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BP to ramp up Azeri Shah Deniz gas output, sees flat ACG oil production

BP to ramp up Azeri Shah Deniz gas output, sees flat ACG oil production
FILE PHOTO: Signage for a BP petrol station in London, July 29, 2014. REUTERS/Luke MacGregor/File Photo -
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By Margarita Antidze

BAKU (Reuters) - BP plans to ramp up production at Azerbaijan's Shah Deniz gas field and keep output flat at the Azeri-Chirag-Guneshli (ACG) oilfields this year, a senior regional official at the British oil major said.

A BP-led consortium said last week that it produced on average 584,000 barrels per day of oil at ACG last year, a total of 29 million tonnes, almost unchanged from 2017 volumes.

Natural gas production from the Shah Deniz offshore field was 11.5 billion cubic metres (bcm) and condensate output came to 2.5 million tonnes, up from 10.2 bcm of gas and 2.4 million tonnes of condensate in 2017.

"We expect flat oil production from ACG and a rise in gas production at Shah Deniz in 2019 as we will continue to ramp up production on Shah Deniz throughout this year and ... in the next few years," Bakhtiyar Aslanbayli, BP's vice president for Azerbaijan, Georgia and Turkey, told Reuters.

He said the giant ACG oilfields, which have so far produced 3.5 billion barrels of oil, had the potential to yield another 3 billion barrels.

BP and Azerbaijan in 2017 extended to 2050 their agreement to develop the ACG fields, a deal dubbed by the Azeri government as "the contract of the century" when first signed in 1994. The arrangement was initially due to run until 2024.

Aslanbayli said a final investment decision regarding exploration and production on the east and central Azeri field envisaged by the extended contract would be made in the first half of this year.

MAINTENANCE AND DRILLING PLANS

Aslanbayli said the BP-led consortium planned two maintenance shutdowns of platforms at the central Azeri and west Chirag oilfields this year for a couple of weeks each, but both events were envisaged in production forecasts.

He said the first gas from the second stage of Azerbaijan's giant Shah Deniz field would be delivered to markets in Europe on time, in 2020.

"We are quite confident that we will be able to deliver gas from Shah Deniz II to Europe next year as it was planned," he said.

The Shah Deniz I field has been pumping gas since 2006, while output from Shah Deniz II is expected to reach 16 bcm of natural gas per year, with 10 bcm earmarked for Europe and 6 bcm for Turkey.

Aslanbayli said the capacity of pipelines along the Southern Gas Corridor running from Azerbaijan to Europe could be expanded if and when additional volumes of gas become available.

"That could be new sources of supply from Azerbaijan, from other fields," he said.

He called the Shafag-Asiman gas field "promising" and said BP planned to drill the first exploration well there this year.

"If everything is as promising as we expect, the Shafag-Asiman will actually have huge gas resources, which could be definitely comparable to Shah Deniz," he said.

He added that the company would drill two exploration wells in shallow waters off the Absheron peninsula and conduct testing exploration drilling on the Gobustan onshore oilfield later this year.

(Editing by Dale Hudson)

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