bp revises Caspian situation

The ecological catastrophe in the Gulf of Mexico, the loss of a platform and the ongoing oil spill have substantially undermined BP’s positions. Its share prices have dropped by almost 50 %, and the company has found itself in a critical situation. British Petroleum mostly needs finances to provide for an ecological fund, costing $20 billion, agreed with the US government ,and also several billion dollars to cover current expenses  relating to the oil spill. The company’s top management intends to sell some property around the world, which puts an interesting perspective on BP president Tony Hayward’s visit to Azerbaijan.

The company is currently realizing several large-scale energy projects in the Caspian region. For this company, this group of projects is one of the most successful in the former USSR.

Hayward will be received by the president of Azerbaijan. Meetings will also be held in the State Oil Company of Azerbaijan to discuss ongoing projects. In March, BP and Azerbaijani authorities agreed to continue the Azeri–Chirag–Guneshli project and create one more oil-producing platform in Chirag in the next 3-4 years. Total investment is estimated at $6 billion.

But, due to the current situation, it will be very difficult to mobilize funds for Chirag-2’s construction and it can not be ruled out that Hayward will ask Azerbaijan to assist BP in getting a loan. BP earlier took the State Oil Company expenses upon itself in lieu of future oil deliveries. This scheme was implemented several years ago. But now it may work the other way round. It is also quite probable that the company will ask Azerbaijan for loan.

Eugeny Krishtalev. Exclusively for VK