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Absheron Production Sharing Agreement

27 November 2020 No Comment

Dudley said: “This agreement reinforces a new joint effort by SOCAR and BP to explore other Caspian opportunities to support long-term production in Azerbaijan. We have been active in the region for over 25 years and believe there is still significant potential in oil and gas. We look forward to continuing to build on our important business in Azerbaijan and working closely with SOCAR and others to explore and secure the future of Caspian Aspal for decades to come. Samira Bayramli, a recently promoted financial analyst in the Azerbaijani office of global oil and gas group BP, had a lot on her plate. It was November 2014 and bayramlis office window in Port Baku offered a picturesque view of the Caspian Sea. Earlier this week, Bayramli`s supervisory board had asked them to review a proposed structure for a new production-sharing agreement (PSA) for which BP was to conclude negotiations with the state oil company of the Republic of Azerbaijan (SOCAR) by the end of the year. This contractual agreement would establish the cost-benefit and profit-sharing system between BP and Azerbaijan for the exploration, development and production of flat-sea hydrocarbon deposits around the Absheron Peninsula (Figure 1). The structure of the contract was complex and Bayramli wanted to understand the risks and rewards of the project and how they were to be distributed between BP and the host country. Total has been present in Azerbaijan since 1996. In 2007, production averaged about 11,000 barrels of oil equivalent per day. The group`s activities mainly focus on the Shah Deniz field, in which it holds 10% of the shares. The field was commissioned in December 2006. In November 2007, positive results were obtained from an assessment of the well that could lead to the launch of a second phase of development in this area.

Total also holds a 10% interest in south Caucasus Pipeline Company (SCPC), which owns the pipeline that transports Shah Deniz Gas to Turkey and Georgia.In in addition, the group holds a 5% stake in the Baku-Tblisi-Ceyhan (BTC) pipeline from Baku to the Mediterranean. In 2007, the pipeline was used in particular for the export of Shah Deniz condensate. The new contract between Total and SOCAR was signed on February 27, 2009. [6] The agreement, which oversaw the drilling of three exploration drilling rigs over the next three years, was ratified by the Azerbaijani parliament in mid-May 2009. [7] Subsequently, GDF Suez acquired a 20% stake in Total. [3] The area under the agreement was 747 square kilometres. [4] BP and SOCAR today signed a new production sharing agreement (PSA) for the joint exploration and development of block D230 in the North Absheron Basin in the Azerbaijani sector of the Caspian Sea. At the signing ceremony, Abdullayev said: “We have a long tradition of fruitful collaboration with BP. I believe that the synergies between modern upstream technology and the unique historical experience, which are embodied in both companies, create a solid foundation for our continued success.

Given that today`s agreement is based on fair and fair conditions, it will be an important step in achieving maximum efficiency in the joint development of Azerbaijan`s hydrocarbon resources. June 5, 2008: Total today announces that it has signed an agreement with the Azerbaijani state SOCAR, which sets out the main conditions for a production-sharing agreement (EPI) for a licence in the territory of Absheron.

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Kathy Becker (381 Posts)

Kathy is the CEO/President of the Company of Experts, Inc. and oversees this Small Woman Owned Business serving schools, colleges and universities, businesses, corporations and non-profits moving them from deficit models of planning and thinking to engagement, empowerment and collaboration.

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