Status of offshore oil, gas contracts in Azerbaijan for 2019

Status of offshore oil, gas contracts in Azerbaijan for 2019

BAKU, Azerbaijan, Jan. 10

By Leman Zeynalova - Trend:


The production sharing agreement (PSA) for developing the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields was signed in September 1994, for a period of 30 years.

The Azerbaijani government and the country’s state oil company SOCAR, together with BP, Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU and ONGC Videsh signed the amended and restated agreement on the joint development and production sharing for the Azeri, Chirag fields and the deepwater part of the Gunashli Field in the Azerbaijani sector of the Caspian Sea until 2050.

The oil reserves on the block account for more than one billion tons. The recoverable reserves amount to more than 500 million tons of oil. More than 3.3 billion barrels of oil have been produced from the ACG, and the total costs for the project amounted to about $44.6 billion.

The production at Chirag field started in 1997, Central Azeri - early 2005, West Azeri - early 2006 and East Azeri - late 2006. Production on the deepwater part of Guneshli field began in spring of 2008, West Chirag - January of 2014.

Under the new agreement, construction of new Central-Eastern Azeri platform is planned. The investment decision on the new platform is planned to be made within the new ACG agreement in mid-2019.

The new ACG participating interests are as follows: BP - 30.37 percent; AzACG (SOCAR) - 25 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; ONGC Videsh Limited (OVL) - 2.31 percent.

Project status

BP is the operator of the Azeri-Chirag-Gunashli block of Azerbaijani fields, where Azeri Light oil is produced.

During the first three quarters of 2019, 5.7 million cubic meters of associated gas per day (a total of 1.6 billion cubic meters) were transferred from the ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea to Azerbaijan’s state oil company SOCAR.

BP’s operating and capital expenditures for the project of development of ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea amounted to more than $418 million and about $1 billion, respectively, during the first three quarters of 2019.

During the reporting period, 124 oil wells were operating at the block, 42 wells of which were used for water injection and 7 for gas injection.

Since the start of development of the ACG block of oil and gas fields, 498 million tons of oil and 164 billion cubic meters of gas have been extracted from the ACG fields.

BP and its partners are considering various ways to gain access to hard-to-recover oil at the ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea. Direct government revenues from the block of ACG fields exceed $140 billion.

In March 2019, Topaz Energy and Marine (Topaz), the leading offshore energy logistics company in the UAE, extended the contract for operation of 12 of its vessels, which are involved in BP offshore operations in Azerbaijan.

Seven ships will be used within the sea operations in Azerbaijan until 2025, three until 2023, and two until 2022. The ships will continue to support work of BP at the Shah Deniz and ACG fields in the Azerbaijani sector of the Caspian Sea.

In April 2019, the steering committee for the development of the Azeri and Chirag fields in Azerbaijan and the deepwater part of the Gunashli field (ACG), which includes SOCAR, BP, Chevron, INPEX, Equinor, ExxonMobil, TPAO, ITOCHU and ONGC Videsh, approved the Azeri Central East project, which is the next stage in the development of the ACG block in the Azerbaijani sector of the Caspian Sea.

The $6 billion project includes creation of a new offshore platform and the installation of equipment designed to process up to 100,000 barrels of oil per day. First oil as part of the Azeri Central East project, which is a part of the development project of the ACG block of oil and gas fields, will be received in 2023.

In April 2019, the BP, which is the operator of the development project of the ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea, announced extension of its $500 million drilling and engineering contract. The new contract was concluded with Turan Drilling & Engineering Company, which is a joint venture of KCA Deutag and SOCAR AQS.

The contract covers offshore operations and maintenance work on drilling rigs of seven platforms operated by BP, including rigs in Central, East and West Azeri, Deep Water Gunashli, West Chirag, Chirag and Shah Deniz.

In May 2019, the work of the Central Azeri platform was suspended from April 15 for technical maintenance, which lasted two weeks. The work of the platform was resumed on April 30, as planned, after the completion of work on the program.

By July 2019, the main contracts for the design, construction and installation were signed as part of the project of the Azeri Central-East (ACE) platform. Construction work under the project began in July. Since then, significant progress has been made in construction of many facilities and on production sites.

