An updated contract for the development of the Azeri-Chirag-Gunashli (ACG) block of Azerbaijan's oil and gas field, the largest in the Azerbaijan sector of the Caspian basin, was signed Thursday between Azerbaijan's state oil company SOCAR and its majors co-venturers.
With the newly signed agreement between BP, Chevron, Inpex, Statoil, ExxonMobil, TPAO, Itochu, and ONGC Videsh and Socar, the duration of operational activities for the ACG field located about 100 kilometers east of Baku will be extended from 2024 to 2050.
The signing ceremony in Azerbaijan saw the participation of the President of Azerbaijan, Ilham Aliyev, the Georgian Energy Minister Ilia Eloshvili, U.K. Minister of State at the Foreign and Commonwealth Office Alan Duncan and Turkish Energy and Natural Sources Minister Berat Albayrak.
Aliyev told participants at the signing ceremony that "today is a historical day for Azerbaijan" amid the esteemed guests demonstrating the significance of the event.
"The new era begins for the oil field with much better conditions for Azerbaijan. After the agreement, Azerbaijan will receive a $3.6 billion bonus," he said. He explained that the share of Az ACG SOCAR's interest as contractor in the project will increase to 25 percent from 11.6 percent, and overall Azerbaijan's share in the contract would increase to 75 percent.
"The agreement was fulfilled with great success over 23 years, and 436 million tons of oil was produced from Azeri, Chirag and the Gunashli fields during these years. It is believed that there is more than 500 million tons of oil reserves in the region," he explained.
The new percentage share interest in the project is now as follows: BP (30.37 percent), Az ACG SOCAR (25 percent), Chevron (9.57 percent), Inpex (9.31 percent), Statoil (7.27 percent), ExxonMobil (6.79 percent), TPAO (5.73 percent), Itochu (3.65 percent), ONGC Videsh Limited (OVL) (2.31 percent).
The Baku–Tbilisi–Ceyhan pipeline (BTC) is a 1,768 kilometers long crude oil pipeline running from the Azeri–Chirag–Gunashli oil field in the Caspian Sea to the Mediterranean Sea.
During the ceremony, the Turkish Energy and Natural Sources Minister Berat Albayrak, relayed Turkish President Recep Tayyip Erdogan's message which emphasized that the BTC pipeline provides a safe environment for Azerbaijan to carry oil to the global market while hailing the new agreement as a fine example of regional and international cooperation.
Reporting By Ruslan Rehimov
Writing By Gulsen Cagatay
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