Production Begins at East Azeri in the Caspian Sea

23 October 2006 - The Azerbaijan International Operating Company (AIOC), operated by BP, today announced the start-up of oil production from the East Azeri platform four months ahead of schedule. East Azeri completes Phase 2 of the Azeri-Chirag-Gunashli (ACG) field development in the Azerbaijan sector of the Caspian Sea. Phase 3, which will develop the Deep Water Gunashli area of ACG, remains on schedule to commence production in 2008
The parties to the Azeri-Chirag-Gunashli (ACG) Production Sharing Agreement are: BP (operator - 34.1%), Chevron (10.3%), SOCAR (10%), INPEX (10.0%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), Hess (2.7%).
East Azeri (EA) is located in 150m water depth on the east side of the Azeri field. Production on this platform began from the first of eight pre-drilled wells on October 21. It will take about two weeks for the first oil from EA to reach the Sangachal Terminal via a new subsea pipeline to shore.
Production will increase through mid-2007 as the other pre-drilled wells are brought online, prior to platform drilling commencing. On plateau, the EA facility will produce 260,000 barrels per day bringing total Azeri production, including West and Central Azeri, to over 800,000 barrels per day.
“The start up from two world-class production platforms and the compression and water injection platform in the same field within a year is an achievement that not many oil companies around the world have accomplished. In the ACG development we have been able to create a project production line and undertake each stage more efficiently than the previous one, said David Woodward, BP’s President in Azerbaijan.
“This has enabled us to deliver first oil from East Azeri four months ahead of schedule and much credit is due to our ACG project and operations teams’ who have established this impressive track record of planning, construction and operations delivery in the Caspian Sea. I would like to thank the thousands of people, mostly from Azerbaijan, who built the jacket and topsides of this platform for their dedication and outstanding performance over the past three years. I would also like to congratulate the government, our partners, employees, all the contractors and suppliers and everyone involved, on this tremendous achievement.”
The EA facilities comprise a 48-slot production, drilling and quarters (PDQ) platform and a 30" oil pipeline tie-in to the onshore Sangachal Terminal along with other in-field pipelines and systems.
Oil from EA will be transported via the new 30” subsea pipeline to the onshore Sangachal Terminal. Associated gas produced from EA, less platform fuel needs, will flow via in-field subsea gas pipelines to the Compression and Water Injection Platform (C&WP) for re-injection into the reservoir for pressure maintenance. Surplus gas will be exported via an existing gas subsea pipeline to the Sangachal Terminal and onward to the Azerigas system for domestic use.
Note to editors:
The ACG Production Sharing Agreement (PSA), signed in September 1994, covers the 30 year development of the Azeri-Chirag-Gunashli contract area. It is estimated that 5.4 billion barrels of oil will be recovered during the PSA period. The field is being developed in several phases: Chirag has been producing since 1997 as part of the Early Oil Project (EOP). This was followed by Azeri Project Phase 1 - Central Azeri production in early 2005. Successive phases have included West Azeri, which started production in 2006, and East Azeri, which has just come on stream as Azeri Project Phase 2. The final ACG development phase - Phase 3 (Deepwater Gunashli) is under construction and expected to begin production in 2008.

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Tamam Bayatly

BP

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