In August 2019, joint Turan Drilling & Engineering venture replaced KCA Deutag drilling contractor on all drilling platforms operated by BP at the Azeri-Chirag-Guneshli and Shah Deniz fields.

In September 2019, BP began construction of the Azeri-Central East (ACE) platform, which is a part of the ACG oil and gas field development project.

In October 2019, BP Exploration signed two contracts with Subsea 7 engineering company for the ACE project in the Azerbaijani sector of the Caspian Sea.

The scope of work includes design and manufacture of underwater structures, design, transportation and installation of pipe spools, the launch of a support for 16,200 metric tons and the assembly of the platform with the installation of the upper structures for 1,800 metric tons.

Work at sea should take place in 2021 and 2022.

In October 2019, Italian Saipem company in a consortium with Boshelf LLC and STAR GULF FZCO concluded three new contracts with BP for the development of the ACG block in Azerbaijani sector of the Caspian Sea.

In particular, two contracts provide for design and installation of pipelines and the related activities, and the third contract envisages transportation and installation of four piles, underwater structures and pipe spools.

Saipem’s share in the total value of the three contracts is about $145 million.

The maintenance work, which was carried out Oct. 15 at the West Chirag platform on the ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea, was successfully completed and the platform resumed operation on the evening of Oct. 29.

The technical maintenance program at the West Chirag platform was planned for 15 days. This work included updating the flare system and the control system. Such programs are part of routine operations, they are carried out regularly and in a planned manner. These programs are designed for regular inspections and technical maintenance, in order to implement the project.

In November 2019, Hungarian MOL Group company signed an agreement with Chevron Global Ventures Ltd and Chevron BTC Pipeline Ltd to acquire a 9.5-percent stake in the development project of the ACG block of oil and gas fields and an 8.9-percent stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline project.

The total value of the contract is $1.5 billion, taking into account adjustments at the closing of the transaction, which will be financed through the existing liquidity of the company. Upon completion of this transaction, MOL will become the third biggest partner in the ACG. The transaction is expected to be completed by the second quarter of 2020.

On Dec. 16, 2019, the British Petrofac company, a joint venture (JV) with Azerbaijan’s state oil company SOCAR, entered into a contract to provide project management services to support BP operations in Azerbaijan and Georgia.

The three-year contract will cover onshore and offshore BP operations in the Caspian region, including projects such as Azeri-Chirag-Gunashli, Shah Deniz, Baku-Tbilisi-Ceyhan, the South Caucasus Pipeline and the Western Route Export Pipeline (WREP).

BP is set to close two offshore platforms, namely, Chirag and Shah Deniz Alpha in Azerbaijan for scheduled maintenance. Technical maintenance scheduled for the second half of 2020 will last from one to three weeks.

In the period from the fourth quarter of 2020 until the first quarter of 2021, brownfield operations (work in areas with the status of “project based on an existing operating facility”) are expected on the Central Azeri and East Azeri platforms.

Shah Deniz

The contract for the developing the Shah Deniz field was signed on June 4, 1996.

The contract was extended from 2036 to 2048 and the shares of SOCAR and BP (project operator) in the project were increased to 16.7 percent and 28.8 percent respectively, in accordance with the documents signed in Baku on Dec.17, 2013.

The shareholders in the contract are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Petronas (15.5 percent), Lukoil (10 percent), NIOC (10 percent) and TPAO (19 percent).

The proven reserves of Shah Deniz are estimated at 1.2 trillion cubic meters of gas and 240 million tons of condensate.

Project status

So far, 112 billion cubic meters of gas have been produced from the Shah Deniz field. As part of the second stage of the development of the Azerbaijani Shah Deniz field, a 94-percent progress has been achieved within the Southern Gas Corridor project.

According to BP, for the third quarter of 2019, 16 wells were drilled as part of the second phase of the development of the biggest Azerbaijani gas field, Shah Deniz.

During the reporting period, about 12.2 billion cubic meters of gas were extracted from the Shah Deniz field, and about 2.6 million tons of condensate (about 21 million barrels) from the Shah Deniz Alpha and Shah Deniz Bravo platforms.

