500 million tons of oil to be extracted from ACG

Azeri-Chirag-Gunashli (ACG) block, located in the Azerbaijani sector of the Caspian Sea, produced 445 million tons of oil and 140 billion cubic meters of gas since the beginning of development and up to December 1, 2017.

First Vice-President of the State Oil Company of Azerbaijan (SOCAR) Khoshbakht Yusifzadeh stated that as of this date, 250 million tons of Azerbaijan’s profitable oil was sold on the world market: “This makes up 56 percent of all profitable oil sold on the world market.”

As of December 1, about 460 million tons of oil were exported to the world market, of which about 350 million tons was accounted for by the Baku-Tbilisi-Ceyhan (BTC) pipeline.

Yusifzadeh went on to say that up to 500 million tons of oil will be extracted from the ACG by 2050.

It is assumed that the volume of oil production from the ACG in 2018 will be 204.4 million barrels, or 28 million tons.

The Vice-President added that to date, $43 billion has been invested in ACG.

A contract for development of ACG block of oil and gas fields was signed in 1994 for 30 years. Thirteen companies from eight countries (Azerbaijan, the U.S., Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) have participated in signing of the "Contract of the Century".

Azerbaijan’s state oil company SOCAR and BP-operated Azerbaijan International Operating Company (AIOC) signed an agreement on future development of the ACG field in December 2016.

The agreement will cover the development of the field until 2050 and will add significant resource development potential. The document specifies the key commercial terms for the future development of the ACG field and enables the parties to conclude negotiations and finalize fully-termed agreements in the next few months.

Azerbaijan’s revenues from profitable oil in the new contract have been fixed at 75 percent.

The ACG field, which lies 120km off the coast of Azerbaijan, is considered to be the largest oilfield in the Azerbaijan sector of the Caspian Sea.

The proven oil reserves of the block amounts to approximately 1 billion tons.

From the beginning of first oil production in November 1997 and until September 1, 2017, some 435.6 million tons of oil and 136.3 billion cubic meters of associated gas were produced in the ACG block of oil and gas fields in the Caspian Sea.

Shareholders of the ACG development include BP with 35.8 percent, SOCAR - 25 percent, Chevron - 11.3 percent, Inpex - 11 percent, AzACG - 11.6 percent, Statoil - 8.55 percent, Exxon - 8 percent, TRAO6.75 percent, Itochu - 4.3 percent and ONGC - 2.7 percent.