BP Ready to Buy Out US Majors in Caspian ACG

BP is ready to consider purchase of the stakes of ExxonMobil and Chevron in Azerbaijan’s offshore Azeri-Chirag-Guneshli block, CEO Bob Dudley said April 3 during an LNG summit in Shanghai.

He did not say whether BP is ready to acquire all of American companies’ stakes, or a part of that, but BP's Azerbaijan strategy vice president, Bakhtiyar Aslanbeyli, told NGW that it may purchase all the shares on offer, if the price is right. “ACG is BP’s first and the most successful project in the Caspian Sea. BP can increase its stake to 47%,” he said. But the majors have not yet prepared proposals and prices for selling their shares in Azeri block.

Exxon Mobil holds 6.79% and Chevron 9.57% in ACG. Other shareholders are operator BP 30.37%, state-run Socar 25%, Japanese Inpex 9.31% and Itochu 3.65%, Norwegian Equinor 7.27%, Turkish Petroleum Corporation (Tpao) 5.73%, Itochu 3.65% and Indian ONGC Videsh 2.31%.

An Azerbaijan government source told NGW December 5 that ExxonMobil and Chevron were planning to leave this project in order to focus on other activities, such as major expansion of their production at home in the Permian Basin, Texas.

BP's president for Azerbaijan, Georgia and Turkey Gary Jones told NGW March 6 that the American companies have announced their intention but have not yet taken any practical steps.

The BP-led ACG consortium signed a 25-yr extension contract in September 2017 to spend $40bn more on ACG by 2050, compared with the $43.5bn already spent since 1994, of which $35bn was capital expenditure.

ACG production has been declining since early 2000 and the recovery rate is about 50%. “We plan to both maintain production level and increase recovery rate,” Jones said. Since 1997, ACG has produced 3.5bn barrels of oil and currently its production level stands at about 584,000 b/d.

The block produces 12.5bn m³/yr gross associated gas, of which 18.8% is sold and the rest is re-injected to maintain oil production.