Gas production as part of Absheron full field development to start in 2029

BAKU. Oct 1 (Interfax) - Gas production as part of the full-scale development of the Absheron field in Azerbaijan's sector of the Caspian Sea is scheduled to begin in 2029, the State Oil Company of Azerbaijan Republic (SOCAR) said in its annual report for 2023.

Gas and condensate is currently being produced at the field as part of the first stage of its development. At the next stage, the full field development, project participants plan to make a final investment decision by the end of 2024 and produce the first gas by the second quarter of 2029, the report said.

Project participants assumed "necessary obligations" following regular meetings with the Joint Operating Company of Absheron Petroleum B.V. (JOCAP) to accelerate the FID and begin gas production as part of the full field development, the report said.

The Absheron field produced 1.1 billion cubic meters of natural gas and 400,000 tonnes of condensate in the first eight months of 2024, according to tentative data from Azerbaijan's Energy Ministry reported earlier.

As part of the first stage, gas production at the field is expected to increase by 90% year-on-year to 1.5 bcm in 2024 and condensate output is expected to grow by 70% to 523,000 tonnes. With full development, production is expected to increase to 6 bcm per year.

TotalEnergies and SOCAR announced the start of production as part of the first phase of the development of the Absheron field on July 10, 2023. The field had produced 1.2 bcm of gas and 484,000 tonnes of condensate as of May 1, 2024.

The Absheron block is located 100 km from Baku at a depth of 500 meters and the contract area is 747 square km. The initial estimate put the field's reserves at 350 bcm of gas and 100 million tonnes of condensate. The field will be developed in stages, with gas from the first stage intended for Azerbaijan's domestic market.

The term of the contract is 30 years. The Absheron project was equally owned by SOCAR and TotalEnergies, but in February 2024 they closed a deal in which they each sold a 15% stake to Abu Dhabi National Oil Company (ADNOC), giving the latter a 30% stake and reducing their interests to 35% each.