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    Lukoil expands in the Caspian


The Russian producer is doubling down in one of its core regions.

by: Joseph Murphy

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Natural Gas & LNG News, Asia/Oceania, Top Stories, Premium, Corporate, Mergers & Acquisitions, Exploration & Production, News By Country, Azerbaijan

Lukoil expands in the Caspian

Russia's Lukoil has reached a $2.25bn deal to buy a 15.5% stake in the BP-operated Shah Deniz gas field in the Caspian Sea off Azerbaijan from Malaysia's Petronas, the company said on October 7.

The deal, which will need approval from Azeri national oil company SOCAR, will increase Lukoil's overall equity position at the project to 25.5%. Operator BP has a 28.8% interest in the project, while Turkey's TPAO has 19%, SOCAR has 16.7% and Iran's NICO has 10%.

Shah Deniz delivers gas to Georgia, Turkey and southeast Europe via the Southern Gas Corridor. It produced 18.1bn m3 of gas and 3.6mn metric tons of gas condensate last year, and is on track to flow 26bn m3 of gas and 5mn mt of condensate annually at full capacity.

Lukoil is looking to expand its operations in the Caspian Sea, where it also operates producing fields off Russia and several exploration projects off Kazakhstan. It reached a deal last month to buy a 25% interest from BP in the UK major's Shallow Water Absheron Peninsula (SWAP) off Azerbaijan.