More projects, wells expected in the Caspian Sea in 2019

BP and its partners look set to approve the new Azeri Central East platform next year for the Azeri-Chirag-Guneshli oil field in the Caspian Sea, according to Wood Mackenzie.

Offshore staff

LONDON – BP and its partners look set to approve the new Azeri Central East (ACE) platform next year for the Azeri-Chirag-Guneshli (ACG) oil field in the Caspian Sea, according to Wood Mackenzie.

The project has been in front-end engineering and design since 2017. Assuming a positive final investment decision (FID), the analyst anticipates first oil in 2023, with 100,000 b/d of incremental output at peak, accounting for 15% of Azerbaijan’s liquids production in the mid-2020s.

More mergers and acquisitions are likely in the Caspian next year, the analyst added, with Chevron having confirmed that its Azerbaijani portfolio – 9.57% of the ACG field and 8.9% of the associated Baku-Tbilisi-Ceyhan (BTC) oil pipeline – are both up for sale.

Another seller could be ExxonMobil, which has 6.79% in ACG and 2.50% in the BTC, the latter only acquired in 2017.

Azerbaijan’s previous major transaction was Equinor’s divestment of a 15.5% stake in the Shah Deniz field in 2015 to Petronas for $2.25 billion.

As for the country’s offshore gas resources, with the government keen to avoid a shortfall of supply in the 2020s, there could be expansion at the 2-tcf Umid field (Socar held talks earlier this year with Total on a farm-in).

There is also 4 tcf of uncontracted non-associated gas (NAG) at ACG field, Wood Mackenzie said, and an initial agreement looks likely on commercial terms in 2019, clearing the path for signature of a risk service agreement or PSC.

Historic drilling successes on the Severni block, in the Russian sector of the Caspian Sea have encouraged Lukoil-Nizhnevolzhskneft to conduct further exploration and appraisal work in the region.

In the Kazakh sector, the company is working with NC KazMunaiGas on exploration of the Zhenis block, and has further plans to drill the Hazri-3 well, in the Central Caspian block.

The analyst also expects Novatek to build on this year’s largeNorth Obskoye discovery in Ob Bay off northern Russia, while Gazpromneft is set to drill another exploration well on the Ayashski block offshore Sakhalin Island.

12/27/2018

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