BP yesterday announced the completion of its purchase from Devon Energy of an additional interest in the BP-operated Azeri-Chirag-Gunashli (ACG) oilfield development in the Azerbaijan sector of the Caspian Sea.
“This is an important step which follows our announcement in March 2010 of a broad-ranging deal between BP and Devon Energy of which the Azerbaijan component has now been completed. The acquisition of the additional interest in Azerbaijan is part of BP’s commitment to the Caspian region as a core strategic area where we already hold a strong position and intend to enhance this significantly in the future,” said Rashid Javanshir, president BP Azerbaijan.
“Another equally important example of this intention is the Heads of Agreement (HOA) which we recently signed with SOCAR in Baku to define the basic commercial principles for a new production sharing agreement to jointly explore and develop the Shafag and Asiman offshore block in the Caspian,” Javanshir added.
Devon Energy’s 5.63% stake in the ACG development will be split between BP (3.29%) and Chevron (0.99%), Inpex (0.96%) and Itochu (0.38%) who have exercised preferential rights in relation to the transaction.
The ACG Production Sharing Agreement (PSA), signed in September 1994, covers the 30 year development of the Azeri-Chirag-Gunashli contract area. It was ratified by the Milli Majlis and became effective on December 12 the same year.
The additional interest acquired from Devon will increase BP’s operating interest in the ACG development to 37.43% and those of Chevron, Inpex and Itochu to 11.27%, 10.96% and 4.30% respectively, with the remaining interests held by AzACG (a subsidiary of SOCAR, the State Oil Company of the Azerbaijan Republic – 10%), Statoil (8.56%), Exxon (8%), TPAO (6.75%) and Hess (2.72%).
