News Archive

19 April 2019

ACG sanctions $6 billion Azeri Central East development project

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● Next stage of development of giant ACG field in Caspian Sea

● New 100,000 barrel a day platform expected onstream 2023

● New development approved in 25th year of landmark partnership The Steering Committee for the development of the Azeri and Chirag fields and the Deep Water portion of the Gunashli (ACG) field (including SOCAR, BP, Chevron, INPEX, Equinor, ExxonMobil, TPAO, ITOCHU and ONGC Videsh) today announced the sanctioning of the Azeri Central East (ACE) project, the next stage of development of the giant ACG field in the Azerbaijan sector of the Caspian Sea.

The $6 billion development includes a new offshore platform and facilities designed to process up to 100,000 barrels of oil per day. The project is expected to achieve first production in 2023 and produce up to 300 million barrels over its lifetime.

The sanction is the first major investment decision by the ACG partnership since the extension of the ACG production sharing agreement (PSA) to 2049 was agreed in 2017. More than $36 billion has been invested into the development of the ACG area since the original PSA was signed in 1994.

Construction activities, which will commence this year and run through mid-2022, will take place in country utilizing local resources. It is expected that, at peak, construction activities will create up to 8,000 jobs.

Rovnaq Abdullayev, president of SOCAR, said: “Today’s sanctioning marks yet another important milestone in the development of ACG for the benefit of the nation, which began 25 years ago with the signing of the Contract of the Century. For decades, SOCAR has been reinvesting Azerbaijan’s oil revenues in the development of a highly qualified workforce and modern industrial facilities in our country. Today we have world-class factories, production and installation complexes, marine vessels and highly-skilled local workforce, which have created opportunity for construction and installation of ACE platform by the Azerbaijani specialists throughout the country. Looking forward, we expect more than 3 billion barrels of additional oil production from ACG. This strategic decision supports Azerbaijan’s increasing role as an energy supplier for the regional and global markets.”

BP chief executive Bob Dudley said: “Working together over the past 25 years, this remarkable partnership has turned these world-class assets into tremendous benefits for the people of Azerbaijan. The ACE extension builds on that legacy and helps ensure that the next quarter century will be just as bright.”

Gary Jones, BP’s regional president for Azerbaijan, Georgia and Turkey, added: “Today’s announcement supports the long-term production plans we set for ACG when we extended the PSA. It demonstrates our commitment to work with SOCAR and Azerbaijan’s Government to continue to unlock ACG’s resources more efficiently and competitively.”

The Azeri Central East (ACE) project is centred on a new 48-slot production, drilling and quarters platform located mid-way between the existing Central Azeri and East Azeri platforms in a water depth of approximately 140 metres. The project will also include new infield pipelines to transfer oil and gas from the ACE platform to the existing ACG Phase 2 oil and gas export pipelines for transportation to the onshore Sangachal Terminal.

In addition, there will be a water injection pipeline installed between the East Azeri and ACE platforms to supply injection water from the Central Azeri compression and water injection platform to the ACE facilities.

ACG participating interests are: BP (30.37 per cent), SOCAR (25.0 per cent), Chevron (9.57 per cent), INPEX (9.31 per cent), Equinor (7.27 per cent), ExxonMobil (6.79 per cent), TPAO (5.73 per cent), ITOCHU (3.65 per cent), ONGC Videsh Limited (OVL) (2.31 per cent).



Notes to Editors:



● The ACG Production Sharing Agreement (PSA) was initially signed in September 1994. In September 2017, the PSA was amended and restated to be effective until the end of 2049. The new contract aimed to maximize the economic benefits of ACG for Azerbaijan and shareholders over the next 31 years.

● ACG is a super-giant field and to date more than 3.5 billion barrels (474 million tonnes) of oil have been produced from the field. The oil is exported to world markets, primarily via the Baku-Tbilisi-Ceyhan and Western Route Export pipelines.

● To date, total investments of more than $36 billion have been made into the development of the ACG field.

● ACG currently has eight offshore platforms - six production platforms and two process, gas compression, water injection and utilities platforms. The platforms export oil and gas to the Sangachal Terminal, one of the world’s largest oil and gas terminals, onshore near Baku.

● In 2018, total production from ACG averaged 584,000 barrels per day.

● The ACG field has been developed in several phases:

− Chirag has been producing since 1997 as part of the Early Oil Project (EOP);

− Azeri Project Phase 1 - Central Azeri began production in early 2005.

− Phase 2 included West Azeri, which started production in January 2006, and East Azeri started production in October 2006;

− Phase 3 - Deepwater Gunashli started up in April 2008; and

− the latest step of development the Chirag Oil Project – West Chirag, which has been producing since January 2014.

