Page 11 - FSUOGM Week 13 2021

FSUOGM COMMENTARY FSUOGM

BP, SOCAR hit gas-condensate

in Azeri Caspian Sea

The discovery comes at an opportune moment for Azerbaijan,
ahead of market tests for an expansion of the Trans-Adriatic

Pipeline that will carry more of its gas to Europe

AZERBAIJAN BP and Azerbaijan’s state-owned SOCAR have be sourced from Turkmenistan and Israel in
made an ultra-deep gas and condensate discov- the future. There are plans under discussion to
WHAT: ery in the Caspian Sea after 14 months of drilling. build a small pipeline linking Petronas-operated
SOCAR has reported The well at the Shafag-Asiman block was fields off Turkmenistan with Azeri projects. But
a gas-condensate sunk to a depth of almost 7,200 metres. It is one a dispute over the Caspian Sea’s legal status, and
discovery at the Shafag- of the few boreholes to be completed in recent opposition from Iran and Russia, pose signifi-
Asiman block in the years in the Azeri Caspian Sea, where explora- cant obstacles.
Caspian Sea. tion activity has been muted because of low oil BP signed a production-sharing agreement
prices and rig scarcity. (PSA) with SOCAR for the 1,100-square km
WHY: SOCAR revealed the discovery in a statement Shafag-Asiman area in 2010. The block is in
SOCAR and its partner on March 25, without providing figures for its water depths of between 650 and 800 metres.
BP have been drilling at size. However, Azeri President Ilham Aliyev The pair shot a 3D seismic survey in 2012
the site for the past 14 hailed the find as a potential boost for Southern and finished interpreting the data three years
months. Gas Corridor (SGC) supplies to Europe. later. But they repeatedly put off drilling plans
Working with BP for 30 years, “many pro- because of delays obtaining a rig and low oil
WHAT NEXT: jects of global importance have been carried out. prices.
BP's new strategy is Today, we are working on several new projects The partners finally spudded the SAX01 well
unlikely to have much together .... One of these projects is the devel- in January last year and the well was originally
impact on its exploration opment of the Shafag-Asiman prospect, where expected to take only nine months to com-
plans in Azerbaijan. the drilling of the first well has already been plete. The Heydar Aliyev semi-submersible rig,
completed with good results,” Aliyev said. The launched in Baku in 2017, was used for the work.
reserves that have been discovered will boost BP has other exploration projects underway
energy security in Azerbaijan and overseas, he in Azerbaijan, although it put some of its plans
said. on hold because of the pandemic. However, it
BP is Azerbaijan’s biggest foreign investor, did complete a 3D seismic survey at the D230
operating the country’s flagship Azeri-Chi- block in March 2020. The company said in Feb-
rag-Gunashli and Shah Deniz fields in the Cas- ruary this year that interpretation of the data was
pian Sea that account for the bulk of national ongoing.
oil and gas output. Shah Deniz began flowing BP is also preparing to drill up to three wells
gas to Southeast Europe at the start of this year, at the Shallow Water Absheron Peninsula area. It
following the completion of the Trans-Adriatic is awaiting the upgrade of a rig for the first well,
Pipeline (TAP) running through Greece, Alba- which it expects to start drilling in the second
nia and under the Adriatic Sea to Italy. quarter of 2021, the company said in February.
The discovery comes at an opportune BP unveiled an ambitious new strategy last
moment for Azerbaijan. BP, SOCAR and other year that will involve scaling back its oil and gas
TAP shareholders will invite gas customers this production by 40% over the next decade, while
July to submit binding bids for the pipeline’s also investing heavily in renewables. As part of its
expansion. TAP can currently transport up to clean energy pivot, the UK major vowed not to
10bn cubic metres per year of gas, but its devel- explore for hydrocarbons in countries where it is
opers want to double its capacity to 20 bcm. not already active and has reportedly downsized
The project would also involve an expansion its exploration team significantly.
of the Trans-Anatolian Pipeline (TANAP) that Given that BP is already well-established in
delivers gas across Turkey and connects with Azerbaijan, its strategic shift is unlikely to have
TAP near the Greek border. much bearing on exploration plans in the coun-
SOCAR’s vice-president for investment try. The company has opted out of Caspian drill-
and marketing, Elshad Nassirov, suggested on ing in neighbouring Kazakhstan, however, in
February 16 that gas for the expansion could light of its new strategy. ™

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