BP-led group to invest $2 billion in Azeri ACG project

A consortium led by British oil major BP plans to invest about $2 billion in its Azeri-Chirag-Guneshli (ACG) project in Azerbaijan this year where it expects a slight fall in output due to planned maintenance, the company's regional head said.

ACG, which has platforms in the Caspian Sea, is Azerbaijan's biggest field and one of BP's largest. Declining output has raised concerns in the former Soviet state about future revenue, but BP and its partner, state energy firm SOCAR, have said production has stabilised.

Overall oil output in Azerbaijan grew last year for the first time since 2011.

"We'll spend approximately $2 billion at the ACG in 2014, which is slightly less than last year," Gordon Birrell, BP's president for the Azerbaijan-Georgia-Turkey region, said in an interview with Reuters.

In 2013, the BP-led consortium spent $2.8 billion in capital expenditure on ACG, the bulk of it on finishing construction of the West Chirag platform.

Birrell said this year's money would be spent on drilling 19 wells in the ACG.

BP announced the start of oil production from the West Chirag platform last month and said the platform would produce an average of 60,000 barrels per day (bpd) this year.

Birrell said output would fall slightly at the ACG oilfields this year because of planned maintenance work at the Central Azeri and West Azeri platforms, halting operations for a couple of weeks. He did not say when the work would start.

"Because we are shutting down this year, I expect it (output) to be slightly less in 2014," Birrell said.

"It's included in the plan that is shared with SOCAR and the government. This is no surprise."

Output at the ACG last year fell 2.2 percent to 32.2 million tonnes (650,000 bpd) from 32.9 million.

"It will never be a perfectly smooth production curve, because we bring new wells on regularly," Birrell said.

Along with BP and SOCAR, the consortium operating the ACG includes Chevron, INPEX, Statoil, ExxonMobilç TPAO, ITOCHU and ONGC Videsh Limited. 

ANN.Az