The production capacities of the rigs operating at the Shah Deniz field exceed 56 million standard cubic meters of gas per day.

During the third quarter, operating costs as part of the project amounted to about $481 million, capital expenditures - $818 million. The biggest part of the capital expenditures is related to the work as part of the second stage of the field’s development.

On June 30, 2018, first gas from the Shah Deniz field in Azerbaijan was sent to Turkey along the first segment of the Southern Gas Corridor (SGC) - from the Sangachal terminal expanded for Stage 2 of the Shah Deniz field along the expanded South Caucasus gas pipeline.

As part of the second stage of the field’s development, additional 16 billion cubic meters of gas per year will be produced. Of these, 6 billion will be delivered to Turkey, and 10 billion to Europe. According to forecasts, as part of the second stage of the field’s development, gas production will exceed 25 billion cubic meters per year.

The South Caucasus gas pipeline and the TANAP gas pipeline, which are part of the SGC, are already supplying gas through the territories of Azerbaijan, Georgia and Turkey.

Gas extracted as part of both stages of the development of the Shah Deniz field, was exported from Azerbaijan in 2019.

In January 2019, it was announced that Azerbaijan produced 100 billion cubic meters of gas at the Shah Deniz gas condensate field. This success was achieved 12 years after the start of commercial gas production and from the start of the South Caucasus gas pipeline’s operation.

In March 2019, the European Bank for Reconstruction and Development (EBRD) suspended the loan allocation process for LUKOIL Overseas Shah Deniz Ltd as part of the second phase of the development project of Azerbaijan’s Shah Deniz gas condensate field.

At the time the deal was structured, hydrocarbon prices were lower than today. Prices rose later, and as a result, LUKOIL company concluded that the project can be financed through internal cash flow and that there is no need for external loans. As a result, the EBRD loan allocation project was canceled.

This loan should have been allocated for the construction of two offshore gas platforms, the drilling of 26 subsea wells, the laying of 500 kilometers of pipes under water and the expansion of the Sangachal terminal.

The "Israfil Huseynov" pipe-laying vessel, used by Saipem company for laying pipes in the Caspian Sea within the project of the second stage of development of the Azerbaijani Shah Deniz gas condensate field, caught a fire on May 8, 2019. The explosion on the vessel was related to maintenance operations during pipe-laying activities.

The vessel resumed its activity in November 2019. The vessel resumed installation of the flowlines from the subsea well clusters to the Shah Deniz Bravo platform location.

In June 2019, the engineers involved in implementation of the second stage of the development of the Azerbaijani Shah Deniz gas condensate field, received the “Big Project” award from the UK’s Royal Academy of Engineering for 2019 for cooperation in implementation of this project.

US Emerson completed its $48 million contract for automation systems and cloud engineering software-as-a-service for the Shah Deniz 2 project in Azerbaijan in July 2019.

UK’s Petrofac, in a joint venture (JV) with the State Oil Company of the Republic of Azerbaijan (SOCAR), secured a Project Management Services contract to support BP’s operations in Azerbaijan and Georgia in December 2019.

The exploratory drilling of deep-seated layers of the Shah Deniz field will be launched in 2020.

BP will close two offshore platforms, namely Chirag and Shah Deniz Alpha in Azerbaijan for scheduled maintenance. The maintenance operations scheduled for the second half of 2020 will last from one to three weeks.

The implementation of the third stage of the development of the Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea is one of the issues that depend on negotiations.

In these issues, everything depends on the economic efficiency of investments and recoverable resources.


Absheron project participants include SOCAR - 50 percent and France’s Total - 50 percent.

Engie, which previously owned a 20-percent stake, left the project in June 2017.

A contract on the Absheron field was signed Feb. 27, 2009 between SOCAR and Total.

Project status

The discovery of the field was announced in September 2011. A decision was made to drill an offshoot of the first exploration well to specify the data. The work was completed in 2012.

The results of the first exploration well indicate the existence of commercially attractive gas and condensate reserves. According to Total geologists, the reserves of Absheron amount to 326 billion cubic meters of gas and 108 million tons of condensate.

