Azernews.Az

By Leman Mammadova

The development of Azeri Chirag Gunashli (ACG) fields, which laid the foundation for the development of oil production and exports in Azerbaijan, is continuously invested in.

According to the report released by BP, Azerbaijan International Operating Company (AIOC) has spent $ 1.19 billion on ACG bloc development project in January-September 2018, Report.az informed.

This amount is three percent less than in the same period last year.

During the three quarters of 2018, expenses for ACG amounted to approximately $ 367 million and operating costs to $ 825 million. The volume of operating expenses of ACG increased by 8 percent compared to 2017, while its capital expenditures decreased by 7 percent.

In 2019, AIOC is expected to increase oil production by 0.6 million tons to 30.9 million tons, and gas production by 5.9 billion cubic meters to 29.7 billion cubic meters.

The agreement on joint development and shared distribution of production from the block of ACG fields was signed on September 20, 1994, in Baku. Thirteen companies from eight countries (Azerbaijan, the U.S., Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) have participated in signing of the "Contract of the Century". In February 1995, the Azerbaijan International Operating Company (AIOC) was established.

Proven oil reserves of ACG block of oil and gas fields are estimated at 1.2 billion tons, while gas reserves make 350 billion cubic meters.

On September 14, 2017, a modified and re-developed agreement was signed on joint development and shared distribution of production from the Azeri, Chirag fields and the deepwater part of the Gunashli field (ACG). The new agreement provides for the development of the field until 2050.

The new ACG participating interests come 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.

ACG is the largest oil field in the Caspian Sea, covering more than 432 square kilometers. Oil extraction from the field began in November 1997.

The oil produced from the ACG field is exported to the world markets through the Sangachal Terminal, mainly through the Baku-Tbilisi-Ceyhan oil export pipeline and the West Stream Pipeline to Supsa.

So far, more than 3 billion barrels of oil has been extracted from the field and about $ 33 billion has been invested in the field.

Mewnwhile, the Shah Deniz Consortium has spent $ 1.558 billion on the development project of the Shah Deniz gas condensate field located in the Azerbaijani sector of the Caspian Sea.

Of this amount, operating expenses totaled more than $ 418 million, capital expenditures - about $ 1.14 billion. It is noted that the majority of capital expenditures are related to the Shah Deniz-2 project.

Total expenses for Shah Deniz decreased by 41 percent year-on-year, operating expenses increased by 13.6 percent, and capital expenditures decreased by 50 percent.

The agreement on the exploration, development and shared production of promising areas of Shah Deniz was signed on June 4, 1996. The agreement on the division of production was ratified on October 17, 1996.

The project participants are BP (operator - 28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Petronas (15.5 percent), LUKOIL (10 percent), NİKO (10 percent) and TPAO (19 percent).

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