The analysts point out that the consortium’s decision to extend its ACG PSA at this stage, 7 years prior to the planned 2024 expiration date, and despite plunging oil prices, reflects the consortium’s belief that there are still significant amounts of oil to be extracted and further capital investments to be unlocked.
Commenting on the new contract US Ambassador to Azerbaijan Robert Cekuta said that the US is pleased to continue cooperation with Azerbaijan within the extension of agreement on ACG development.
“The US has actively supported a production of oil and gas resources in Azerbaijan and other places of the Caspian basin. The main goal is a delivery of oil and gas to Europe and other markets. And this contributed to economic development and global energy security,” noted the ambassador.
Azerbaijan's importance is recognized by the US today, said Cekuta, adding that this reality was clearly reflected in the US president Donald Trump's letter on Azerbaijan's Independence Day on May 28, as well as the 24th Oil and Gas Exhibition and conference, US Secretary of State Rex Tillerson's letters to the Southern Gas Corridor and its Advisory Council held in February.
“US assisted Azerbaijan to transport its oil to world markets in the late 1990s provided political support to BTC, the US companies participated in here with their finances and technologies. The US has been and will be a long-term partner of Azerbaijan in oil and gas sector, non-oil sector and implementation of New Silk Road project," he added.
The signing ceremony of a new contract on development of the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields was held in Baku Sept. 14.
The Azerbaijan government and the State Oil Company of the Republic of Azerbaijan (SOCAR), together with BP, Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU and ONGC Videsh signed the amended and restated agreement on the joint development and production sharing (PSA) for the Azeri, Chirag fields and the Deep Water Portion of the Gunashli Field (ACG) in the Azerbaijani sector of the Caspian Sea until 2050.
The contract is now subject to ratification by the Azerbaijani parliament.
BP will remain the operator in accordance with the amended and restated ACG PSA.
As part of the contract, the international co-venturers will pay a bonus of $3.6 billion to the State Oil Fund of the Republic of Azerbaijan (SOFAZ) and SOCAR will increase its equity share in the ACG PSA from 11.65 percent to 25 percent. During the next 32 years, there is the potential for more than $40 billion to be invested in the ACG oil field.
Following the completion of the contract, the new ACG participating interests will be as follows: BP - 30.37 percent; AzACG (SOCAR) - 25.00 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; and ONGC Videsh Limited (OVL) - 2.31 percent.
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