New agreement envisages soaring SOCAR share in ACG project

September 14, 2017 13:37

Baku. 14 September. REPORT.AZ/ Today, amended and restated agreement was signed in Baku 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. The new agreement envisages changes in the companies' equity shares.

Report informs, following ratification of the contract, SOCAR share will grew to 25% from 11,65%, BP's share decrease to 30,37% from 35,8%. The new agreement also downgrades shares of other foreign companies.

After the agreement's ratification, the new ACG participating interests will be as follows: BP (UK, operator) - 30.37 per cent; AzACG (SOCAR, Azerbaijan) - 25.00 per cent; Chevron (USA) - 9.57 per cent; Inpex (Japan) - 9.31 per cent; Statoil (Norway) - 7.27 per cent; ExxonMobil (USA) - 6.79 per cent; TP (Türkiye Petrolleri) - 5.73 per cent; Itochu (Japan) - 3.65 per cent; and ONGC Videsh Limited (OVL, India) - 2.31 per cent.

According to the existing ACG PSA signed on September 20, 1994, participants in the ACG are the companies BP (35,8% as operator), SOCAR (11,6%), Chevron (11,3%), Inpex (11%), Statoil (8,6%), ExxonMobil (8%), TPAO (6,8%), Itochu (4,3%), ONGC Videsh Ltd. (OVL, 2.7%).

Thus, SOCAR share will increase by 13,35 percentage point, BP's will decrease by 5,4 pp.

Notably, the contract was signed in Baku today in the presence of President of the Republic of Azerbaijan Ilham Aliyev and a group of visiting senior government and state officials, by Rovnag Abdullayev, President of SOCAR, on behalf of the Azerbaijan Government, and by the representatives of the co-venturer companies.

BP will remain the project's operator in accordance with the amended and restated ACG PSA.

As part of the contract, the international co-venturers will pay a bonus of $3.6bn to the State Oil Fund of the Republic of Azerbaijan. During the next 32 years, there is the potential for more than $40bn capital to be invested in the ACG oil field.