BP Azerbaijan reported in its latest quarterly business update that capital expenditure for development activities in the offshore Azeri-Chirag-Guneshli (ACG) oilfields for 2005 were expected to amount to $2.624bn, compared to the projected $2.311bn. BP Azerbaijan Associate President David Woodward on 27 July said the increase in capital expense was due mainly to the decision to drill two additional wells as part of the East Azeri oilfield pre-drilling program and the accelerated start of the Deep Water Guneshli (Phase 3) pre-drilling program.
Mr Woodward said combined production from the Chirag and Central Azeri platforms during the first half of 2005 had averaged 200,000 b/d. The production target for 2005 was 227,000 b/d, and Mr Woodward said BP expected to exceed that and bring output to 240,000 b/d for the year. The Chirag platform is producing 134,000 b/d, while five of the 10 pre-drilled wells at the Central Azeri platform are producing 150,000 b/d. The oilfield came on-stream in February 2005 (MEES, 21 February). Production from the platform would increase, Mr Woodward said, as the remaining five pre-drilled wells were brought on-stream.
Meanwhile, work to expand the onshore Sangachal Terminal Expansion Program (STEP) continues. Processed crude is exported from Sangachal via the Baku-Supsa crude pipeline and by rail to Batumi. In May the Sangachal terminal began to ship associated gas produced at the Central Azeri oilfield to Azerbaijan’s national gas grid operated by Azerigas. Shipments are made via a 5.35km pipeline from the terminal to the grid. The pipeline has a capacity of 19.8mn cu ms/day (700mn cfd). Deliveries to Azerigas for 2005 are expected to total 300mn cu ft.
Concerning the Baku-Tbilisi-Ceyhan (BTC) crude pipeline, Mr Woodward said capital expenditure during the first half of the year was $530mn, adding that by the end of 2005, this would reach $1.388bn, compared to planned expenses of $1.214bn. He said expenses included the cost of line-fill and financing. The higher project costs were due to contractors and project management, the extra scope of work for a pipeline tie-in to the Azpetrol rail terminal and additional costs due to oilfield price inflation. He reaffirmed that exports from the BTC would begin from Ceyhan by the end of the year (MEES, 9 May, 16 May).
