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First oil from Central Azeri

February 15, 2005, 10:15 CET

Oil production began on 13 February, from the Central Azeri part of Azerbaijan’s Azeri-Chirag-Gunashli (ACG) field in the Caspian, where Statoil has an 8.56 per cent interest.

Representing phase I of the ACG development, this project embraces two platforms – for production and compression/water injection respectively.

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

This world-class field contains in excess of 5.4 billion barrels of oil expected to be recoverable within the duration of the production sharing agreement.

Total 2005 output from Central Azeri is forecast to average 93,000 barrels of oil per day. Its production platform has an overall capacity of 420,000 daily barrels.

The Azeri oil is being landed through a dedicated pipeline laid to the AIOC-operated Sangachal processing and storage facility south of Baku, capital of Azerbaijan.

“Oil has been flowing from Chirag since late 1997,” explains Andrew Sanderson, Statoil’s project manager for ACG. “That represents the early oil production phase on ACG.

“Central Azeri marks the first important step in a full field development which is scheduled to raise total output to more than a million barrels per day by 2009.

“That will deliver significant volumes towards meeting the ambitious production targets set by the International Exploration & Production business area.”

Phase II of the ACG project involves West and East Azeri, which will be developed with separate production platforms. The first comes on stream in 2006, and East Azeri the year after.

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 and 448 wells.

Statoil will focus considerable effort in 2005 on increasing its influential role within AIOC, particularly with regard to initiatives on improved oil recovery.