Baku Energy Forum - BP’s regional president talks on work within Shah Deniz stage 2

BP’s regional president talks on work within Shah Deniz stage 2


Giant energy company BP continues to cooperate successfully with Azerbaijan in the development of Shah Deniz 2 gas field.

BP is just in the process of bringing on the next four wells in the second cluster as part of the development of the Azerbaijani Shah Deniz Stage 2 gas condensate field, Gary Jones, BP’s regional president for Azerbaijan, Georgia and Turkey, said in an interview with Energy Intelligence on January 24.

“So, there's various stages of additional gas coming through to ramp up, eventually into an additional 16 Bcm per annum,” he said.

“The initial Shah Deniz output was about 10 Bcm per year,” Jones said. “Once Shah Deniz 2 is fully on, with all four clusters, we will then get an additional 16 Bcm/yr, so there will be 26 Bcm/yr of Shah Deniz capacity of which 10 Bcm/yr will eventually end up in southern Europe.”

“We'll continue ramping up the gas due to go to Turkey,” he said.

“There's a ramp-up schedule that goes through the next few years, building up the sales to Turkey,” Jones said. “We've got six wells on at the moment. We'll have another two on in February, I would think, so that'll be eight wells on, and there are 26 wells for Shah Deniz 2, a good proportion of which have already been drilled, so that gives you an idea of where we are.”

There is some exploration activity on Shah Deniz, he said.

“There is the Shah Deniz Deep prospect that we will drill in 2020. So that could open up more options for gas, especially now that we've got the infrastructure in place,” Jones added.

Shah Deniz 2 is the starting point of the new Southern Gas Corridor, which will deliver Caspian resources directly to European markets for the first time.

So far, the total gas production from the Shah Deniz field has reached 100 billion cubic meters. Since 2006, more than 196 million barrels of condensate have been produced in the Shah Deniz field in total.

Its reserves are estimated at 1.2 trillion cubic meters of gas and 240 million tons of condensates. Within the second stage of the field development, the volume of gas production can be increased to 24 billion cubic meters per year, according to forecasts.

Shah Deniz field covers approximately 860 square kilometres. The field was discovered in 1999.

The discovery of the giant Shah Deniz field and the successful implementation of the project made Azerbaijan a country that can export a large amount of natural gas to the world.

The Shah Deniz gas field is still the biggest discovery of BP after the Prudhoe Bay oilfield in Alaska. 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 contract for the development of Shah Deniz field was extended from 2036 to 2048, while the shares of SOCAR and BP (project operator) in the project increased up to 16.7 percent and 28.8 percent, respectively, in accordance with the documents signed on December 17, 2013 in Baku.

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

BP is one of the world's most renowned oil and gas suppliers and its operations cover the safe development and production of key energy sources, and has been managing large projects for exploration, development and transportation of oil and gas fields in Azerbaijan for 26 years safely and reliably.

BP and SOCAR have long-term cooperation in the oil and gas industry of Azerbaijan.

So far, BP has invested more than $ 72 billion in projects in the country with its partners.

BP Azerbaijan is operator of ACG, Shahdeniz, Shallow Water Absheron Peninsula, Shafag-Asiman and Gobustan fields.