A new agreement between global energy company BP and the State Oil Company of the Azerbaijani Republic (SOCAR) was signed last week in Baku for the exploration and development of yet another offshore gas field in the Azerbaijani sector of the Caspian Sea.
It is estimated that the Shafag-Asiman field contains between 300 billion and 500 billion cubic meters (bcm) of natural gas plus gas condensate that may also be recovered. A production-sharing agreement (PSA) between the two partners sets up a joint venture on a parity basis with a time horizon of 30 years.
The deal further boosts Azerbaijan’s already considerable gas production prospects, which include the 16 bcm/y planned for Shah Deniz’s Phase Two development, the gas in the deepwater Azeri-Chirag-Guneshli (ACG) development now being exploited for oil that flows through the Baku-Tbilisi-Ceyhan (BTC) export pipeline, and several other offshore gas fields. BP holds a 25.5% share in the consortium developing Shah Deniz Two, and the company in August increased its share in ACG to 39.8% from 34.1% with its purchase of the stake owned by Devon Energy.