BP Plc has completed drilling of the first production well to extract gas from deep-lying reservoirs in the Azeri-Chirag-Gunashli block, the company's vice president for projects in Azerbaijan, Georgia, Turkey, the Middle East and North Africa, Matt Kirkham, said at the 11th ministerial meeting of the Southern Gas Corridor Advisory Council in Baku on Friday.
"Drilling of the first production well, which was launched from the West Chirag platform last year, has now been completed. We expect the first production of gas from deep reservoirs in the ACG block to begin by the end of this year, after the well is fully completed and tied into the existing infrastructure [through which the gas will be delivered to the shore]," he said.
The well is significant, as it will also serve an appraisal function, Kirkham said. Gas reserves in the deep-lying layers of ACG are quite large, he said.
As reported, the ACG project shareholders signed a second amendment to the existing PSA on September 20, 2024, in Baku, allowing for gas production from deep-lying layers in the block. The document provides for exploration, appraisal, development and production of free natural gas reserves in the Azeri-Chirag-Gunashli fields.
The amendment will be valid under the same terms as the PSA - until 2049. The shareholders' equity participation in the ACG deep gas project corresponds to their shares in the existing contract.
Free natural gas reserves in the deep-lying layers of the block are estimated at 4 trillion cubic feet (about 112 billion cubic meters).
At the first stage, production of deep gas from the ACG block is expected to reach around 0.5 bcm per year. Gas from the first drilled appraisal well will be sold to the State Oil Company of the Azerbaijani Republic.
The original contract for development of the Azeri, Chirag, and deepwater portion of Gunashli fields was signed in 1994 and was set to expire in 2024. However, in September 2017, a new agreement was signed extending the contract to 2049.
Under the new agreement, the equity shares in the project are as follows: BP plc - 30.37%, SOCAR - 31.655%, Hungary's MOL - 9.57%, U.S. ExxonMobil - 6.79%, India's ONGC Videsh - 2.925%, Japan's Inpex Corp. - 9.31% and Itochu Oil - 3.65%, and Turkey's TPAO - 5.73%. (April 7, 2025, Source: https://interfax.com/newsroom/top-stories/110801/)
AZERBAIJAN - Natural Gas - Production