BP starts drilling first well to produce non-associated gas at Azerbaijan's ACG block
BAKU. Sept 23 (Interfax) - BP Plc has started to drill a first well to produce non-associated gas at the Azeri-Chirag-Gunashli (ACG) block offshore Azerbaijan, Hungary's MOL, a project shareholder, said in a press release.
"Drilling of the initial producing well has already started from the West Chirag Platform, with first gas expected in 2025. The well is important as it will deliver appraisal through production which is expected to underpin future development plans," MOL said.
"ACG plays a key role in the security of energy supply of Central Europe. The production of the field gives us crude oil sourcing flexibility for our refineries both in Slovakia and Croatia so the whole region benefits from this partnership," said Zsolt Hernadi, Chairman and CEO of the MOL Group.
"I am looking forward to further exploration successes in Azerbaijan onshore in addition to the ongoing offshore ACG development," he said, commenting on a memorandum of understanding that MOL signed with State Oil Company of the Azerbaijani Republic (SOCAR) to evaluate potential exploration opportunities in the Shamakhi-Gobustan region.
MOL said the ACG non-associated gas resources are believed to be up to 4 trillion cubic feet or around 112 billion cubic meters in place.
BP in Azerbaijan confirmed that drilling of the first production well for the non-associated gas or NAG project at ACG had begun, saying that in accordance with the addendum signed on September 20, SOCAR and its partners were planning next steps to produce gas from deep reservoirs at the ACG block. "As part of this, an initial well is being drilled to produce gas from two priority reservoirs. It has been agreed that SOCAR will be the buyer of all gas produced from the initial well," the company said.
The shareholders of the project to develop the ACG block on September 20 signed a second addendum to the September 14, 2017 production sharing agreement (PSA) on the project to enable production of gas from deep reservoirs at the block. Under the addendum, he companies will move ahead with the exploration, appraisal, development and production of natural gas resources at the Azeri and Chirag fields and the deep water portion of the Gunashli field. The addendum is effective until the end of the existing ACG PSA in 2049. The participating interests of the parties in the deep gas project are the same as in the existing ACG PSA. BP is still the project operator.
BP has a 30.37% stake in the project and SOCAR holds 25.0%. The other parties are Hungary's MOL with 9.57%, Norway's Equinor with 7.27%, ExxonMobil (SPB) with 6.79%, Turkey's TPAO with 5.73%, Japan's Inpex and Itochu with respectively 9.31% and 3.65%, and India's ONGC Videsh with 2.31%.
In December 2023, Equinor signed an agreement to sell its stake in ACG to SOCAR. The deal will be considered closed upon the fulfillment of a number of obligations by the parties. In July 2024, ONGC Videsh Limited said it had signed a final agreement with Equinor to buy a 0.615% interest in ACG. This deal is expected to close before the end of the year.
