BP-led Azeri Project Spending Dips
UK major BP spent less on its projects in Azerbaijan in 2018 than in the year before as major projects related to the Southern Gas Corridor (SGC) neared completion, the company said February 13.
BP-led consortia spent 38.7% less collectively in capital expenditure on Shah Deniz (SD) stages 1 & 2, the South Caucasus gas pipeline expansion, the Azeri-Chiragh-Guneshli block (ACG) and the Baku-Tbilisi-Ceyhan oil pipeline (BTC). These cost $2.987bn, while operating expenditures rose 15.8% to $1.238bn.
The SGC will deliver 6bn m3 SD2 gas to Turkey next year and 10bn m3/yr to EU by 2021. Last year, it supplied 1bn m3 and this year it will supply twice that. Azerbaijan started gas flow from SD2 to Turkey in late-July 2018.
Aggregate expenditure 2018 vs 2017 ($mn)
|
Projects |
Capex |
Y/Y change |
Opex |
Y/Y change |
|
SD (I&II) |
1,444 |
- 49.93% |
578 |
28.15% |
|
SCP & SCPX |
352 |
-55.1% |
39 |
34.48% |
|
ACG |
1,150 |
-2.21% |
505 |
10.74% |
|
BTC |
41 |
41.37 |
116 |
12.78% |
Source: BP
SD 1&2 produced 11.5bn m3 gas last year, 12.75% more than 2017, while gas condensate production stood at 2.5mn metric tons, about 4.1% above 2017 level. SD and SCP participating interests are: BP (28.8%), Turkish Tpao (19%), Azeri state producer Socar (10%) and Southern Gas Corridor Company (6.7%), Petronas (15.5%), Lukoil (10%) and Iran’s Nico (10%).
ACG also produced 584,000 b/d crude oil, a little less than last year, but sale gas output fell 20.69% on year to 2.3bn m3 owing to more re-injection into oil fields to maintain output.
ACG shareholders are BP (30.37%), Socar (25%), US Chevron (9.57%), Japanese Inpex (9.31%), Norwegian Equinor (7.27%), ExxonMobil 6.79%, Turkish TPAO 5.73%, Japanese Itochu 3.65% and Indian ONGC 2.31%.
Socar spokesman Ibrahim Ahmadov told NGW that Azerbaijan had spent $9.6bn of its $11.5 stake on SGC including SD2, SCPX, Trans Anatolian pipeline (Tanap) and Trans Adriatic pipeline (TAP). “Azerbaijan spent about $1bn last year and this year it will invest $900mn,” he said. The total cost of SGC from wellhead to Italian landfall is about $40.42bn.
Tanap shareholders are Azerbaijan’s SGCC 58%, Turkey’s Botas 30% and BP 12%, while TAP shareholders are BP 20%, Socar 20%, Italian Snam 20%, Belgium Fluxys 19%, Spanish Enagas 16% and Swiss Axpo 5%.