Caspian development approved

September 18, 2002, 16:00 CEST

A second phase of Azerbaijan’s Azeri-Chirag-Gunashli (ACG) development was formally approved today, 18 September. Statoil has an 8.6 per cent holding in this staged project.

The new phase will embrace the eastern and western flanks of the huge Caspian field, which comprises the Azeri, Chirag and Gunashli structures.

According to operator BP, the sections being developed in stage II contain about 1.6 billion barrels of oil.

Early production from the Chirag platform began in 1997, with daily oil output averaging around 130,000 barrels.

In August 2001, the partners sanctioned phase I of a full field development. This covers the central part of the Azeri structure and will yield about a million barrels per day when completed.

Production from ACG is due to be piped through the Baku-Tbilisi-Ceyhan (BTC) trunkline from the first quarter of 2005. This will be the third export system for Azeri oil.

“Development approval for phase II means we’ve passed an important milestone in the project’s history,” says Ottar Rekdal, senior vice president for international gas and power in International Exploration & Production.

“ACG is a massive project, with great significance both for the companies involved and for Azerbaijan.”

Apart from Statoil, the ACG partners are BP with 34.1 per cent, Unocal 10 per cent, Lukoil 10 per cent, Socar 10.3 per cent, ExxonMobil eight per cent, TPAO 6.8 per cent, Devon 5.6 per cent, Itochu 3.9 per cent and Hess 2.7 per cent.