China grants Tesla green light to start selling Shanghai-made Model Y SUV
Georgian Tera Bank sees decrease in impaired loans - Fitch Ratings
Azerbaijan’s electricity generation increased by almost 40% over last 10 years
Southern Gas Corridor to open new opportunities for region’s countries to bring their energy resources to world markets
Commissioning works being completed at Turkmenistan’s Malay field
Construction at Khudaferin and Giz Galasi hydro-junctions nearing completion
'Stars' assigned to Azerbaijani hotels to be recognized on int'l platforms - Azerbaijan Hotel Association
Gold, silver prices in Azerbaijan down
Iran’s NICICO enlarges copper production
Ukraine working on ensuring food security and stability in Uzbek market
Turkish company to take part in ASAN Service projects
Leading the Way, Leading the World : Prime Minister Modi Inspires India to Become Pharmacy of the World
Uzbekistan boosts import of grain and legumes from Turkey
Britain bans new Huawei 5G kit installation from September 2021
Azerbaijan hikes percentage of cars import from Turkey in October
Iran's Karun Petrochemical Company discloses amount of its savings
Energy Minister: One of key goals is to ensure effective use of resources in Azerbaijan's liberated lands (INTERVIEW)
Azerbaijani currency rates for Nov. 30
Number of patients recovered from COVID-19 in Uzbekistan passes 70,000
UAE, Afghanistan buy Turkmen-made gasoline
Design work to build new highway in liberated Azerbaijani territories starts (Exclusive)
Iranian currency rates for November 30
Oil prices slip in cautious trade ahead of OPEC+ meet
Azerbaijan's ANAMA continues demining road to liberated Sugovushan settlement (PHOTOS)
Iran boosts exports via Kerman Province
Iran to prepare agricultural plan for Gilan and Mazandaran provinces
Azerbaijan’s liberation of its territories to revive historical Silk Road – Turkish Grand National Assembly
Azerbaijan’s Aghdam sometimes called "Hiroshima of Caucasus" - France-24 (VIDEO)
Brazil surpasses 6.3 million COVID-19 cases
Malaria death toll to exceed COVID-19's in sub-Saharan Africa: WHO
New Zealand regulator charges 13 parties over White Island eruption tragedy
Daily COVID-19 case count drops to 794 in Kazakhstan
Solar panel power plant launched in Iran's Fars Province
Hamilton wins F1 Bahrain Grand Prix as Grosjean escapes horror crash
Biden to receive first presidential intelligence briefing on Monday
All news