In 2019, completion of drilling of the main well at the Absheron field, which will later be used for gas extraction at this field, became an important result as part of the project.

The well consisted of two shafts, the first of which was designed for assessment of the potential of the Absheron field.

The depth of this shaft is 7,411 meters. The semi-submersible drilling rig named after Heydar Aliyev was used for drilling work. This well became the deepest well in the Caspian Sea. The depth of the second shaft is 6,800 meters. The drilling was finally completed in October 2019.

SOCAR said it is preparing for the start of gas and gas condensate extraction at the Absheron field.

The first product is planned to be received in 2021, when the construction of infrastructure, communications, a platform and a transshipment point at the Oil Rocks is completed. The product will be transported along a pipe using a pipe-in-pipe technology to the transshipment point at the Oil Rocks, and then on land to the terminal.

The drilling operations at the field were conducted by Caspian Drilling Company (CDC).

Absheron’s reserves are estimated at 326 billion cubic meters of gas and 108 million tons of condensate.

The gas that will be produced from the Absheron field will be sold to the Azerbaijani state oil company SOCAR for use in the local market and will help meet domestic demand. The condensate will be delivered to Turkey via the Baku-Tbilisi-Ceyhan oil pipeline.

Bahar and Gum Deniz

On 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 Azerbaijani sector of the Caspian Sea.

The contract consists of two parts. The first part involves the rehabilitation and stabilization of production at the block of fields, while the second part - exploration at the Bahar-2 promising structure.

The shares of the operating company Bahar Energy Limited fully belong to the Greenfields Petroleum company from the US.

A 25-year contract has been concluded with the possibility of extension for another 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 in this project will hit $1 billion, according to preliminary estimates.

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

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

Project status

Сrude oil production at Azerbaijan’s Bahar-Gum Deniz block in the third quarter of 2019 was 723 barrels per day, a decrease of 11 percent relative to the second quarter of 2019, according to Greenfields Petroleum Corporation, US-based company, engaged in the block’s development.

“Sales volumes of Greenfields Petroleum Corporation at Azerbaijan’s Bahar-Gum Deniz block in the third quarter of 2019 averaged 610 barrels per day for crude oil and over 17 million cf/d (483,651 cubic feet per day) for natural gas.

Oil price averaged $55.1 per barrel in the third quarter of 2019, a decrease of 21 percent in comparison to an average price of $69.6 per barrel in the third quarter of 2018.

In the third quarter of 2019, eight workovers were completed and the wells returned to production.

Workovers generally involve re-entering existing wells and restoring production by cleaning out sand and debris, adding perforations or changing out failed electric submersible pumps (“ESPs”). Re-development of South Gum Deniz is moving forward with workover work on GD 430 to prepare the well for ESP installation.

Seven wells in total will be equipped with ESPs and will be powered by onsite power generation.

Gross gas production at the Bahar field in the third quarter of 2019 amounted to 19.9 million cubic feet (564,043 cubic meters), which is one percent less compared to the second quarter of last year.


In 2008, SOCAR and Nobel Oil Exploration & Production Ltd created SOCAR-Umid LLC, to carry out drilling on the prospective "Umid" structure in the Azerbaijani sector of the Caspian Sea. SOCAR owns an 80-percent share and the Nobel Oil company has 20-percent share in the joint venture. In early 2017, a risk service contract was signed regarding exploration and development of the Umid-Babak block.

SOCAR announced the discovery of the Umid field in 2010. The volume of the field's reserve exceeds 200 billion cubic meters of gas and 40 million tons of condensate, according to the results of drilling the first exploration well and the estimations of SOCAR specialists.

The Umid field is located 75 kilometers from Baku, 40 kilometers away from the coast. The first geophysical work was carried out there in 1953, the second, improved one in 1972. Nine wells were drilled there from 1977 to 1992. However, none of them produced any results.

The reserves of Babak perspective structure may amount to 400 billion cubic meters of gas and 80 million tons of condensate, according to preliminary data.

Project status

The risk service contract (a contract with a minimum guarantee of compensation) for exploration and development of an offshore block including the Umid gas field and the promising Babak structure in the Caspian Sea was signed between SOCAR and SOCAR Umid Oil and Gas Ltd on January 12, 2017.

