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    Azeri Shah Deniz Output Climbs Further in 2020


The field is currently producing at a rate of more than 56mn m3/day, which would amount to 20bn m3 in a year.

by: Joe Murphy

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Azeri Shah Deniz Output Climbs Further in 2020

Azerbaijan's offshore Shah Deniz gas field produced 18.1bn m3 of gas and 29mn barrels of condensate in 2020, up from 16.8bn m3 and 28.6mn barrels in the previous year, operator BP reported on February 4.

Shah Deniz began pumping gas to south Europe in January, following the completion of the Trans-Adriatic Pipeline (TAP), the final section of the Southern Gas Corridor. BP has a 28.8% stake in the project, while the remaining equity is divided between Turkish Petroleum, Azerbaijan's Socar, Malaysia's Petronas, Russia's Lukoil and the National Iranian Oil Co.

The Shah Deniz partners spent more than $1bn in operational and $942mn in capital expenditure in 2020. The field is currently producing at a rate of over 56mn m3/day, which would amount to 20bn m³/year. 

BP's other flagship project in Azerbaijan is the offshore Azeri-Chirag-Gunashli (ACG) oilfield, which delivered 477,000 barrels/d of oil in 2020, down from 535,000 b/d in 2019. The project was forced to cut supply under Azerbaijan's Opec+ commitment. BP is preparing to launch a 100,000 b/d seventh platform at ACG in 2023, to help slow the pace of long-term output decline.

ACG also flowed some 2.2bn m3 of associated gas last year, all of which was supplied to Socar.

Like other oil companies, BP significantly cut back on exploration spending in 2020 in response to the market collapse. The company is also looking to transition away from oil and gas in the coming years, having pledged not to explore for hydrocarbons in countries where it is not already active. The UK major has downsized its exploration team of geologists, engineers and scientists to under 100 from a peak of over 700 a few years ago, sources told Reuters in late January.

In Azerbaijan, BP spudded its first exploration well at the Shafag-Asiman offshore block in January.The well has now reached a 5,305-m depth, the company said, and drilling continues. A 3D seismic survey was also completed at the D230 block last March, and interpretation is ongoing.

BP is drawing up plans for three wells at the Shallow Water Absheron Peninsula area. It is awaiting the upgrade of a rig for the first well, which it expects to start drilling in the second quarter of 2021.