(MENAFN- AzerNews) By Amina Nazarli
September 14 saw another milestone in the history ofoil-rich Azerbaijan, as the country signed a landmark agreement with BP and its partners in theAzeri, Chirag fields and the Deep Water Portion of the Gunashli Field (ACG), embodying celebration of a 'Contract of the 21st Century.
The 1994 agreement on the ACG block of oil and gas fields in the Azerbaijani sector of the Caspian Sea was a crucial turning point in the rapid development of Azerbaijan and its economy.
Over the past 23 years the Contract of the Century has truly transformed Azerbaijan, energy supplies to Europe and the country aspires continue to work together to unlock the long-term development potential of ACG through new investments, new technologies and new joint efforts to maximize recovery.
The current amended and restated agreement on the joint development and production sharingwill be effective until the end of 2049 and here is the potential for more than $40 billion capital to be invested in the ACG oil field.
The new era begins in the development of giant Azeri, Chirag, Gunashli oil fields, said President Ilham Aliyev addressed a ceremony on the signing of the agreement 14 at the Heydar Aliyev Center on September. First Lady Mehriban Aliyeva also attended the event.
'Today is a remarkable and historical day, said the President Aliyev noting that the agreement to be signed today is of great importance for Azerbaijan.
'The agreement on development of Azeri, Chirag and Gunashli oil fields will be extended until 2050. The agreement is more beneficial for Azerbaijan. Although the agreement signed in 1994 also fully met our interests, this time it will be signed on better terms, said Ilham Aliyev.
The President then brought some basic parameters of the document to the attention of the participants, pointing out that after the signing of the agreement, the country will receive $3.6 billion in bonus from foreign investors.
SOCAR's AzACG company will take part in the fulfillment of the agreement as a contractor. SOCAR's share will increase from 11.6 percent to 25 percent and the share of profit oil for Azerbaijan will stand at 75 percent.
'Of course, the agreement includes many conditions and these basic terms already show that this agreement has a great importance for Azerbaijan's future development and for expanding our financial opportunities. At the same time, I would like to mention that the agreement was fulfilled with great success over 23 years and 436 million tons of oil was produced from Azeri, Chirag and Gunashli fields during these years, he said.
The President noted that the signing of the Contract of the Century is associated with the National Leader Heydar Aliyev, adding that the signing of the Contract of the Century in 1994, and attraction of big investments in the country were really a historical success.
'Twenty three years pass since that day. Over these years, Azerbaijan has developed rapidly. Today, our country is known in the world as a strong country standing on its own feet. Today we have very broad international relations. Azerbaijan has a very positive and high reputation on the international arena, said the head of state.
He said that Azerbaijan will further develop successfully. 'Our country has a great potential. We have strengthened this potential over the last years and the Contract of the Century has a special role in the development of this potential, added the president.
The partner countries of Azerbaijan also highly assessed the signed document, naming it important day for the country and the world energy sector.
The contract is now subject to ratification by the Azerbaijani Parliament. BP will remain the operator in accordance with the amended and restated ACG PSA.
Following the completion of the contract, the new ACG participating interests will be as follows: BP - 30.37 percent; AzACG (SOCAR) - 25.00 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; and ONGC Videsh Limited (OVL) - 2.31 percent.
Subsequent to this contract, SOCAR and its co-venturers have also agreed to progress engineering development work to evaluate an additional production platform in the ACG contract area.
Overall, the terms of the new contract reflect the growing financial and technological potential of Azerbaijan and SOCAR. This also proves the confidence of our foreign partners in the Azerbaijani economy, taking the effective partnership to a new level.
First oil was produced from the Chirag field on 7 November 1997. To date, the field has delivered around 3.2 billion barrels (around 440 million tonnes) of oil production, which has been exported to world markets, primarily via the Baku-Tbilisi-Ceyhan and Western Route Export pipelines.
ACG has also delivered over 30 billion cubic metres of associated gas in total to the Government of Azerbaijan. In the first half of 2017, total production from ACG averaged 585,000 barrels per day.
ACG currently has eight offshore platforms six production platforms and two process, gas compression, water injection and utilities platforms. The platforms export oil and gas to the Sangachal Terminal, one of the world's largest oil and gas terminals, onshore near Baku.
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