CASPIAN OIL & GAS - Azerbaijan’s Contract of Century proves its viability

Azerbaijan’s Contract of Century proves its viability



By Sara Israfilbayova – Trend:

September 20 will mark the 25th anniversary of the signing of the Contract of the Century, which later, in 2017, was extended to the middle of the century.

The contract has not only proved its viability, but also brought dividends to both the participating companies and Azerbaijan, BP told Trend.

To date, total production from the three main oil fields in the Azerbaijani sector of the Caspian Sea - Azeri, Chirag and the deep-water part of the Gunashli field (ACG) - has reached over 3.6 billion barrels. Almost the same amount of oil has yet to be extracted from ACG.

After Azerbaijan gained independence in 1991, its oil industry was open to foreign investors, and 1994 became a historic year.

A production sharing agreement (PSA) was signed between the Azerbaijani State Oil Company SOCAR and a consortium of 11 foreign oil companies from six countries for a period of 30 years.

Following ratification of the PSA, the Azerbaijan International Operating Company (AIOC) was formed to implement the agreement on behalf of the foreign shareholders working in partnership with SOCAR and the government of Azerbaijan.

Initially, the company included 11 major foreign oil companies (BP, Amoco, Unocal, LUKoil, Statoil, Exxon, TPAO, Pennzoil, McDermott, Ramco, Delta Nimir), representing six countries - the UK, the US, Russia, Norway, Turkey and Saudi Arabia

The current participating interests of ACG are as follows: BP (30.37 percent), SOCAR (25.0 percent), Chevron (9.57 percent), INPEX (9.31 percent), Equinor (7.27 percent), ExxonMobil (6.79 percent), TPAO (5.73 percent), ITOCHU (3.65 percent), ONGC Videsh Limited (OVL) (2.31 percent).