• Natural Gas News

    BP To Target Deep Shah Deniz Gas


BP believes the deep gas target has multi-trillion ft³ potential.

by: Joseph Murphy

Posted in:

Natural Gas & LNG News, Europe, Premium, Corporate, Exploration & Production, News By Country, Azerbaijan

BP To Target Deep Shah Deniz Gas

BP aims to target deeper gas layers under the Shah Deniz field off Azerbaijan next year, CEO Bob Dudley said in a July 31 earnings call.

“We’ve got an advantaged gas project beneath the existing Shah Deniz development,” Dudley told investors, outlining the group’s second-quarter results. “We think it has multi-tcf [trillion ft³] potential and that’s currently planned to spud maybe in 2020.”

The BP-operated Shah Deniz project started flowing gas in 2006, with output subsequently reaching a first-stage plateau of 10bn m3/year. Its second stage was brought on stream in mid-2018, and is slated to add an extra 16bn m3 of production at full capacity.

BP and its partners are yet to shore up plans for a third phase of development. A 3D survey was completed in 2016 to evaluate its potential, but the project was subsequently put on hold, while BP focused on implementing Shah Deniz's second stage.

The UK major’s co-investors at Shah Deniz include Azerbaijan’s Socar, Turkish Petroleum, Malaysia’s Petronas, Russia’s Lukoil and Iran’s Nico.

According to Dudley, BP is also planning to spud its first well this year at the offshore Shafag-Asiman contract area in Azerbaijan, once a rig becomes available. “We need to have the rig, which is being used by another company first,” he explained.

BP signed a production-sharing agreement (PSA) for Shafag-Asiman in 2010, and drilling was initially expected to start earlier. Rig shortages, as well as the site’s geological complexities, are believed to have caused delays.

Dudley added that the work on the first of three wells at the nearby shallow-water Absheron Peninsula (SWAP) would begin in the first half of 2020 – a year later than previously anticipated. BP’s other greenfield projects in Azerbaijan include the offshore D230 block and the onshore Gobustan field. “So people say Azerbaijan is a late life province – we think there’s a lot of potential still there,” Dudley said.