BP to develop gas fields in Azerbaijan

BP is expected to close a deal with Azerbaijan’s national oil company today to explore and develop a huge natural-gas field in the Caspian Sea.

The field, Shafag-Asiman, has estimated reserves of 17 trillion cubic feet, according to the State Oil Company of the Azerbaijan Republic (Socar). If confirmed, that would make it almost as large as Azerbaijan’s massive Shah Deniz gas field, where BP is already operating.

The deal is BP’s first since Bob Dudley took over as chief executive of the energy giant. Dudley is currently visiting BP’s operations in Azerbaijan along with his predecessor, Tony Hayward.

The deal is a 50-50 production-sharing agreement over 30 years and would cement BP’s position in the oil-rich former Soviet republic, where it is one of the country’s biggest foreign investors.

BP is the largest producer in Azerbaijan and one of the largest investors in the country, having played a key role in opening it to international oil companies after the fall of the Soviet Union. Developing the Shafag-Asiman gas field would also reinforce Azerbaijan'’ role as a rising gas producer and exporter. Meanwhile, Russian joint venture TNK-BP has stepped up its efforts to buy BP’s assets in Algeria, which the company is selling as part of a $30bn asset disposal plan.


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