Unocal to develop Caspian AGC field

Unocal joined with other company representatives to sign a resolution sanctioning the Phase 3 development of the Azeri-Chirag- Deepwater Gunashli (ACG), a giant field in the Azerbaijan sector of the Caspian Sea.

Unocal joined with other company representatives to sign a resolution sanctioning the Phase 3 development of the Azeri-Chirag- Deepwater Gunashli (ACG), a giant field in the Azerbaijan sector of the Caspian Sea.

"The sanctioning of the Phase 3 development is an important step toward making this resource a million-barrel-per-day producing field," said Don Hansen, vice president for International Energy Operations. "With this phase, we will employ the lessons we learned from the development work to date in Phases 1 and 2 and capitalize on the economies of standardized field development.

"The Phase 3 project represents the next significant development phase of the ACG production-sharing agreement (PSA), which is operated by Azerbaijan International Operating Co. (AIOC). Phase 3 offshore facilities will include a 48-slot drilling, utilities, and quarters platform that is bridge-linked to a production, compression, water injection, and utilities platform in Deepwater Gunashli.

The start of oil production from Phase 3 is currently planned for mid-2008. All associated gas, except for fuel requirements, will be delivered to the State Oil Company of Azerbaijan (SOCAR). The field's gross recoverable oil is estimated at around 5.4 Bbbl.

Unocal Khazar Ltd., a wholly owned Unocal subsidiary, has a 10.3% interest in the ACG PSA and AIOC. Ownership in the AGC PSA and AIOC also includes SOCAR (10%) and eight other foreign oil companies: BP operates the well with 34.1%, INPEX 10%, Statoil 8.6%, ExxonMobil 8%, TPAO 6.8%, Devon 5.6%, Itochu 3.9%, and Amerada Hess 2.7%.

The development of the ACG field has been divided into four parts: Early Oil and Phases 1, 2, and 3. The Early Oil project is currently producing about 148,000 b/d (gross). Phase 1 is expected to come online in 2005; Phase 2 in 2006. Total production from the fields is expected to peak at more than 1.1 million b/d in 2009 after Phase 3 comes online.

9/20/04

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