BP to launch exploratory drilling on Shah Deniz in 2020

16:56 - 30.05.2019


May 30, Fineko/abc.az. BP plans to start exploration drilling on Shah Deniz field in 2020 in order to study the potential of deep-seated formations.

The statement was made in Baku on Thursday at the Caspian Oil&Gas 2019 conference by BP Regional President for Azerbaijan, Georgia and Turkey Gary Jones.

"In 2020, we plan to conduct exploratory drilling on Shah Deniz field to study the potential of deep-seated layers of this contract area," Mr. Jones said.

He pointed out that in 2019 the Company plans to start exploration work on contract area Shafag-Asiman.

"In case of successful exploration, the reserves here could be commensurate with the reserves of Shah Deniz," Mr. Jones added.

The contract for the Shah Deniz field development was signed in Baku on 4 June 1996 and ratified by the Milli Majlis on 17 October of the same year. The participants of the Shah Deniz project are BP (operator: 28.8%), Petronas (15.5%), SOCAR (16.7%), LUKOIL (10%), NICO (10%), and TPAO (19%).

Currently, gas extraction from Shah Deniz field is carried out from the Alfa and Bravo platforms.

SOCAR president Rovnag Abdullayev stated earlier that semi-submersible floating drilling rig ‘Heydar Aliyev’ will be used in the drilling of the first exploration well on Shafag-Asiman structure. Currently, this rig is used for drilling of first production well ‘ABD-001’ on Absheron field. According to Abdullayev, the rig will finish those operations in 3rd of 2019.

The depth of the first exploration well on Shafag-Asiman structure will be about 6,500-7,000 m. High pressure and high temperatures are expected here during drilling. The depth of the sea in the area of the structure ranges from 600 to 800 m. According to preliminary data, the productive thickness is about 3 km and begins with depth of 5 km to 8 km. 3D seismic studies were carried out on the structure.

SOCAR estimates that Shafag-Asiman structure reserves amount to 500 bn cu m of gas and 65 million tons of condensate.

The contract for the development of the block between SOCAR (State Oil Company of Azerbaijan) and BP Exploration was signed in July 2010 and came into force in June 2011. The equity participation of the parties in the contract is 50/50. The contract period is 30 years with the possibility of its extension by 5 years more.

Under the terms of the contract, if the exploration program confirms oil reserves, then the bonus will be $1 million for every 100 million barrels. A bonus of $50 million should be paid within three days after the start of commercial development on the block.

In addition, BP Exploration should pay annually acre payments to Azerbaijan in the amount of $2,000 per sq km of the contract area.

The total area of Shafag-Asiman block is 1,100 sq km. No exploration work has been conducted here so far.

 

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