Azerbaijan is one of the British company’s key targets as it
seeks to build up businesses outside the United States, where its operations
have been under pressure in the wake of the Gulf oil spill.
The 50-50 joint venture with the State Oil Company of the
Republic of Azerbaijan, or SOCAR, gives BP access to unexplored waters in the
Shafag-Asiman field. SOCAR estimates the field has gas reserves of 17,000
billion cubic feet.
That would put the field, which lies 125 km southeast of the
capital of Baku, on par with the country’s current largest natural gas field,
Shah Deniz, which pumped about 700 million cubic feet of gas and 42,700 barrels
of gas condensate a day in the first half of the year. BP has a 25 percent
stake in that prospect.
“This is an important day for Azerbaijan and BP as it marks
the beginning of our bilateral cooperation in exploration and development of a
new offshore block,” Dudley said at an event in Baku. “With SOCAR and our
partners BP has helped to establish Azerbaijan as a world scale oil and gas
producer, and I believe the significant remaining potential will continue to
make it relevant for decades to come.” BP did not disclose financial terms of
the contract, which will last for 30 years. It will be the operator of the
project, searching for gas in waters 650-800 meters deep with a reservoir depth
of 7,000 meters.
BP’s blown out Macondo well in the Gulf of Mexico was about 1,610
meters deep.
The London-based company is the largest producer and one of
the biggest investors in Azerbaijan — it also operates the ACG oilfield and the
Baku-Tbilisi-Ceyhan pipeline — after becoming one of the early foreign entrants
following the fall of the Soviet Union.
Dudley has stressed BP’s intention to restore its shattered
reputation in the United States, where it produces a third of its oil and gas,
but the Azerbaijan deal is a signal he will also move swiftly to bolster the
company’s presence elsewhere as a backstop.
Even as he did so, the spotlight in the United States was
swinging to mistakes made by President Barack Obama’s administration in the
wake of the April 20 explosion on the Deepwater Horizon platform that started
the country’s biggest ever oil spill.
A preliminary report released Wednesday by the commission
appointed by Obama to investigate the disaster said that the administration
blocked efforts by government scientists to tell the public just how bad the
spill could become and committed other missteps that raised questions about its
competence and candor during the crisis.