SOCAR-Umid LLC, which was engaged in the development of the Umid gas field, was affiliated to the SOCAR’s Azneft Production Union.

SOCAR has a long-term program on the development of the Umid-Babak block, thanks to which the company will be able to receive up to five billion cubic meters of gas annually from the Umid field alone.

In May 2018, Financial Director of Nobel Upstream Huseyn Gasimov said that the annual gas production at the Umid-Babak block at the first stage of its full-scale development may reach 3-4 billion cubic meters of gas per year. These volumes are planned to be supplied to the growing domestic market. At the next stage, another 3-4 billion cubic meters of additional gas will be added to the production, which are planned to be sold in the regional market, and at further stages in the European market through the Southern Gas Corridor.

In 2018, SOCAR received 663 million manat ($390 million) from the state budget to increase the authorized capital in connection with drilling at the Umid-Babak and Karabakh fields.

Satti self-elevating jackup drilling rig, owned by KazMunayGas, after modernization by SOCAR’s Caspian Drilling Company, may be primarily involved in the work which is carried out jointly with SOCAR and BP on the Absheron Peninsula, on the Umid block - Babak block, as well as other operations in the Caspian Sea.

Since the beginning of development, 2.8 billion cubic meters of natural gas and 443,000 tons of condensate have been produced at the Umid field.

SOCAR plans to begin gas production from the second platform at the Umid field in the fourth quarter of 2022. So far, there is only one platform in operation from which it is planned to drill four wells.

Exploration work on the “Babak” neighboring structure is scheduled for 2020. SOCAR said that in case of success, the first exploratory well may be converted into a production well.

The Babak field has yet to be drilled. SOCAR is preparing for exploration work on the structure, which is scheduled to begin in 2020.

SOCAR is preparing a project to drill the first exploratory well on Babak structure. If the results of the exploratory well’s drilling are positive, SOCAR will build a platform there at the first stage and drill 4-5 wells for production. Gas production itself at the Babak field may start in 2024-2025.


A 30-year contract on Shafag-Asiman was signed in October 2010. The exploration period will be four years, with possibility of extension for three more years. Two wells are to be drilled within the first phase. Two more wells will be drilled within the second phase, if necessary.

In the operational period the sides will implement joint operatorship within the project. Shared participation in the contract between BP and SOCAR is equal (50/50).

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

The block is located 125 kilometers south-east of Baku. Exploration work has not been conducted on the block yet. It is located at a depth of 650-800 meters with the depth of the reservoir at 7,000 meters.

Project status

BP-Azerbaijan finished the processing of three-dimensional geophysical studies conducted at the "Shafag-Asiman" in 2015.

BP doesn’t rule out the start of drilling the first exploratory well at the prospective Shafag-Asiman block in the Azerbaijani sector of the Caspian Sea in January 2020.

The pre-launch work is underway as part of preparation for the drilling.

BP has transferred the Heydar Aliyev mobile drilling rig to drill the first exploratory well at the Shafag-Asiman block, and is installing additional equipment. Afterwards, the equipment will be tested and the drilling operations will begin in the future.

BP believes that Shafag-Asiman has great potential and may become the second Shah Deniz field in case of discovery of commercial reserves.

Drilling is supposed to be carried out at depths from 6,000 to 7,000 meters, and the water depth at the drilling point is 624 meters. Drilling the first exploratory well will take 12 months.

The first production at Shafag-Asiman may be launched in 2030.


Araz-Alov-Sharg participating interests are: SOCAR – 40 percent, BP (operator) – 15 percent, Norwegian Statoil – 15 percent, US ExxonMobil – 15 percent, Turkish TPAO – 10 percent, Canadian Alberta Energy – 5 percent. Required investments in the project are about $4 billion.

Project status

In March, a “Memorandum on mutual understanding between Azerbaijan’s Ministry of Energy and the Ministry of Petroleum of Iran on the joint development of relevant units in the Caspian Sea” was signed. As expected, the parties will create a joint venture.

