Petronas buys Statoil's Shah Deniz stake

October 13, 2014

Malaysian state-owned oil firm Petronas has bought Statoil’s stakes in the BP-operated Shah Deniz project from Norway’s Statoil for US$2.25 billion. 

Statoil says the move, which sees it exit the Shah Deniz project, is part of its portfolio management, freeing up cash to spend on high-value growth projects. Statoil already sold a 10% stake in Shah Deniz. In May, France’s Total also sold its 10% stake in the project, to Turkish state-owned oil company TPAO, which already held 9%.  

Image: The Southern Gas Corridor expansion

Shah Deniz was discovered in 1999. It is on the deep water shelf of the Caspian Sea, 70km south-east of Baku, Azerbaijan, in 50-500m water depths. Shah Deniz Stage 1 started in 2006. The development is currently producing about 26MM cu m of gas and 53,000 bbl of condensate per day, equivalent to about 225,000 boe/d.

In 2013, the Shah Deniz consortium approved a US$28 billion phase 2 development at the field that will see 16 billion cu. m/yr of gas moved 3500km from the field to consumers in Georgia, Turkey, Greece, Bulgaria and Italy. First production from phase 2 is expected by 2018.

Shah Deniz Stage 2, one of the largest gas developments in the world, will help increase European energy security by bringing Caspian gas resources to markets in Europe for the very first time. Gas deliveries to Europe are expected just over a year after first gas.

The deal announced today see’s Statoil sell its 15.5% participating interest in the Shah Deniz production sharing agreement, 15.5% share in the South Caucasus Pipeline Company (SCPC), 15.5% share in the SCPC holding company, and 12.4% share in the Azerbaijan Gas Supply Company (AGSC). 

Statoil will retain an 8.56 percent stake in the ACG field in Azerbaijan which is operated by BP and a 20 percent stake in the Trans Adriatic Pipeline (TAP), which will transport Azeri gas to European markets.

The Shah Deniz field is operated by BP (28.8%) and the other partners are TPAO (19%), SOCAR (16.7%), Lukoil (10%), Nico (10%).

Read more: Total exits Shah Deniz 

Shah Deniz 2 takes off 



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