16 April 2019

Gas production increased by 25% in first quarter of 2019

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• SOCAR commissioned its highest-capacity well drilled at Umid field; it will produce 900 million cubic meters of natural gas annually

• During the quarter, the country produced over 9 billion cubic meters of natural gas, which is 25% higher than the same period last year

• Oil production remained stable in the reporting period

• Natural gas export grew by 27% and oil and petrochemical products export by 7,4% in the quarter In the first quarter of 2019, SOCAR together with its partners maintained a steady level of oil production in the country and achieved significant growth in gas production. The gas production in the country increased by 25% compared to the same period of previous year and amounted to 9.1 billion cubic meters1, oil production increased by 0.15% to 9.7 million tons2. SOCAR produced 1.85 million tons3 of oil and 1.56 billion cubic meters4 in the same period.

The new well drilled and commissioned at the depth of 6810 meters in the SOCAR’s Umid field had a significant role in the growth of the country’s natural gas export. SOCAR completed drilling of its highest-capacity well safely, implementing new technical methods in complicated geological structure. The potential daily output of the new well is estimated at 2.5 million cubic meters of gas and 400 tons of condensate. Rock samples were taken from the depth of 5940 - 6810 meters and examined. The temperature and layer pressure were also measured.

The engineering design of the project was implemented by the SOCAR’s Oil and Gas Research Institute. The project operator was SOCAR's Umid-Babek Operating Company, the drilling contractor - "SOCAR AQS LLC". Other contractors, including Baker Hughes GE Company, Cameron, Sumitomo, Azeri MI, Weatherford, Schlumberger, Interwell, Azorel, AXDG, CMS, Azlab LLC have made an important contribution to the successful implementation of the project. Generally, during the reporting period, SOCAR has implemented over 40,000 meters 5 of drilling work.

Rovnag Abdullayev, President of SOCAR said: "Umid has been the largest field discovered by the SOCAR geologists since Azerbaijan reached independence. Our drilling technicians have overcome all natural obstacles in this well despite its difficult geological structure. Implementing various technological solutions for the first time and completing drilling work at depths of more than 6800 meters - a record for the company - our drilling technicians successfully commissioned the SOCAR’s highest-capacity well. I cordially congratulate the staff of Umid-Babek Operating Company, all Azerbaijani oil workers and our people on the commissioning of this productive well with potential annual output of 900 million cubic meters."

In the first quarter of this year, about 5.8 million tons6 of crude oil was exported by SOCAR, the country’s gas export increased by 27% compared to the previous year and reached 3.2 billion cubic meters7. The main reason of gas export growth is the start of transportation of Shah Deniz-2 gas to Turkey through the Southern Gas Corridor. So far, 1.4 billion cubic meters of commercial gas has been transported through the pipeline. Export of oil and petrochemical products in the period of January-March 2019 amounted to about 456 thousand tons8, which is a 10.5% increase compared to the same period of last year.

1 - 9,075 B m3

2 - 9,694 M ton

3 - 1,846 M ton

4 - 1,561 B m3

5 - 40303 m

6 - 5,790 M ton

7 - 3,161 B m3

8 - 456379 t

10 April 2019

SOCAR Aviation to supply jet fuel to Istanbul Airport

Major tender to supply 700 000 tons of annual jet fuel awarded

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SOCAR Aviation, a subsidiary of SOCAR, the largest direct foreign investor in Turkey won a jet fuel tender announced by Istanbul Airport (İGA). Murat Erdoğan, Trading Manager of SOCAR Türkiye said they would supply 700 000 tons of jet fuel annually to Istanbul Airport for a five year period. It was announced by IGA that SOCAR Aviation has beaten off competition among foreign and local companies to win the tender to supply jet fuel to the airport. It will supply 700 000 tons of jet fuel annually for five years . SOCAR Aviation, entered the Turkish aviation sector in 2013 and in a short period has become one of the largest companies in the sector.

Murat Erdoğan, Trading Manager of SOCAR Türkiye, said SOCAR Türkiye has made significant investments in the liquid fuel sector: “The Turkish aviation sector is growing. Istanbul Airport is expected to require 60 percent of Turkey’s jet fuel consumption after reaching full-capacity operation. SOCAR Aviation is also growing together with Istanbul Airport and the Turkish aviation sector and we are proud that among the foreign and local companies we have been chosen to supply such a significant volume of jet fuel.” Erdoğan reminded that SOCAR’s other subsidiary STAR Refinery will produce 1.6 million tons of jet fuel after reaching full production. He said: “From the outset SOCAR Aviation has signed a number of important deals and has become a jet fuel supplier to some large airports. We will continue this to become stronger with STAR Refinery and extend operations within the integrated value chain of SOCAR Türkiye”.

Jet fuel market’s growing potential

SOCAR Aviation, which entered the aviation sector in 2013, began its first jet fuel supply with an agreement signed with Pegasus at Istanbul’s Sabiha Gökçen Airport. In 2016, developing its cooperation with global airlines, the sector’s leaders, SOCAR Aviation started to supply Turkish Airlines at Istanbul’s Atatürk Airport, Adnan Menderes in Izmir as well as Bodrum airport. This year it will supply half of Turkish Airlines’ fuel requirement at Sabiha Gökçen, along with Izmir, Bodrum, Antalya and Dalaman airports.