BP renews Azerbaijan PSC

Azerbaijan

BAKU, September 15, 2017 – BP and SOCAR renewed the PSC for the Azeri-Chirag-Guneshli (ACG) offshore fields Thursday.

The deal will now run through 2050, rather than 2024, but BP’s stake will drop to 30.37% from 35.8%. The super-major will remain the operator and has said the deal will be profitable even after the USD 3.6-billion signing bonus it is paying the government.

“It is very good, solid economics for everyone involved,” BP CEO Bob Dudley was quoted by Reuters as saying. “Breakeven is below the current price of oil […] It is competitive in our portfolio, most certainly.”

Production from the ACG fields averaged 620,000 boepd in 2016. On August 15, 2016, BP produced its 3 billionth barrel of oil from ACG. The company has led Azerbaijan’s upstream development for more than two decades through its local subsidiary, BP Exploration Caspian Sea. The company was one of the original signatories of the 1994 “Contract of the Century.”

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