BP Has Spent $4 Billion on Azeri Project So Far

A total of $4 billion has so far been spent on the Azeri offshore oil project in Azerbaijan, said Neil Shaw, BP-Azerbaijan's vice president for the Azeri project.

Construction at the central Azeri field - part of the Azeri- Chirag-Gunashli (ACG) project - is 97% complete, the West Azeri rig 63%, the East Azeri rig 31% and the gas compressor and water injection platform 77% complete, Shaw told reporters at the Sangachal terminal.

Supports for the compressor and water injection terminal will be in place during September, when the Central Azeri rig will be floated out to sea. Azeri should yield its first oil between the end of December 2004 and the end of January 2005, Shaw said.

Other BP-Azerbaijan officials said construction of the gas compressor and water injection platform's upper modules was 55% complete. The platform will be fitted with four of the world's most powerful water pumps.

A 30-inch oil pipeline and a 28-inch gas pipeline that will link Central Azeri and the Sangachal terminal have been tested. Half of a fiber optic cable between the platform and the terminal is in place.

A first reservoir, capacity 880,000 barrels, has been built. A third reservoir is 75%-complete. All of them will be ready by the end of this year.

Phase-1 of the ACG project involves building a rig with 48 wells in the central section of the Azeri field. During the phase, Azeri will yield 1.425 billion standard barrels of oil or about 200 million tons. Production will peak at 18.7 million tons a year or 375,000 barrels a day.

Phase-2 involves building two 48-well platforms in the eastern and western sections of the Azeri field. Production is due to begin at West Azeri in the second quarter of 2006 and at East Azeri in the first quarter of 2007. More than 20 million tons a year or 420,000 barrels a day will be produced from the two platforms. The phase should yield a total of 210 million tons of 1.6 billion barrels of oil.

Contractors for phases one and two include McDermott of the United States, France's Bouygues Offshore, Italy's Saipem, France's Eiffel and Sweden's Emtunga.

BP is the ACG operator with a 34.1367% interest in the project. Other participants are SOCAR - 10%, Unocal - 10.2814%, Statoil - 8.5633%, ExxonMobil - 8.0006%, TPAO - 6.75%, Itochu Oil - 3.9025%, Amerada Hess - 1.0413%, Inpex Corp. - 10% and Devon - 5.6262% and Delta Oil - 1.68%.