On September 20, 1994 Azerbaijan signed its first production sharing agreement (PSA) for development of offshore fields Azeri and Chirag and a deep-water section of Guneshli field (ACG) with the foreign partners.
What did ACG bring to Azerbaijan? Azerbaijan has started receiving profit since 2000 (Azerbaijan received the first profitable batch of oil in December 1999). One can say that during the first decade of its independence the country has not received oil profit. The county still lived at the expense of the oil dollars, which were transferred by the State Oil Company of Azerbaijan (SOCAR) to the budget. Oil constituted the basis of our economy not only during the Soviet period, but also during the past century and a half. Azerbaijan first started spending oil incomes only in 2001 and it totaled 720,000 AZN (less than 1% of total income).
10 year ago. In September 2004 when Azerbaijan celebrated the 10th jubilee of the Contract of Century it was announced that nine companies from five countries (11 companies from 7 countries during signing) are involved in the ACG development.
$7 billion has been invested into the project that time, of which $1.7 billion was invested into the “early oil extraction” (development of Chirag field). The remaining part of the investments was spent for a wide-scale development of ACG, which envisaged development of deeper fields Azeri and Guneshli.
It was said at the jubilee ceremony that time that from November 1997 till September 1, 2014 over 35 million tons of oil and 6 billion cub.m. of associated gas was extracted on the Chirag field.
20 years later. At present Azerbaijan’s partners in ACG project are 8 companies from 6 countries: BP (UK, operator) – 35.78%, Chevron (US) – 11.27%, Inpex (Japan)- 10.96%, SOCAR (Azerbaijan) – 11.65%, Statoil (Norway) – 8.56%, Exxon Mobil (USA) – 8%, ТРАО (Turkey) – 6.75%, Itochu (Japan) – 4.3% and ONGC (India) – 2.2%.
From November 7, 1996 till September 1, 2014 345 million tons of oil and almost 100 billion cub.m. of associated gas was extracted from the offshore fields Azeri-Chirag-Guneshli. The volume of Azerbaijan’s profitable oil totaled 185 million tons. 32.2 billion cub.m. of associated gas was handed over to the Azerbaijani side.
During the second decade of the project (September 2004 through September 2014) 310 million tons of oil and 94 billion cub.m. of associated has was extracted on ACG. Growth of hydrocarbon production started after a wide-scale development of ACG beginning 2005.
Incomes of the government. By September 1, 2014 105,802,000,000 AZN has been transferred to the State Oil Fund of Azerbaijan (SOFAZ) from the ACG.
$10,770,000,000 has been transferred to SOFAZ from ACG from January 1 to September 1, 2014.
By July 1, 2014, SOFAZ’s assets totaled $37,622,400,000.
Forecasts: According to the Oil Studies Centre Caspian Barrel, in the coming ten years Azerbaijan’s incomes from ACG could total no less than $100 billion with the average export oil price of $80.00 per barrel and over $120 billion with the price of $100 per barrel. When the contract expires on December 12, 2024, the companies could sign a new contract for development of deeper laying beds of the field.
Bakudaily.az
