Second Phase of Azer-Chirag-Gunashli Development Approved

The second phase of Azerbaijan's Azeri-Chirag-Gunashli (ACG) development was formally approved today, September 18. Statoil has an 8.6 percent holding in this stage of the project. The new phase will embrace the eastern and western flanks of the huge Caspian field, which comprises the Azeri, Chirag and Gunashli structures.

According to operator BP, the sections being developed in stage II contain about 1.6 billion barrels of oil. Early production from the Chirag platform began in 1997, with daily oil output averaging around 130,000 barrels.

In August 2001, the partners sanctioned phase I of a full field development. This covers the central part of the Azeri structure and will yield about a million barrels per day when completed. Production from ACG is due to be piped through the Baku-Tbilisi-Ceyhan (BTC) trunkline from the first quarter of 2005. This will be the third export system for Azeri oil. "Development approval for phase II means we've passed an important milestone in the project's history," says Ottar Rekdal, senior vice president for international gas and power in International Exploration & Production. "ACG is a massive project, with great significance both for the companies involved and for Azerbaijan."