The oil and gas agreement between Iran and Azerbaijan provides for the development of two blocks in the Caspian Sea. Araz-Alov-Sharg is mentioned among the discussed blocks. Its development is frozen until an agreement on the status of the Caspian Sea between Azerbaijan and Iran is reached.

Although the Convention on the Legal Status of the Caspian Sea was signed in August 2018, there is still no information on the resumption of work at the Araz-Alov-Sharg structure.


SOCAR and Norway's Statoil signed a Memorandum of Understanding on the two prospective sites “Zafar” and “Mashal” in the spring of 2013. The memorandum envisages negotiations, coordination of basic commercial principles and conditions of a contract for the development and conclusion of the contract itself.

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

The investments in the project were estimated at about $2 billion with projected volume of oil reserves at 140 million tons, 100 million of which accounted for Zafar and 40 million for Mashal.

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.

Karabakh field

The Karabakh field was discovered in 2000. Its initial oil reserves amount to 100 million tons. SOCAR operates Karabakh field’s development. In December 2017, SOCAR and Equinor (former Statoil) signed a contract, which includes main commercial principles and provisions of the risk service contract regarding the Karabakh field.

Project status

On May 30, 2018, SOCAR and Equinor signed two risk-service agreements (RSA) regarding the Karabakh field in the Azerbaijani sector of the Caspian Sea.

In March 2019, the Azerbaijani Caspian Drilling Company Ltd (CDC) and the Norwegian Equinor Azerbaijan Karabakh BV (Equinor) signed a drilling contract. Under the terms of the agreement, Caspian Drilling Company will drill two wells at the Karabakh field for Equinor.

On Dec. 15, 2019, the Dede Gorgud semi-submersible floating drilling rig was delivered to the Karabakh field, where appraisal drilling will last about two months.

Drilling of wells at the Karabakh field from a new production platform is scheduled to begin in 2020. The work on the construction of a new production platform is still ongoing. The new platform will be designed for drilling of 12 wells.

Based on preliminary data, the Karabakh field may have more oil reserves than gas ones.

A platform can be installed at the field for both oil and gas production. By 2021, it is planned to extract the corresponding products using this platform.


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

Project Status

In March 2010, SOCAR and German RWE signed a memorandum of understanding on the Nakhchivan offshore perspective structure. Under the terms of the memorandum, companies should have undertaken all necessary work to prepare a PSA by March 10, 2011. However, the contract remains unsigned.

The field's reserves are projected at 300 billion cubic meters of gas and 40 million tons of gas condensate.

Shallow waters around the Absheron Peninsula

SOCAR and BP signed a PSA-contract on joint exploration at the potentially promising structures located in the shallow waters of the Absheron Peninsula on Dec. 22, 2014.

This agreement is part of the government's plan to fully explore all the coastal areas of the Azerbaijani sector of the Caspian Sea.

The parties to the contract were BP - 50 percent, SOCAR - 50 percent.

The area of water, covered by the PSA agreement between SOCAR and BP to carry out the development and exploration work in the shallow waters of the Absheron Peninsula, extends along the southern part of the Peninsula. The area reaches 1,900 square kilometers.

The sea depth is up to 40 meters in this territory, but the depth of the potentially productive strata is 3,000-5,000 meters.

Project status

BP in 2016 conducted primary seismic survey on potentially promising structures located in the shallow waters around the Absheron peninsula in the Azerbaijani sector of the Caspian Sea.

The primary results of data processing reveal large potential in the contract area.

Preparations for drilling in the Shallow Water Absheron Peninsula (SWAP) contract area in Azerbaijan are on schedule.

Seismic exploration in the area was carried out by a joint venture of SOCAR and WesternGeco (London) - Caspian Geo, at that time called Caspian Geophysical, as well as Geokinetics (Houston).

The work to obtain seismic data in 2D and 3D formats was completed in 2017. Based on the analysis of the data, three promising zones were identified - in the west, southeast and northeast. Accordingly, it was decided to drill three wells in these directions for more accurate assessment of the reservoir.

These appraisal wells are planned to be drilled with a Satti jackup rig. Drilling operations will be carried out by SOCAR’s CDC.

BP Azerbaijan said that the current plans include beginning of drilling operations on SWAP in the first half of 2020.

