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Major gas discovery in Azerbaijan’s Shah Deniz field

November 14, 2007, 11:28 CET

Gas condensate was encountered in the main target horizons extending the field to the south. The well, named SDX-04, also discovered a new high pressure reservoir in a deeper structure.

The exploration discovery represents a potentially significant find. There will be further appraisal to fully delineate the new structure in the next few years. 

Double the output
“Shah Deniz is a big gas and condensate field by international standards,” says StatoilHydro’s executive vice president for International Exploration and Production, Peter Mellbye. “We are very pleased that the well has proven that there are reserves that have the potential of more than doubling the output from the field,” he says.

Results confirm sufficient gas at Shah Deniz for a second stage of development.  Although further work is required to define this second phase of development, it is likely to be on a similar or larger scale as the Stage 1 development of 8.6 bcma. 

“We believe that gas from the Stage 2 development can contribute to cover the domestic demand for gas in Azerbaijan, as well as supplying gas not only to the regional markets Georgia and Turkey, but also to markets in the European Union,” says Mellbye.

Potential for export to Europe
“By extending the Shah Deniz value chain beyond Turkey, Azerbaijan will become a supplier of gas to Europe, and the first step in making the fourth corridor for gas supply to Europe will be made. We are ready to work with Azerbaijan and our partners to commercialise the gas from Stage 2”, says Mellbye.

He emphasises that with a 25.5 percent share, the field will contribute significantly to StatoilHydro’s international production for many years.

The Shah Deniz field lies in water depths between 50 metres and 600 metres, and the new discovery was made after drilling to a Caspian record depth of more than 7,300 metres in the south western part of Shah Deniz.

The parties to the Shah Deniz production sharing agreement (PSA) are: 
 BP (Operator)  25,5 %
 StatoilHydro  25,5 %
 SOCAR  10 %
 LUKOil  10 %
NICO 10 %
Total 10 %
TPAO 9 %