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Wednesday, 13 September 2017 14:00

Baku to host signing of new agreement on Azeri-Chirag-Guneshli On September 14 Featured

Baku to host signing of new agreement on Azeri-Chirag-Guneshli On September 14

The signing of the contract on development of deep-lying layers at Azeri-Chirag-Guneshli field will be held tomorrow on September 14, Caspian Energy News reports with reference to the informed sources of the company participating in the project. President of Azerbaijan Ilham Aliyev, as well as BP CEO Bob Dudley are expected to attend the agreement signing ceremony.

A risk-service agreement is expected to be signed, where SOCAR’s share will make at least 20%. The term of the contract will be extended till 2050. Azeri-Chirag-Guneshli (ACG) envisages production of additional 233 bcm of gas and 44 mln tonnes of condensate. This data is based n the results of 8 exploration wells drilled earlier and not relating to the contract horizons.

As early as 2007 the  British BP requested the government of Azerbaijan to start negotiations on new agreement for development of lower horizons of ACG. The legal form of the agreement was the subject of negotiations as SOCAR insisted on the new form of risk-service agreement instead of the production sharing agreement (PSA) which was traditionally applied in Azerbaijan.

SOCAR has earlier declared that production at deep lying horizons of ACG would start in 2017.

In his recent speech President of Azerbaijan Ilham Aliyev stated that the contract would be signed if all the conditions of Azerbaijan are observed.

According to the present psa, ACG project partners got a right to develop oil horizons just till the Pereriv formation.  The capacity of Nadkirmakin and Podkirmakin formations, which lie deeper, exceeds the capacity of those which are under development now.  Formations under the Chirag and Guneshli block will be developed at the first stage. Azeri block comes in the second stage.

The contract on exploration, development and production sharing at Azeri-Chirag-Guneshli contract area was signed on September 20, 1994 in Baku and ratified by Milli Mejlis on December 12. ACG project parties are BP (35.8%), SOCAR (11.6%), Chevron (11.3%), INPEX (11%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), ITOCHU(4.3%) and ONGC Videsh Limited (OVL) (2.7%).

 

Person in charge of the newsline:  Fidan Isayeva 

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