Block D230

In May 2016, BP and SOCAR signed a memorandum of understanding (MOU) to jointly explore potential prospects in the block D230 in the North Absheron basin in the Azerbaijan sector of the Caspian Sea.

The MOU gives BP the exclusive right to negotiate an agreement with SOCAR to explore and develop the D230 Block.

The block covers areas in a water depth of up to 300 meters with the reservoir depth of 3,000-5,000 meters.

Project status

In April 2018, Azerbaijan’s state oil company SOCAR and the BP signed a production sharing agreement in London on joint exploration and development of the D230 block.

According to the 25-year agreement, 50 percent of the stake will belong to BP, which will become the operator for the exploration period, and the remaining 50 percent will belong to SOCAR.

In November 2018, Azerbaijani President Ilham Aliyev approved the law on granting permission to accept, approve and implement a production sharing agreement for joint exploration and development at the prospective block D230.

BP will begin planning its first exploratory well in 2020.

BP and SOCAR offer to implement a geological exploration program, including the collection of 3D seismic data at block D230 and beyond, about 80 kilometers from Azerbaijan’s coastline at depths from 100 to 800 meters. Seismic exploration is planned to be carried out in 2019-2020 for a maximum of six months.

Seismic exploration will cover exploration lines in block D230, and one exploration line extending to the Ashrafi-1 well in the Ashrafi Dan-Ulduzu contract area.

The purpose of seismic exploration is to assess the prospects for hydrocarbons in this area, after which goals for potential future of the exploration drilling can be determined. This data will be used to inform about the extent and planning of exploration and development of the zone.

Caspian Marine Services company began negotiations with BP on the provision of two vessels for D230. D230 seismic surveys will be carried out by the Gilavar vessel.

The company also chartered the Turkan vessel together with its partner in the alliance Azerbaijan Caspian Shipping Company CJSC, which the company intends to involve in operations at block D230, especially to support supplies by the Gilavar vessel.


In September 2016, Malaysia’s Petronas oil and gas company and SOCAR entered into a memorandum of understanding (MoU) for the exploration, development and production of hydrocarbons at a block in the potentially promising structure Goshadash in the Azerbaijani sector of the Caspian Sea.

Petronas stated that the MoU on the development of the Goshadash block has expired.

After conducting technical and commercial assessments, Petronas decided not to continue negotiations on the development of the block.

The Goshadash structure is located in the north-western part of the Absheron archipelago, in 15 kilometers from the coast, at a distance of 35-40 kilometers from Baku. The depth of water here is 10-50 meters.

Project status

SOCAR is processing and interpreting the data obtained during a seismic survey on the Goshadash prospective structure. Further work is planned for a deeper analysis of the potential of the Goshadash perspective structure in Azerbaijan.

