The UK Department of International Trade (DIT) is urging UK companies to invest in Azerbaijan’s oil and gas sector, citing the opportunities available in the “Motherland of Oil."
“People who think they know about Baku and Azerbaijan should take another look,” Steven Smith, head of trade and investment at the British Embassy in Baku told SPE Offshore Europe last week.
The image that some might have of Azerbaijan dates from 25 years ago, when the country first gained its independence from the USSR. Today, the country is modern, politically stable, forward thinking, Western leaning, and safe.
Azerbaijan, which ranks 20th in global oil resources, saw its first commercial oil well drilled in Azerbaijan in 1848. The nation’s oil and gas sector was revolutionized in 1994, when BP and SOCAR signed the “Contract of the Century,” a 30-year deal covering development of the Azeri oilfield in the Caspian Sea. An extension of that contract to 2049 was signed today.
Azerbaijan remains a major focus of investment for BP, said Joe Murphy, VP for the Southern Gas Corridor project for BP. To date, ACG has produced 585,000 b/d of oil, or 3 billion bo to date, said Murphy. Azerbaijan also offers significant natural gas production potential, with the discovery in 1999 of the massive Shah Deniz gas condensate field, one of the largest in the world. The Southern Corridor gas project, has involved drilling of some of the most technically challenging fields and the installation of 3500km of pipeline to export Shah Deniz Phase 2 gas to Europe. First gas is anticipated next year, with gas export to Europe in 2020.
With around $2 billion in contracts for Shah Deniz, significant potential exists for UK companies, the DIT session heard. BP is looking to work with companies who see a chance to optimize services, can bring standardization to lower costs, and are open to new technologies, delegates were told. Big Data and analytics will play a key role in the new low oil price environment, including Azerbaijan. BP is seeking top performers, but with a mind to maintain safety, Murphy said.