First oil from West Azeri

January 6, 2006, 08:00 CET

Oil production has begun from the West Azeri platform on Azerbaijan’s Azeri-Chirag-Gunashli (ACG) field in the Caspian, where Statoil has an 8.56 per cent interest.

Total output from West Azeri is estimated to be around 70,000 barrels per day in 2006. The oil will be piped to the Sangachal terminal south of Baku, capital of Azerbaijan.

BP is operator for the Azerbaijan International Operating Company (AIOC), the 10-member consortium of licensees which is developing ACG.

West and East Azeri comprise phase II of the ACG project. This phase will represent more than 420,000 daily barrels when East Azeri comes on stream next year.

"It is a remarkable achievement to have commenced production four months ahead of an already-aggressive schedule," says Andrew Sanderson, Statoil's project manager for ACG.

"The established track record gives the AIOC partners great optimism for excellent delivery of the remaining full-field development activities and value creation."

Early oil production from Chirag began in late 1997. Central Azeri, which is phase I of the ACG project, came on stream in February 2005, and produced around 93,000 daily barrels in 2005. An average daily output of 230,000 barrels is expected in 2006.

The third phase covers the deepwater Gunashli field, which is due to commence production during 2008. This will bring the total ACG development to seven platforms.

Total output from ACG will be more than a million barrels per day by 2009.

It is estimated that 5.4 billion barrels of oil will be recovered within the duration of the production-sharing agreement.