BAKU, Azerbaijan, July 15. bp, as the operator of hydrocarbon development at Azerbaijan's key Azeri-Chirag-Gunashli (ACG) and Shah Deniz fields, is prioritizing the maximization of recoverable reserves while fulfilling commitments to reduce greenhouse gas emissions, Vice President for the Caspian region, Communications and External Affairs Bakhtiyar Aslanbayli told Trend in an exclusive interview.
Referring to the future of ACG, he highlighted two main directions: continuing oil production, ongoing since 1997, and expanding gas production from both shallow water and deep reservoirs of ACG.
"We are as excited about ACG's future as we have been about its remarkable 30-year journey since the signing of the 'Contract of the Century' in September 1994. This block forms the cornerstone of our future plans," emphasized Aslanbeyli.
According to him, bp's primary objective currently is to maximize recoverable reserves from ACG, leveraging a wide range of innovative technologies employed in the Caspian region.
"This year, we launched a $370 million high-resolution 4D seismic program at ACG, the largest bp-led initiative of its kind. Spanning five years, this unique program focuses on the 'Balakhani Formation' and 'Fasil Formation' (productive reservoirs). Covering 740 square kilometers, the program will monitor the ACG area five times, enhancing our understanding of reservoir formations and advancing our goals to enhance oil production at ACG. We are pleased to report that over 70 percent of this year's planned work under the 4D seismic program has already been completed," stated the vice president.
He noted that for oil production at ACG, bp has high expectations for the seventh production platform, Azeri Central East (ACE), which commenced operations in April 2024.
"At ACE, oil is currently being extracted from one well, producing approximately 8,000 bpd. By year-end, we plan to drill two additional production wells, increasing production to 24,000 bpd this year," stated the bp vice president.
He emphasized that, in terms of technology and digitalization, ACE represents bp's most advanced platform globally.
"We are confident that ACE will significantly contribute to the sustainable and secure supply of energy resources from the Caspian Sea for decades to come," Aslanbeyli concluded.
ACE is projected to reach its peak oil production of 100,000 barrels per day within the next few years, which will help stabilize production decline at the platform.
Regarding the prospects for extracting natural gas from the ACE block, the bp vice president highlighted that a successful well has already been drilled from the Chirag platform into a deep reservoir on the southern flank of the ACE. This success has bolstered optimism about future natural gas recovery from ACE's deep layers.
"Based on data analysis from the initial well, we have planned a second well to be drilled from the West Chirag platform in 2024. We aim to gather additional natural gas data from this well and convert it into a production well, marking ACE's first deep-gas production well for extracting natural gas from ACG," Aslanbeyli explained.
The bp vice president indicated that the first gas from ACG's deep-gas reservoir is scheduled for production in 2025.
Since the beginning of production at ACG in autumn 1997, approximately 591 million tons of oil and over 221 billion cubic meters of associated gas have been extracted.
The stakeholder distribution in ACG is as follows: bp (30.37 percent), SOCAR (25.0 percent), MOL (9.57 percent), INPEX (9.31 percent), Equinor (7.27 percent—the sale to SOCAR was finalized in December), ExxonMobil (6.79 percent), TPAO (5.73 percent), ITOCHU (3.65 percent), and ONGC Videsh (2.31 percent). The ACG contract expires in December 2049.
"We will celebrate the 30th anniversary of the ACG development contract this September. At the Caspian Oil & Gas Exhibition in June 2024, we showcased the 30-year history of successful ACG development, highlighting our strong cooperation with Azerbaijan and significant achievements in the country's energy sector," Aslanbeyli emphasized.
Gas strategy
Aslanbeyli highlighted plans to begin implementing the project for a special compressor platform at the Shah Deniz field starting in the second quarter of 2025.
To note, gas and condensate production at Shah Deniz commenced in December 2006.
"Our goal is to extend the period of stable production at Shah Deniz and enhance gas sales by extracting additional volumes. To achieve this, we intend to construct a new compressor platform, which we view as a technically viable and economically sound solution," he emphasized.
He added that the platform will be operatorless and remote-controlled, operated from the Sangachal onshore terminal via a high-voltage electric cable.
"The compressor platform project is under development and is scheduled to commence implementation in the second quarter of 2025. This project represents the third stage of Shah Deniz's development, underscoring the field's pivotal role in Azerbaijan's gas future," he highlighted.
In the first half of 2024, Shah Deniz achieved peak production, producing 14 billion cubic meters of natural gas. Over the entire development period, the field has yielded a total of 223 billion cubic meters of gas and 46.6 million tons of condensate.
