The State Oil Company of the Republic of Azerbaijan (SOCAR) and the Azerbaijan government have signed the amended and restated Azeri-Chirag-Deepwater Gunashli (ACG) Production Sharing Agreement (PSA) which will now be effective until 2049. The deal is now subject to approval by the Parliament (Milli Majlis) of the Republic of Azerbaijan. SOCAR estimates that there is the potential for more than US$40bn capital to be invested in the ACG oil field over the next 32 years.
Under the framework of the new agreement, BP remains the operator of the ACG field but SOCAR will increase its equity share from 11.65% to 25% and the participating interest of all partners will be adjusted as follows: BP, 30.37%, AzACG (SOCAR), 25.00%, Chevron 9.57%, INPEX 9.31%, Statoil 7.27% ExxonMobil 6.79%, TP 5.73% Itochu 3.65% and ONGC Videsh Limited (OVL) 2.31%. Besides, the international co-venturers will have to pay a bonus of US $3.6bn to the State Oil Fund of the Republic of Azerbaijan.
The initial PSA was signed in 1994 and the ACG field has received US$33bn of investments since then. It produced 3.2 MMbbl of oil (around 440 Mt) and 30 bcm of gas since the first oil in 1997. In the first half of 2017, the total production from ACG averaged 585,000 bbl/d. ACG operations currently consist of eight offshore platforms, namely six production platforms and two process facilities (gas compression and water injection). The hydrocarbons are then exported to the Sangachal Terminal (near Baku, Azerbaijan). The oil production has been exported to world markets, primarily via the Baku-Tbilisi-Ceyhan (BTC) and Western Route Export (WREP) pipelines.