25 More Years in the ACG Field
The Central Azeri Platform. (Photo: Stuart Conway / BP)
Statoil, together with co-venturers and the Azerbaijan Government sign amended and restated Azeri-Chirag-Deepwater Gunashli PSA.
The Azerbaijan Government and the State Oil Company of the Republic of Azerbaijan (SOCAR) together with BP, Statoil (STO), Chevron (CVX), INPEX, ExxonMobil, TPAO, ITOCHU (ITOCY) and ONGC Videsh today sign the amended and restated Azeri-Chirag-Deepwater Gunashli (ACG) Production Sharing Agreement (PSA) which will be effective until the end of 2049.
The agreement was signed today in Baku and is now subject to ratification by the Parliament (Milli Majlis) of the Republic of Azerbaijan.
BP is the current operator of the field and will remain the operator under the extended ACG PSA. Statoil originally entered the PSA in 1994 with an 8.56% share.
As part of the new agreement, SOCAR will increase its equity share from 11.65% to 25% and the participating interest of all partners will be revised. Statoil's share will be adjusted to 7.27%.
All international partners will make a total payment of USD 3.6 billion to the State Oil Fund of the Republic of Azerbaijan which collects income on behalf of the Azerbaijan government. This amount will be divided according to the partners' participating interest and Statoil's share will be approximately USD 349 million. The extension represents a major milestone for Statoil and all the participating companies which will continue generating value from the asset for many decades to come. Subsequent to this agreement, SOCAR and its co-venturers have also agreed to progress engineering development work to evaluate an additional production platform in the ACG contract area.
Lars Christian Bacher, Statoil's Executive Vice President for Development and Production International, welcomes the result and states that the extension represents a major step for Statoil. "This year we celebrate 25 years of Statoil presence in Azerbaijan and we cannot find a better way to celebrate this milestone than by extending our participation in the ACG field for a further 25 years. The ACG field represents a world-class development and will be a key asset in our international portfolio for many years to come."
Since 1994, when the PSA was first signed, the ACG field has received USD 33 billion of investment and produced 3.2 billion barrels of oil production. In the first half of 2017, total production from ACG averaged 585,000 barrels per day.
