The State Oil Company of the Republic of Azerbaijan (SOCAR) and the Azerbaijan government have signed the amended and restated Azeri-Chirag-Deepwater Gunashli (ACG) production sharing agreement (PSA). The deal, which is subject to approval by the Azerbaijan parliament, would be effective until 2049.
SOCAR estimates that there is the potential for more than USD40 bn to be invested in the ACG oil field over the next 32 years. BP will remain the operator of the Caspian Sea field, with Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU and ONGC Videsh participating in the project.
As part of the contract, the international co-venturers will pay a bonus of USD3.6 bn to the State Oil Fund of the Republic of Azerbaijan, and SOCAR will increase its equity share in the ACG PSA from 11.65 percent to 25 percent. During the next 32 years, there is the potential for more than USD40 bn capital to be invested in the ACG oil field.
Subsequent to this contract, SOCAR and its co-venturers have also agreed to progress engineering development work to evaluate an additional production platform in the ACG contract area.
“Today is a significant day for Azerbaijan. It brings back the days when we signed the ‘Contract of the Century’,” said Rovnag Abdullayev, SOCAR president. “Since the signing of the first PSA in 1994, ACG has benefited from USD33 bn of investment, producing around 440 mn tonnes of oil, and delivering directly more than USD125 bn of net profit to our country.”