"The current year marks significant milestones for us. In February, we achieved a major goal by commencing gas and condensate production from the first well on the remaining fifth wing of Shah Deniz, specifically the northeast wing. Within the next year, we plan to operationalize two more wells on this wing, fulfilling our commitments for gas supply from Azerbaijan to global markets," the VP emphasized.
He highlighted that a total of 21 wells have been drilled as part of the full-scale development of Shah Deniz (phase 2), distributed across the northern, western, southeastern, southwestern, and northeastern wings.
"As we pursue the expansion of gas production in Azerbaijan, alongside the Shah Deniz project, including the future compressor platform, we are actively exploring new gas sources. For instance, we are optimistic about potential gas deposits in the Azeri-Chirag-Gunashli field block and plan to drill the first production well there this year for initial gas production in 2025. Additionally, we are evaluating hydrocarbon reserves from the SAX01 well in the Shafag-Asiman Caspian block," said Aslanbeyli.
He highlighted that the SAX01 exploration well, completed in March 2021, reached a depth of 7,189 meters and encountered gas condensate reserves in some intervals of the productive Fasil Formation. "We have processed all the data and interpreted the results, planning the next steps," he added.
Aslanbeyli emphasized that, as part of its commitment, bp will continue supporting Azerbaijan in its efforts to increase gas exports.
Environmental initiatives
bp's vice president announced that the deployment of the 240 megawatt solar power plant project in Jabrayil will slash overall emissions from bp's regional operations by 11 percent.
"We are currently advancing the 240 megawatt solar energy project in Jabrayil. Commercially, this initiative is backed by the decarbonization of operations at the Sangachal terminal and its electrification. This marks the debut of Azerbaijan's Virtual Power Transmission Mechanism business model, enabling solar power generation in Jebrail to be transmitted to the local grid with an equivalent volume received in Baku's Garadagh district for the Sangachal terminal via a swap with Azerenerji. This integrated project is economically viable, aiming to reduce gas usage at the Sangachal terminal for power generation and thereby cut total emissions from bp's regional operations by 11 percent," Aslanbeyli said.
He highlighted that the gas volumes resulting from bp's planned initiatives will be exported, bolstering the reliability of Azerbaijani gas supplies to international markets.
"We have made substantial strides in collaboration with the Ministry of Energy and Azerenerji on the technical and commercial aspects of this multifaceted project, and we anticipate making a final investment decision later this year. The significance of the Jabrayil solar energy project in advancing Azerbaijan's energy transition cannot be overemphasized," he said.
SOCAR and the Azerbaijan Investment Company (AIC) are also involved in the project. Details regarding their share participation will be clarified in the autumn.
Aslanbeyli emphasized that bp plans to expand collaboration with SOCAR into new areas to support Azerbaijan's energy transition.
"Looking ahead, we will work closely with SOCAR on new projects in renewable energy, decarbonization, and electrification in Azerbaijan. This requires an innovative approach, and we aim to lead in this endeavor," said bp's vice president for the Caspian region.
He highlighted bp's ongoing efforts to enhance safety and efficiency and its commitment to reducing greenhouse gas emissions and decarbonizing oil and gas production.
"We've recently deployed technologies to measure methane emissions across all our regional sites. This will improve measurements, enhance our understanding, establish new baselines, and contribute to bp's global goal of a 50 percent reduction in methane emissions," Aslanbeyli explained.
He highlighted another significant green initiative by bp in Azerbaijan: the ongoing project to replace diesel generators at the Shah Deniz Alpha production platform with electricity sourced from the neighboring Shah Deniz Bravo platform.
"This initiative will not only reduce carbon dioxide emissions at Shah Deniz Alpha but also enhance operational efficiency at the Shah Deniz gas condensate project," the bp vice president explained.
He also mentioned that bp and SOCAR have committed to the Methane Guiding Principles (MGP) and signed a bilateral memorandum of understanding, contributing to the international Global Methane Initiative (GMI) launched under the MGP in November 2023.
"This collaborative effort aims to accelerate methane emission reduction on a national scale. Together with SOCAR, we aim to coordinate actions among key stakeholders in Azerbaijan, including partner companies, research institutes, and government representatives, to develop a robust roadmap for methane emission reduction tailored to Azerbaijan's energy sector. We believe that by working together, we can effectively seize opportunities to combat methane emissions for the benefit of industry, society, and the government," he concluded.
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