In the eight years between early 2001 and November 1, 2018, the State Oil Fund of Azerbaijan (SOFAZ) received $136.782 billion as part of the project to develop the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea, a source in SOFAZ said.
“In January-October 2018, SOFAZ received $8.296 billion within the ACG project,” Trend cited SOFAZ as saying.
The contract for developing the ACG field was signed in 1994, and a ceremony to sign a new contract on development of the ACG block of oil and gas fields was held in Baku September 14, 2017.
Head of the 'Caspian Barrel' Center for Oil Research Ilham Shaban, speaking with Vestnik Kavkaza, noted that a new mining platform is planned for ACG in the future. "The implementation of this project will begin in mid-2019, construction will last 36 months, the new platform will be launched until 2022. The project’s goal is to stabilize the level of oil production on the ACG, as at current capacities production is expected to decline from the current 29 million tons of oil per year up to 25 million tons in 5 years. Its implementation was laid in the contract signed last year to extend the operation of Azeri-Chirag-Guneshli to 2050. From 2022, this oil will keep production at these fields at constant levels," he said.
“During these three years the decline in production at ACG will be compensated by increasing volume of condensate production in the framework of Shah Deniz-2 projects (production of 3.5 million tons of condensate per year is planned), Absheron and other fields. As for revenues, they will also be kept at the same level, unless there are any spikes or drops in oil prices. By the way, this year the growth of the average annual price will be quite significant compared to the past year, and every additional $5-10 per barrel give significant revenue to Azerbaijan. So, the republic's oil prospects is the stability of production with rising prices," Ilham Shaban stressed.
Energy expert Rovshan Ibragimov, also pointed to the expansion of the ACG project due to the extension of the contract for its development until 2050. “New technologies will be used to produce oil at a greater depth, Azeri-Chirag-Guneshli still has deep perspective layers. As you can see, over the year of the extended contract, these fields generated more than $8 billion in revenue, and the growth in oil production is directly related to the fact that the project received additional investment in the development. In the future, investments in ACG will only grow, ensuring a high level of oil production in order to stabilize it by 30 million tons per year. Due to the expected increase in oil prices next year, state revenues from this project will also rise," he said.
"Production at those layers and wells that have already been drilled will continue, new wells are drilled periodically. In addition, in order to expand oil production at more difficult reservoirs, a new platform will be built with the help of which it is possible to carry out deep oil production, which once again proves that in the long term it is calculated that oil production in the Mesozoic layer is possible in Azerbaijan, which was not the case until now," Rovshan Ibrahimov concluded.