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BP agrees to develop Azerbaijan gas field

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A BP-led consortium has come to an agreement with Socar, the state-owned oil company of Azerbaijan, to develop a new gas field in the Caspian Sea.

The BP-led consortium drilled an appraisal well earlier last year, with BP, the maker of the Castrol lubricant and metalworking ranges, confirming the presence of a reservoir later in June.

This reservoir lies below the huge Azeri-Chirag-Gunashli (ACG) oil field and is believed to hold about 4 trillion cubic feet of gas in place, which refers to the total amount of natural gas present in the reservoir, rather than what will ultimately be recoverable.

The new agreement was implemented as an addendum to the current production-sharing agreement (PSA) between Socar and the consortium for the ACG oil field, which runs until 2049.

The president of Socar, Rovshan Najaf, was quoted as saying:

“We are once again proving that Azerbaijan is a reliable partner in global energy markets. This project will bolster Azerbaijan’s role as a key supplier of energy to Europe, contributing to the energy security of our partners.”

Azerbaijan has previously promised to double its natural gas exports to Europe from 10 to 20 billion cubic metres (bcm), something that would greatly help energy security in Europe.

Azerbaijan’s European exports through the Southern Gas Corridor amounted to 11.8 bcm last year, which is thought to be the maximum capacity of the pipeline system. The new development will help the operators of the three pipelines in the system to attract the investment needed to raise capacity to 20 bcm.

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