A large new platform for the giant Azeri-Chirag-Gunashli oilfields complex offshore Azerbaijan promises excellent pickings for the local and international supply chains.
The ACG partnership has signed a $6billion investment agreement to develop the Chirag asset, at the heart of which will be a further platform – the sixth so far.
If past practice is anything to go by, the Azfen yard (a JV between Amec and Turkish group Tekfen) will secure a substantial proportion of the fabrication work.
ACG is currently exploited via a family of five large offshore production platforms exporting their output to the Sangachal terminal located south of the Azeri capital, Baku.
The SOCAR-developed Shallow Water Gunashli (SWG), on the north-western tip of the field, is also tied into ACG infrastructure.
Despite extensive development and output exceeding 1million barrels of oil equivalents, growth opportunities still abound on ACG, according to consortium member Statoil.
This latest phase is expected to deliver another 360million barrels.
The Chirag Oil Project is expected onstream in 2013 and will see the drilling of new wells primarily targeting the currently producing Fasila reservoirs, and Balakhany reservoir units, which are not yet exploited. It will also optimise the main Pereriv reservoir.
The platform will be located in the Chirag-Deep Water Gunashli (DWG) area of the ACG complex in some 170m (558ft) of water.
The facility will comprise a single production, drilling and living quarters (PDQ) platform with capacity to produce 185,000 barrels of oil per day (gross).
The new platform will be partially integrated with the existing DWG facility via marine pipelines that import reservoir injection water and export produced water for disposal. Hydrocarbon transportation will be via the existing system to Sangachal Terminal.
According to Statoil, there will be a high degree of standardisation in terms of design and construction. This reduces engineering costs and enables platform operators to circulate easily between the field’s various installations.
Tracking back, the ACG production-sharing agreement was signed in 1994 and covers the development of the Azeri-Chirag-Gunashli contract area. The reservoir complex has been developed in several phases and currently produces some 850,000 barrels oil equivalent per day. The Chirag Oil Project will boost AGC’s total output to about 1million barrels per day.
Overall, potential recovery from ACG is estimated at some 5billion barrels of oil. About 1.4billion have been produced to date.
Meanwhile, stakeholder and lead player BP has confirmed that the purchase of Devon’s stake in the ACG project, worth an estimated $3billion, is subject to pre-emption rights by the other shareholders, which include some of BP’s biggest rivals – ExxonMobil, Chevron, Statoil and Hess.
This adjustment follows BP’s agreed $7billion purchase of a package of assets from US independent Devon.
ExxonMobil has indicated that it would consider exercising the pre-emption rights. The company said that it “routinely evaluates potential opportunities around the world”, but declined to comment further. Chevron’s intentions are not yet known.
BP is already the biggest shareholder in the field with 34%, but it is looking to increase that to nearly 40%.
Apparently, ACG partners can choose to exercise their pre-emption rights in the field and sell the stake on to a third party. Two Chinese companies, Sinopec and CNOOC, have both already expressed interest.
Meanwhile, Statoil holds an 8.6% share in ACG. Operator BP has a 34.1% stake, followed by Chevron at 10.2%, Azeri state-owned SOCAR with 10%, INPEX with 10%, ExxonMobil at 8%, TPAO at 6.8%, Devon with 5.6%, Itochu at 3.6% and Hess with 2.7%.