BP, SOCAR Sign PSA for Exploration, Development Offshore Azerbaijan

BP plc and SOCAR have signed a new production sharing agreement (PSA) for the joint exploration and development of Block D230 in the Azerbaijan sector of the Caspian Sea.

The PSA was signed in London, in the presence of UK Prime Minister Theresa May and Azerbaijan President Ilham Aliyev, by Rovnag Abdullayev, president of SOCAR, and BP group chief executive Bob Dudley.

Under the PSA, which is for 25 years, BP will be the operator during the exploration phase holding a 50 percent interest, while SOCAR will hold the remaining 50 percent interest. The signing of the PSA follows a memorandum of understanding for exploration of Block D230, which was agreed in May 2016.

"This agreement underpins a new joint effort by SOCAR and BP to explore further Caspian opportunities in support of long-term production in Azerbaijan,” Dudley said in a company statement.

“We have now been operating in the region for more than 25 years and believe there is still significant oil and gas potential there. We look forward to continuing to build on our significant business in Azerbaijan, working closely with SOCAR and others to explore and help secure the Caspian’s future for decades to come,” he added.

Speaking at the signing event, Abdullayev said the agreement would become an important milestone in the pursuit of “the highest degree of efficiency in the joint development of the natural resources of Azerbaijan”.

“We have a long tradition of successful cooperation with BP. I believe that the synergies between modern upstream technology and unique historical experience, embodied in both companies, create a solid basis for our continued success,” Abdullayev said.

Block D230 lies 135 kilometers north-east of Baku in the Caspian Sea. It covers an area of 3,200 square kilometers and has not previously been explored.