BP has agreed to sell a 25 percent participating interest in the Shallow Water Absheron Peninsula (SWAP) exploration project in the Azerbaijani sector of the Caspian Sea to LUKOIL, the company has reported.
It was noted that following completion of the sale BP will remain operator of the SWAP production sharing agreement (PSA) during the exploration period, holding a 25 percent interest. On completion, participating interests in the PSA will be as follows: SOCAR Oil Affiliate – 50 percent, BP – 25 percent and LUKOIL – 25 percent.
The deal, with an effective date of July 1, 2021, is expected to complete in the fourth quarter of 2021.
LUKOIL President Vagit Alekperov noted that LUKOIL’s joining the project of BP and SOCAR falls in line with both Russia’s and Azerbaijan’s national interests related to the evolvement of international cooperation in the energy domain.
“I am convinced that all the scientific and technical resources gathered by the partners will boost the development of the prospective area in the shallow waters of the Absheron peninsula,” Alekperov said.
“We are pleased to welcome LUKOIL to the SWAP partnership, building on our successful relationship in the Shah Deniz project. We look forward to working closely with them and SOCAR on the exploration work program, which, if successful, will deliver value to Azerbaijan and to our partnership,” BP’s regional president for Azerbaijan Georgia and Turkey Gary Jones said.
The SWAP PSA was signed between BP and SOCAR in December 2014 and ratified by the Azerbaijani parliament in 2015.
The SWAP contract area stretches along the margins of the Caspian basin to the south of the Absheron peninsula. The acreage features water depths of up to 40 meters with potential reservoir depths of 2,000-5,000 meters.
A 3D seismic acquisition program was conducted in the contract area by BP in 2016. Following the completion of the processing and interpretation of the 3D data acquired from the contract area, a Notice of Prospectivity was submitted to SOCAR in 2017 in respect of three prospective areas – North Khali, Bibi-Heybat East and Garabatdag, with one exploration well planned to be drilled in each of the prospective areas.
The Environmental and Socio-economic Impact Assessment (ESIA) for the first SWAP well was disclosed in August 2020 and following public discussions was approved by the government in January 2021, providing permission to commence drilling activities in the contract area.
By Ayya Lmahamad