SOCAR (the State Oil Company of the Republic of Azerbaijan) and AIOC (the Azerbaijan International Operating Company) have signed a letter of intent (LoI) for the future development of the Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea.

The agreement will cover the development of the field until 2050 and will add significant resource development potential to the middle of the century. Currently, ACG produces circa 620,000 barrels of oil equivalent.

The shareholders in AIOC are BP, Chevron, INPEX, Statoil, ExxonMobil, TPAO, ITOCHU and ONGC Videsh.

The LoI was signed in Baku today by Rovnag Abdullayev, President of SOCAR, on behalf of the Republic of Azerbaijan, and by Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, on behalf of the AIOC partnership.

The LoI agrees the key commercial terms for the future development of the ACG field and enables the parties to conclude negotiations and finalise fully-termed agreements in the next few months.

Rovnag Abdullayev comments, “We have been in negotiations with ACG’s foreign partners for some time. We will complete fully-termed agreements in the near future. ACG is known as the “Contract of the Century”. It is very important to Azerbaijan – it is the symbol of our oil industry. It has opened up a whole new era for the country’s development. The Letter of Intent we signed today with ACG’s foreign partners signifies that we can now look ahead to many more years of ACG’s success.”

Bob Dudley, BP CEO, says, “This is an important day for Azerbaijan, SOCAR and the AIOC partnership. It opens up an exciting opportunity to the middle of the century for us to continue this extraordinary partnership. In 1994 we set out to develop ACG in the new phase of the country’s energy journey. BP is very proud to be a part of this long-term partnership and looks forward to continuing it for many decades to come.”

Gordon Birrell adds, “As operator of ACG we are pleased to have the opportunity to continue to lead this world-class field development safely and efficiently. Today’s signing allows us to look ahead to the next chapter in ACG’s success and indeed in Azerbaijan’s energy story. We believe together we will be able to build on this success by continuing to combine the country’s potential and experience with leading technology. This agreement will enable future investments and projects, and will bring many thousands of jobs in the years ahead.”

Tags: AIOC, BP, Chevron, ExxonMobil, INPEX, ITOCHU, ONGC Videsh, SOCAR, Statoil, TPAO