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SOCAR comments on Statoil’s withdrawal from Shah Deniz project

Oil&Gas Materials 31 October 2014 15:01 (UTC +04:00)

Baku, Azerbaijan, Oct. 31

By Emil Ismayilov - Trend:

The Norwegian company Statoil's withdrawal from the project on development of the Shah Deniz gas and condensate field in the Azerbaijani sector of the Caspian Sea was not unexpected, a senior representative at Azerbaijan's State Oil Company (SOCAR) told Trend.

On Oct. 13, it was announced that Statoil sold its 15.5-percent share in the Shah Deniz project, 15.5-percent share in the South Caucasus Pipeline and 12.4-percent share in the Azerbaijan Gas Supply Company to the Malaysian oil and gas company Petronas.

The deal's value is $2.25 billion, and the deal is expected to completed in early 2015. The SOCAR senior representative said some issues related to Azerbaijan's oil and gas sector are perceived by many as "overly politicized."

"This situation [the company's withdrawal from the project] is considered normal: each company sets its own priorities, like Statoil, in this case," said SOCAR's representative.

"The company announced a new vision for some projects, and probably the decision was made based on that," he added.

Last year, Statoil sold 10-percent stake in Shah Deniz and the South Caucasus Pipeline to SOCAR and BP for $1.45 billion.

The contract for development of the Shah Deniz offshore field, which has proven reserve of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

Currently, the partners for development of the Shah Deniz field are: BP (28.8 percent), Statoil (15.5), NICO (10 percent), Total (10 percent), Lukoil (10 percent) and TPAO (9 percent), SOCAR (16.7 percent).

Earlier, Total sold its share in the project to the Turkish TPAO and after the completion of the deal the share of the latter in the project will be equal to 19 percent.

On Dec. 17, 2013, a final investment decision was made on the Stage 2 of the Shah Deniz offshore gas and condensate field's development. The gas to be produced as part of the Stage 2 of the field's development will be exported to Turkey and European markets by means of expanding the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP).

The first gas will be delivered to Turkey in 2018 and to Europe in 2019.

SOCAR has already signed contracts with Shell, Bulgar gas, DEPA, Gas Natural Fenosa, EON, Gaz de France, Hera, Enel, and Axpo to sell gas to Europe.

Edited by SI

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