Baku, Azerbaijan, Sept. 7
By Ilkin Shafiyev – Trend:
Total investments in Azerbaijan’s oil and gas sector amount to about $95 billion, Azerbaijani Energy Minister Parviz Shahbazov said at the Azerbaijan Competitiveness Forum Sept. 7.
“By the virtue of the oil and gas strategy conducted in Azerbaijan, modern technologies and best practices were attracted to this sector,” the minister said.
He noted the importance of signing the Contract of the Century in the development of Azerbaijan’s oil and gas strategy, adding that this agreement continues to bring benefits to the country.
“Last year, the contract was extended until 2050,” Shahbazov said. “The new agreement provides for the investment of $40 billion and production of about 500 million tons of oil from the Azeri-Chirag-Gunashli (ACG) block of fields.”
Azerbaijan will receive $3.6 billion from the extension of the ACG development in the form of bonus payments alone.
During the next 32 years, investments as part of the new agreement on the development of the ACG block of oil and gas fields until 2050 may exceed $40 billion.
The directions of these investments will be different, for example, drilling with the use of the latest technologies, which are unavailable in the Caspian Sea for now, construction of a new platform (SOCAR and partners agreed to conduct engineering and design work to assess the construction of an additional production platform on the ACG contract area).
All this will lead to the opening of thousands of jobs.
With the extension of the Contract of the Century, the share of Azerbaijan’s state oil company SOCAR, represented in the project by the AzACG affiliated company, increased from 11.65 percent to 25 percent. This will give the company the right to receive more dividends and more votes when making important decisions.
At the same time, BP remains the operator of the project and retained a 30.37 percent stake.
This is while the share of Azerbaijan’s profitable oil (direct revenue from oil sales after reimbursement) will be 75 percent, while it reached 60 percent by the end of 2016. For 24 years that have passed since the signing of the Contract of the Century in 1994, Azerbaijan has earned over $135 billion, given that most of this time, oil prices were lower than the current ones.
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