BP to Explore For Azeri Gas Onshore

BP said September 14 it acquired 61% share in Azerbaijan’s onshore Gobustan oil field, based on a production sharing agreement (PSA). But a government source has told NGW that BP will also study the deeper layers of the field and will drill a well at its own expense in order to explore for gas.

It is BP’s first onshore Azeri project and the exploratory well, targeted at gas, will be drilled in 2H2019, the source told NGW. BP and Azerbaijan would sign a new contract to develop the gas, if any is found. 

The Gobustan oil development was first signed in 1988 and would have expired November 2023, had it not been for the recently signed PSA.

Finding gas in the deeper layers of Gobustan is highly possible, the source added, but not in such quantities as the large offshore Caspian fields. Gobustan’s other shareholders are state-owned Socar (20%) and operator Vitol (19%) through its wholly-owned subsidiary Commonwealth Gobustan.

BP is also preparing to drill a gas exploration well in one of the deepest structures of the Caspian: Shafag-Asiman. The UK major also has two production sharing contracts - one off the Absheron coast to explore for oil, the other in the northern part of the Caspian Sea (D230) where it’s less clear whether the target will be gas or oil. 

BP’s operated offshore fields in Azerbaijan        

Source: BP, Socar. * In 2022, Azerbaijan’s overall oil and gas condensate production would decline 4mn mt/yr to about 34mn mt/yr. The country’s overall sales gas output is expected to increase by 20bn m3 to 38bn m3/yr when SD2 reach its final production capacity.