BP operates the ACG field, which is the largest oilfield in the Azerbaijan sector of the Caspian basin, located about 62 miles (100 kilometers) east of Baku, Azerbaijan. The spudding follows the safe completion of all offshore hook up, installation and commissioning of the ACE topsides unit, which sailed from the Bayil fabrication yard in August, the company said in a news release Tuesday.
The company said it plans to drill the well up to a total depth of up to 10459 feet (3188 meters), which is expected to take around three months.
The $6 billion ACE project is the next stage of development of the ACG field in the Caspian Sea. ACE is a new 48-slot production and drilling platform located midway between the existing Central Azeri and East Azeri platforms in a water depth of 449 feet (137 meters), BP said. The ACE platform and facilities are designed to process up to 100,000 barrels of oil per day, and the project is expected to produce up to 300 million barrels over its lifetime.
The project also includes new infield pipelines to transfer oil and gas from the ACE platform to the existing ACG Phase 2 oil and gas export pipelines for transportation to the onshore Sangachal terminal. Between the East Azeri and ACE platforms, a water injection pipeline supplies water to supply injection water from the Central Azeri compression and water injection platform to the ACE facilities, the company added.
“We are excited to commence drilling the first platform production well on ACE”, Gary Jones, BP regional president for Azerbaijan, Georgia and Turkey, said. “This allows us to meet our first oil production target for ACE and deliver it in early 2024. A great deal of preparation has been made to assure a safe and robust drilling program using our experience, as well as our innovative approach, automated processes, and advanced technology. We look forward to delivering this first ACE production well safely, efficiently and on schedule”.
In the first half of 2023, BP and its co-venturers spent about $232 million in operating expenditure and $746 million in capital expenditure on ACG activities, and BP drilled an appraisal well on the Azeri-Chirag-Gunashli structure, targeting to acquire data about the deep-lying gas reservoirs beneath the currently producing oil field. The well was spudded in February and completed in April. The data obtained from the well is currently being studied to understand the potential of the deep gas layers, according to the BP Azerbaijan website.
The total production of ACG for the first half was an average of around 375,000 barrels per day, about 68 million barrels or 9 million metric tons in total. At the end of the second quarter, 137 oil wells were producing, while 44 were used for water and seven for gas injection, BP noted.
ACG is Azerbaijan’s first offshore production sharing agreement (PSA) and it signifies the institutionalization of Azerbaijan’s new oil strategy, and the creation of a framework that provides legal stability for investors, BP said on its website. According to the PSA, for each stage of field development, the participating oil companies cover all development costs and recover them in the form of “cost recovery oil”. The rest of the oil produced is “profit oil” which is then split between the companies and the State of Azerbaijan.
Following ratification of the PSA, the Azerbaijan International Operating Company (AIOC) was formed to implement the agreement on behalf of the foreign shareholders working in partnership with the State Oil Company of Azerbaijan Republic (SOCAR) and the Azerbaijan government. In June 1999, BP assumed operatorship for AIOC, and it currently holds a stake of 30.37 percent.