Shah Deniz Opex Rises, Production Up: BP
The BP-led consortum operating the Shah Deniz field in the Azeri section of the Caspian Sea spent 22.2% less on capital expenditure in the first half of the year, as Shah Deniz 2 and the South Caucasus pipeline expansion (SCPX) neared completion. But it still spent $1.25bn; and its operational expenditure went up by 28.7% to $723mn.
The state-owned Southern Gas Corridor Company (SGCC) told NGW that as of June 30, about 92.9% of SD2, 100% of SCPX, 99.8% of Trans Anatolian pipeline (Tanap) and 88.5% of the TransAdriatic pipeline (TAP) were completed. The complex projects aim to deliver 6bn m3/yr to Turkey and 10bn m3/yr to EU by 2020.
Shah Deniz stage 1&2 produced 8.4bn m3 in 1H 2019, about 58% more than the same period in last year, because the second phase (SD2) became operational in mid-2018.
Azeri-Chirag-Guneshli (ACG) also delivered 0.9bn m3 sale gas to state-run Socar in 1H 2019, about 18.2% less than in the same period of last year owing to more reinjections in fields to maintain barrrels.
Expenditures in 1H 19 ($mn)
(BTC = Baku-Tbilisi-Ceyhan oil line)
Source: BP
As SD2 is being complete, the BP-led consortum is preparing to study and develop the field’s third phase, estimated to contain 600bn m3 gas, or equal to SD1&2 combined.
Southern Gas Corridor (SGC) is expected to reach its final 31bn m3/yr capacity in mid-2020s and a part of needed extra gas would come from SD3.
SGCC told NGW that it has spent $9.8bn of the total $10.1bn investment that is its share in the giant project as of June 30. Its total, its spending stood at $300mn in first half of 2019, some $100mn would be spent in 2H2019 and the remained $200 needed funding would be done in 2020.
The BP-led consortium has also signed a $40bn contract to develop ACG to maintain barrels and increase recovery rate. In April 2019, the ACG partnership took a decision to commence the first stage of development of the ACG field with a $6bn project which includes a new offshore platform and facilities designed to process up to 100,000 b/d. The project is expected to achieve first production in 2023 and produce incremental up to 300mn barrels of oil over its lifetime.
The project has already started construction activities (started in July) and will continue to ramp up these activities through the second half of the year.
BP itself (based on bilateral contracts with Socar) also would stat works on the first of three wells at the nearby shallow-water Absheron Peninsula (SWAP) 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.