Bloomberg News

BP to Keep Azerbaijan’s ACG Oil Output Stable After Declines

October 24, 2012

BP Plc (BP/) plans to keep production at Azerbaijan’s Azeri-Chirag-Gunashli oilfield stable through 2020, halting a decline that prompted criticism from the president this month, according to the country’s state oil company.

It will rise to 35 million metric tons (about 255 million barrels) in 2014 from 33 million tons next year, and then hold at 33 million to 34 million tons through 2020, State Oil Co. of Azerbaijan Chief Executive Officer Rovnaq Abdullayev said.

Output from Azeri-Chirag-Gunashli, in which BP holds 35.8 percent, slid 12 percent in the first half from a year earlier, averaging 684,000 barrels a day, according to company data on its website. Azeri President Ilham Aliyev this month censured BP for allowing output at the country’s biggest oilfield to slip.

“For the plateau period until 2020, we would be happy with 700,000 barrels a day,” Abdullayev told reporters today in Baku. “We are working on this program.”

BP sent executives to Azerbaijan to review plans to bolster output, the London-based company said in an e-mailed statement.

“We remain committed to resolving ACG production issues,” Bob Fryar, BP’s executive vice-president for production, said in a statement. “To do this as quickly as possible, we have committed to bringing here BP’s best global resources.”

BP has three vice presidents in the country working on a field plan, according to Socar, which said it has no plans to replace the company as project operator even though its contract allows it to do so. Extending the contract beyond 2020 is out of the question unless BP can guarantee targets, Abdullayev said.

BP said last week it had added engineers in Azerbaijan and replaced officials to revive output after Aliyev accused it of “grave mistakes” that led to a surprise output drop. He sought “serious measures” and the replacement of those responsible.

CEO Bob Dudley met with Abdullayev in London last week to discuss plans for Azeri-Chirag-Gunashli. The field, producing 35.4 million tons in 2011, makes up about 78 percent of Azeri output. BP gets about 3 percent of its crude from the country.

To contact the reporter on this story: Zulfugar Agayev in Baku at zagayev@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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