Azeri agreement reached

August 31, 2001, 09:45 CEST

The first phase in the development of the Azeri-Chirag-Gunashli oil field in the Azerbaijan sector of the Caspian, was approved by the licensees today, 30 August.

Statoil has an 8.56 per cent interest in the BP-operated field.

Phase 1 comprises a new production platform with a design capacity of 400,000 barrels per day, a 30-inch-diameter oil pipeline to land, an extension of the Sangachal land terminal and a gas and water injection platform. Investments are estimated to be NOK 31 billion up to the planned production start in the first quarter of 2005.

When phase 1 reaches full production, today's rate of 120,000 barrels per day will rise to about 500,000 barrels per day.

Those present at the signing ceremony included Azerbaijan's president, Heydar Aliyev and Tor-Ivar Pedersen, vice president for the Statoil unit, international new ventures-eastern hemisphere. Also representing Statoil were Steinar Storm-Olsen, project manager for Azeri-Chirag-Gunashli and Georg Gundersen, vice president and head of the Azerbaijan office.

"This is a milestone for both Statoil and Azerbaijan," says Tor-Ivar Pedersen. "Azeri-Chirag-Gunashli is a major, good project and a lot of Statoil personnel have been involved in it."

Phase 1 is the first step towards a total development of the field. When it is fully developed by about 2010, plateau production could reach just over 1 million barrels per day.

The operator estimates that the field's recoverable oil reserves are around 4.6 billion barrels.