In Terms of Commercial Attractiveness, "Azeri-Chirag-Guneshli" Has Proven to Be The Most Appealing Oil Project in the Caspian Basin
In Terms of Commercial Attractiveness, "Azeri-Chirag-Guneshli" Has Proven to Be The Most Appealing Oil Project in the Caspian Basin
In two days, it will be 30 years since the signing of the "Contract of the Century" - the production sharing agreement (PSA) for the deepwater Caspian fields of "Azeri-Chirag-Guneshli". The contract was initially signed for 30 years. However, on September 14, 2017, it was extended until 2050. Production of the first oil began in early November 1997.
According to bp-Azerbaijan (the project's operator), as of July 1, 2024, approximately $56.7 billion had been invested in the ACG project (of which $45.5 billion were capital expenditures). As a result, 4.39 billion barrels of oil have been produced.
Is this amount of expenditure for the ACG project high or low? This question can be answered by comparing ACG with another Caspian project - the Kazakh mega project "Kashagan" (discovered in 2000, with recoverable reserves estimated at around 1.3 billion tons of oil, and production only began in October 2016). For the Kashagan project, approximately $56 billion in capital expenditures was invested to extract the initial volumes of oil. Another comparison can be made with the “Tengiz” field development project, located onshore in Kazakhstan (discovered in 1979, with reserves of over 1.1 billion tons, development began in 1985, and the Kazakh government signed an agreement with foreign investors in April 1993). The capital expenditures alone for the expansion project of the “Tengiz” field (from 26 million tons to 38 million tons) exceed $46 billion.
It should be noted that during this time, 229.9 bcm of associated gas have also been produced at the ACG contract area. Of these volumes, only 56.9 bcm have been converted into marketable volumes, while 173 bcm have been reinjected into oil wells to maintain reservoir pressure.
According to the contract, associated gas at the Sangachal terminal is transferred to the State Oil Company of Azerbaijan free of charge.
Energy
-
BP hopes that its participation in the development of the "Karabakh" oil field and the "Ashrafi-Dan Ulduzu and Aypara" (ADUA) structures in the Azerbaijani sector of the Caspian Sea will be an opportunity to implement international standards within these projects.
-
Established in 1999, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) currently holds assets exceeding $60 billion, which is roughly 80% of the country’s economy, SOFAZ’s Executive Director Israfil Mamedov said at the annual meeting dedicated to the 25th anniversary of the Oil Fund’s establishment. He noted that the revenue from managing SOFAZ’s assets has already surpassed $15 billion.
-
Azerbaijan is expected to supply Bulgaria with 2 bcm of gas in 2024, Azerbaijan’s Ambassador to Bulgaria, Huseyn Huseynov, stated in an interview with Euronews Bulgaria. The diplomat emphasized that energy is one of the priority areas in bilateral relations between Baku and Sofia.
-
Kazakhstan plans to increase the volume of oil transit through the Baku-Tbilisi-Ceyhan (BTC) pipeline, Azerbaijan’s Ambassador to Kazakhstan, Agalar Atamoglanov stated. According to him, Azerbaijan and Kazakhstan, as traditional energy exporters, are actively developing cooperation in this field.
Leave a review