Shah Deniz expenditures decrease

In 2019, Shah Deniz spent about $544 million in operating expenditure and $1.1 billion in capital expenditure, the majority of which was associated with the Shah Deniz 2 project. This is a decrease of 5.9% and 23.6% from 2018 respectively, BP-Azerbaijan told Report.

In 2019, the field produced around 16.8 billion standard cubic meters (bcm) of gas and 3.5 million tonnes (28.6 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms, respectively, up 46% and 40% from the previous year.

Production from Shah Deniz Bravo has been ramping up since the first gas delivery at the end of July 2018.

The existing Shah Deniz facilities’ production capacity is currently over 56 million standard cubic meters of gas per day or more than 20 bcma.

In 2019, Shah Deniz 2 project achieved final acceptance of offshore and onshore facilities. The project team continued to support operations through the first year of production to ensure high operating efficiencies of the Shah Deniz 2 assets.

During the year, the project continued to perform subsea construction activities, including the installation of infrastructure to the deep-water flanks to support the next East South flank start-up in 2021. Delivery of subsea assets and installation activities using the subsea construction vessel Khankendi and the pipelay barge Israfil Huseynov will continue over the coming years to deliver plateau gas production.

In 2019, the Shah Deniz Alpha platform rig was on the warm stack and conducted rig maintenance and TAR in between.

The Istiglal rig delivered one subsea well completion on the East South flank, two completions on the West South flank, and two completions on the East North flank. The rig then drilled top holes of two East North flank wells. The Maersk Explorer rig drilled SDH01 well to its final depth, one top hole on the North flank, and two top holes on the West South flank. The rig then drilled SDF03 well on the West South flank to its final depth and commenced drilling the lower section of SDF04 well.

The above two rigs have already drilled 17 wells in total, and completed 16 out of those, for Shah Deniz 2 production and subsequent ramp-up (four wells on the North Flank, four wells on the West Flank, four wells on the East South Flank, two wells on the West South Flank and two wells on the East North flank, one well on the West South flank was drilled to its final depth and suspended). Drilling operations will continue to deliver all wells required to ramp up to the plateau level.

Shah Deniz participating interests are: BP (operator – 28.8%), TPAO (19.0%), AzSD (10.0%), SGC Upstream (6.7%), PETRONAS (15.5%), LUKOIL (10.0%) and NICO (10.0%).