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Azerbaijan's banking sector ends January 2021 with profit
Foundation of several manufacturing enterprises laid in Iran's Qazvin Province
Uzbek-Korean JV to buy spare parts for metal detector via tender
USAID to promote start-up dev’t in Turkmenistan
President Aliyev: Any attempt to violate implementation of November 10th declaration will be very harmful for Armenia (VIDEO)
Iran reveals COVID-19 data for February 27
Bosnian TV channel visits liberated Azerbaijani Aghdam, reminds of Khojaly genocide
Azerbaijani police officers find ordnances left by Armenians in Khojavand (PHOTO)
Long-term energy demand impact of COVID-19 is modest
President Aliyev to Iranian reporter: Your question is a kind of an accusation (VIDEO)
New Zealand's largest city Auckland back to lockdown after COVID-19 case
Iran pins hopes on Swiss financial channel to purchase COVID-19 vaccines
Foreign journalists visit village where two-year-old Azerbaijani girl was killed by Armenians
Volume of cargo loaded, unloaded in Iran’s Chabahar port revealed
Weekly review of Azerbaijan's oil and gas sector
Eni Turkmenistan Ltd opens tender for catering, housekeeping services
Kazakhstan boosts imports of Switzerland-made products
Uzbek ministry, German Society for International Cooperation sign agreement
Uzbekistan, China expand mutual trade despite COVID-19
Georgia reports 373 new cases of coronavirus on Feb.27
Buy/sell operations at Iran Mercantile Exchange soar
Weekly review of Azerbaijani precious metals market
Baku Metro continues preparatory work for commissioning of new 'November' 8 station
Iran's exports to Russia increase
Uzbek-Korean JV to buy spare parts for pumps via tender
Kazakh airlines eye to launch several flights on Turkestan-Istanbul route
UNDP in Turkmenistan opens tender for services on seismic work
Volume of electricity generated by renewable energy power plants in Iran announced
Researcher talks monuments on ancient Azerbaijani lands vandalized by Armenians (PHOTO)
Uzbekistan reveals COVID-19 data for Feb. 27
Azerbaijan's MoD shares footage from Gubadly's Afandilar village (PHOTO/VIDEO)
Iranian currency rates for February 27
Remittances from Azerbaijan to Georgia show highest growth rate
Belarus considering possibility of supplying agricultural machinery to Turkmenistan
Turkmenistan’s Turkmenbashi Oil Refinery exceeds plan for kerosene production
Azerbaijani oil prices published
Kazakhstan's uranium mining company opens tender to acquire electro-technical materials
Issuance of construction permissions in Georgia down
Philippines extends partial coronavirus curbs in capital until end-March
Weekly review of Azerbaijani currency market
Kazakh gas supply company to attract equipment installation services via tender
Turkey's tourism industry puts hopes on safety measures for new season
Azerbaijani marketing platform plans to become regional player
Argentine health minister tests positive for COVID-19
Czech gov't declares new state of emergency over coronavirus
U.S. FDA advisors recommend approving Johnson & Johnson COVID-19 vaccine for emergency use
Increase in malware attacks makes cybersecurity more relevant than ever - Kaspersky Lab in Azerbaijan
South Korea vaccinates 18,000 to start ambitious COVID-19 campaign
US may announce new sanctions on Russia within weeks - White House press secretary
Founder of Indian Jet Airways eyes opening airline in Uzbekistan’s Namangan region
Saudi Arabia rejects U.S. intelligence report on Khashoggi's killing: statement
Israel registers 2,738 new COVID-19 cases, 769,971 in total
U.S. announces 'Khashoggi ban' for 76 Saudi individuals
Number of COVID-2019 cases across globe up by over 427,000 in past day
Slovenia confirms first case of coronavirus variant identified in S. Africa
UN Security Council adopts resolution on vaccination
UK records another 8,523 coronavirus cases, 345 deaths
Kazakhstan shows interest in supplies of Belarusian sugar, its manufacturing technology
Turkey reports 9,205 new COVID-19 cases, 2,683,971 in total
Iran, Russia emphasize need to coop. in agricultural sector
When will Georgia receive its first doses of the COVID-19 vaccine?
House poised to approve Biden's $1.9T coronavirus relief bill in Friday vote
Canada approves use of AstraZeneca COVID-19 vaccine
Azerbaijan discloses volume of liabilities of banks in Jan. 2021 accounting for deposits
Azerbaijan imposes restrictions on import of poultry meat from Estonian county
Amount of financial support of Kazakh manufacturing sector by Baiterek holding increases
Attracting FDI can help Georgia to boost exports of high-value food products - OECD
European Council extends mandate of special representative for South Caucasus
Kuwait reports 1,022 new COVID-19 cases, 189,046 in total
WHO says COVID-19 vaccine rollout in Africa has gathered steam
Armenia has always supported terrorism - MP
EU supports JCPOA commitments
Azerbaijan focused on rehabilitation, reconstruction of liberated lands - MP
Assistant to Azerbaijan's president talks country's success in int'l information field
Baku Stock Exchange to auction off Azerbaijani Central Bank's short-term notes
Azerbaijan records growth of GDP in non-oil sector over Jan. 2021
Azerbaijan discloses volume of fruits and vegetables exported since early 2021
Azerbaijan would like to bring new ideas, proposals to region with help of OSCE - MP
Uzbekistan, Tajikistan talk opening ground checkpoints
All Armenian prisoners of war have been returned to Armenia - Azerbaijani MP
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