SOCAR, the state oil company of Azerbaijan, has signed an addendum to an existing PSA.
The addendum is for the Azeri-Chirag fields and the deep-water portion of the ACG in the Azerbaijan sector of the Caspian Sea.
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SOCAR’s partners in this venture include BP, Equinor, ExxonMobil, Inpex, Itochu, MOL, ONGC Videsh and TPAO.
The addendum modifies the ACG PSA to allow for the exploration, appraisal, development and production of the non-associated natural gas (NAG) reservoirs of the ACG field.
These reservoirs are believed to hold significant resources, with estimates of up to four trillion cubic feet (tcf) of gas in place.
The agreement extends until the end of the ACG PSA in 2049.
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By GlobalDataSubject to the successful exploration and appraisal of the NAG reservoirs, the development could see billions of dollars in capital investment over the next 25 years.
The shares of the ACG co-venturers in the NAG project mirror those of the existing ACG PSA: bp at 30.37%, SOCAR at 25%, MOL at 9.57%, INPEX at 9.31%, Equinor at 7.27%, ExxonMobil at 6.79%, TPAO at 5.73%, ITOCHU at 3.65%, and ONGC Videsh at 2.31%.
BP will continue as the operator of the ACG PSA.
NAG reservoirs consist of multiple geological formations located above and below the currently producing oil reservoirs, which were not initially part of the ACG PSA.
In 2022, the ACG co-venturers and SOCAR agreed to drill a data well to gather gas pressure data from these reservoirs.
Completed in 2023, the data well confirmed the presence of up to 4tcf of natural gas resources within the expected pressure range.
Following the addendum, SOCAR and the ACG co-venturers are planning the next steps for the NAG reservoirs’ development.
An initial well is being drilled from the existing West Chirag platform, targeting two priority reservoirs, with first gas production expected in 2025.
SOCAR will purchase all gas produced from the initial well.
SOCAR president Rovshan Najaf said: “The signing of this gas agreement represents not just a commercial triumph, but also a strategic milestone in our efforts to further diversify our energy resources.
“This project will bolster Azerbaijan’s role as a key supplier of energy to Europe, contributing to the energy security of our partners.”
Earlier this month, Eni and SOCAR signed three memorandums of understanding aimed at enhancing energy security, reducing greenhouse gas emissions and developing a biofuel production chain.
