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BP invests in Azerbaijan Caspian projects

BP announced on Tuesday that the owners of the Shah Deniz field in the Azeri-Caspian Sea, led by BP, have made a decision to invest $2.9billion on increasing the output from the project.

Shah Deniz produced more than 4,000,000 tonnes of condensate last year. This is equivalent to around 35,000,000 barrels of gas, according to BP.

Other owners include Russia's LUKOIL and Turkey's TPAO. Azerbaijan SGC, NICO, and Hungary MVM are also involved.

Shah Deniz's expansion project aims to increase production by approximately 25 million barrels and 50 billion cubic meters (bcm).

BP, after a failed foray in renewables that began in 2020, has reduced its spending and redirected investments back to oil and gas. It also pledged to reduce its debt until 2027.

These projects are completely within BP's budget. Shah Deniz Compression was one of 8-10 major projects that BP expects to begin between 2028 and 2030.

It is expected that it will contribute to BP's upstream global production reaching 2.3-2.5 millions barrels of oil per day by 2030. The capacity for this to grow further until 2035.

Separately, BP announced on Tuesday that the company had acquired stakes in offshore exploration and production blocks in the Azerbaijani portion of the Caspian Sea.

BP announced in a press release that the agreements for finalising the deal had been signed by BP, and SOCAR (Azeri state-owned energy company).

No immediate indication was given as to the possible production volume.

Azerbaijan relies primarily on mature oilfields along the Caspian Sea. The country aims to maintain oil production at around 582,000 barges per day in the next five year with the help of Western energy companies.

Ilham Aliyev, the President of Azerbaijan, announced on Monday that Azerbaijan intends to increase its natural gas exports by eight billion cubic meters by 2030. Azerbaijan exported natural gas of 25 bcm in 2024.

Exxon Mobil announced on Monday that it had signed an agreement with the Azeri State Energy Company SOCAR to explore oil and gas production on land in Azerbaijan. (Reporting and writing by Nailia bagirova, Gleb Stolyarov, Felix Light and Mark Trevelyan; editing by David Evans and Mark Trevelyan)

(source: Reuters)