TODAY.AZ / Business

BP announces $500 M extension to its drilling and engineering contract in Azerbaijan [UPDATE]

16 April 2019 [13:50] - TODAY.AZ

By Azernews


By Leman Mammadova

BP as operator of the Azeri-Chirag-Gunashli (ACG) oil and Shah Deniz gas fields in the Caspian Sea announced today a $500 million extension to its drilling and engineering contract in Azerbaijan, Trend reports citing BP.

The new contract has been awarded to the Turan Drilling & Engineering Company LLC which is a KCA Deutag and SOCAR AQS joint venture.

This represents another major contract awarded by BP as operator in the Caspian to a company with a local partner. It builds on the successful local content development strategy that BP and its co-venturers set from the start of their involvement in the region as a priority area of contribution to local capacity-building and enhancement of the local market. It also is in line with BP and its co-venturers’ business objectives to develop Caspian resources ever more efficiently and competitively working closely with the Government and SOCAR.

The contract covers offshore operations and maintenance activities for seven platform rigs operated by BP including the Central, East and West Azeri, Deepwater Gunashli, West Chirag, Chirag and Shah Deniz installations. The initial term of the contract is for five years with two one-year extension options.

“We are pleased to have awarded this contract to a joint venture between KCA Deutag and SOCAR AQS. As a long-term safe and efficient operator in the Caspian we welcome the combination of KCA Deutag’s more than 20 years of Caspian experience and international expertise with SOCAR AQS’s deep knowledge of the Caspian and their leadership within the Caspian drilling industry. BP operates world-class platform facilities in the Caspian as part of its 27 years successful business in the region. We hope this new contract will support our continued commitment to safety, development of local capabilities, cost efficiency, competitiveness and global industry standards,” Mike Zanghi, BP’s Vice President, Wells, said.

Established by signing Memorandum of Association between KCA Deutag and SOCAR AQS last year, Turan Drilling & Engineering provides services for drilling and engineering of oil and gas wells in the Caspian region and certain other parts of the Central Asia region.

The UK based company KCA Deutag, operating in Azerbaijan since 1995, offers design, construction support, platform services, commissioning and brownfield engineering services through its RDS and Offshore business units.

The company’s contract with BP envisages drilling and rendering maintenance services for seven BP platforms at the Central Azeri, East Azeri, West Azeri, Chirag and West Chirag, Deepwater Gunashli and the Shah Deniz gas condensate field.

ACG is the largest oil and gas field in the Caspian Sea, covering more than 432 square kilometers. A contract for the development of ACG block of oil and gas fields was signed in 1994 for 30 years. Oil extraction from the field began in November 1997.

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.

From early 2001 to January 1, 2019, the State Oil Fund of Azerbaijan (SOFAZ) received $ 138.2 billion as part of a project to develop the ACG block.

URL: http://www.today.az/news/business/181480.html

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