Baku, March 9 (AZERTAC). The Steering Committee for the development of the Azeri, Chirag and deepwater portion of the Gunashli (ACG) fields today sanctioned investment in the new Chirag Oil Project (COP).

The $6 billion development plan is the next major step in the ongoing development of the ACG field in the Azerbaijan sector of the Caspian Sea.

The project is planned to increase oil production and recovery from the ACG field through a new offshore facility which is designed to fill a critical gap in the field infrastructure between the existing Deepwater Gunashli (DWG) and Chirag-1 platforms.

Rovnaq Abdullayev, president of the State Oil Company of the Azerbaijan Republic (SOCAR), said: “Today`s event is a step forward towards realization of Azerbaijan`s energy production growth plans aimed at positioning the country as one of the major suppliers to the world`s oil markets. We believe the project`s immediate benefits are even more valuable to us because for the first time the project`s world class multi-billion dollar facilities will be fabricated inside the country fully utilizing local resources.”

“This is a clear indication that since the construction of its first offshore platform Azerbaijan has succeeded in developing and upgrading its oil industry capabilities including workforce and infrastructure to world standards,” Abdullayev added.

Rashid Javanshir, BP Azerbaijan president, said: “This is an extremely important project which marks the continuation of the outstanding work undertaken jointly by SOCAR and AIOC since the start of development of the ACG field. I am sure I speak for all AIOC shareholders when I say how proud we are to have taken this major investment decision. It underlines the confidence we all have in the future of Azerbaijan and in our joint success.”

The COP development will allow recovery of an additional 360 million barrels of oil in total. This aim will be achieved by installing new wells that will primarily target the currently producing Fasila reservoirs and also the Balakhany X, IX and VIII reservoirs above the Fasila.

The Chirag Oil Project will comprise an installation located in the Chirag-Deep Water Gunashli (DWG) area of the ACG field, at a sea depth of approximately 170 meters. The facility will be a single production, drilling and living quarters (PDQ) platform with capacity to produce 185,000 barrels of oil per day (gross).

The new platform will be partially integrated with the existing DWG facility via marine pipelines that import reservoir injection water and export produced water for disposal. Oil and gas produced by the new platform will be processed at Sangachal Terminal.

Some $4 billion of the total project value will be spent on the construction of facilities and the pre-drill program, and the balance of the sum will be spent on the platform development well drilling during the production period.

First oil from the Chirag Oil Project, the latest stage in ACG`s development stretching back more than 15 years, is expected in late 2013.

ACG participating interests are: BP (operator - 34.1%), Chevron (10.2%), SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), ITOCHU (3.9%), Hess (2.7%).