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ROGTEC Magazine - Russian Oil & Gas Technologies - News, Reviews & Articles

BP Russia: David Campbell Appointed President

Tuesday, April 1st, 2014

BP announced the appointment of David Campbell as President of BP Russia, reporting directly to Bob Dudley, BP Group Chief Executive.

Campbell, who is currently Head of the Group Chief Executive’s Office in London, will be based in Moscow. He has 30 years’ experience in BP, in commercial, technical and operational leadership roles. He has worked across a wide range of onshore and offshore upstream operations in international locations including the Alaskan arctic, the North Sea, Mexico, and as chief operating officer of BP’s operations in Iraq. He has also held senior roles in trading and in the company’s corporate centre. Between 2003 and 2007, Campbell was based in Russia as a senior member of TNK-BP’s upstream leadership team.

Campbell’s appointment consolidates several leadership positions presently managing BP’s business and interests in Russia under one senior executive based in Moscow.

Welcoming Campbell’s appointment Bob Dudley said: “I have worked closely with David and know that he has a huge breadth of experience and a deep understanding of the global energy industry. He has significant experience of working in Russia and will play a central role in shaping BP’s future and activities in one of the world’s most important oil and gas regions.”

Campbell takes up his new role with immediate effect.



BP Reaches Administrative Agreement with EPA Resolving Suspension and Debarment

Friday, March 14th, 2014

Agreement Clears the Way for BP to Enter Into New Contracts With the Federal Government

BP today announced that it has entered into an administrative agreement with the United States Environmental Protection Agency (EPA), on behalf of the federal government, resolving all matters related to the suspension, debarment and statutory disqualification of BP following the Deepwater Horizon accident and oil spill. As a result of this agreement, BP is once again eligible to enter into new contracts with the US government, including new deepwater leases in the Gulf of Mexico.

The administrative agreement applies to all of the suspended and debarred BP entities, including BP Exploration & Production Inc., BP p.l.c. and certain affiliated companies.

“After a lengthy negotiation, BP is pleased to have reached this resolution, which we believe to be fair and reasonable,” said John Mingé, Chairman and President of BP America, Inc. “Today’s agreement will allow America’s largest energy investor to compete again for federal contracts and leases.”

Under the terms and conditions of the administrative agreement, which will apply for five years, BP has agreed to a set of safety and operations, ethics and compliance, and corporate governance requirements, including those contained in the remedial order stemming from BP’s 2012 Plea Agreement with the US Department of Justice and Final Judgment Order with the US Securities and Exchange Commission.

As part of the administrative agreement, BP will dismiss the lawsuit it filed against the EPA in federal court in Texas for improper statutory disqualification and suspension.



BP: Production Begins at West Chirag in the Caspian Sea

Wednesday, January 29th, 2014

The Azerbaijan International Operating Company (AIOC), operated by BP, today announced the start-up of oil production from the West Chirag platform as part of the Azeri-Chirag-Gunashli (ACG) field development in the Azerbaijan sector of the Caspian Sea. Start-up of the West Chirag platform completes the Chirag Oil Project (COP) sanctioned in 2010.

West Chirag production began from one of the pre-drilled wells – J05, on 28 January. The oil will first pass through the newly installed processing facilities on the platform and then will be exported to the Sangachal Terminal via a new in-field pipeline linked to an existing 30” subsea export pipeline. Production will increase through 2014 as the other pre-drilled wells are brought on line.

Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, said: “The start-up of COP marks a major milestone in the development of the super- giant ACG field. West Chirag is the eighth world-class offshore platform that we have built and operated in a safe and efficient manner in the Caspian. To date the ACG field has produced over 2.3 billion barrels of oil and with future continual major investments in new technologies and facilities, like the one we have today started up, it will continue to produce as a world-class reservoir for many decades. BP as the operator of the ACG field and our partners are committed to continuing the efforts that are expected to take us step by step towards optimization of production and maximization of the field recovery. We believe COP represents a big step forward towards stabilizing ACG’s production and increasing recovery by drilling more wells from the new West Chirag facility.

“I would like to take this opportunity to thank the thousands of people, mostly from Azerbaijan, who built and installed the subsea pipelines, jacket and topsides unit of the new platform, for their dedication and outstanding performance over the past four years. I would also like to congratulate the government, our partners, employees, all the contractors, suppliers, and everyone else involved on this tremendous achievement. I would like to specifically highlight the outstanding performance of ACG’s project, drilling, and operations teams in safely achieving First Oil. This demonstrates our ability to continue the impressive track record of planning, construction, and operations delivery in the Caspian Sea”.

The West Chirag platform has been installed at a water depth of about 170 metres between the existing Chirag and Deepwater Gunashli platforms. The design oil capacity of the new platform is 183 thousand barrels per day. The gas export capacity is 285 million standard cubic feet per day.

ACG participating interests are: BP (operator – 35.8%), SOCAR (11.6%), Chevron (11.3%), INPEX (11%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), ITOCHU (4.3%), ONGC Videsh Limited (OVL) (2.7%).



AMEC Tekfen Azfen Consortium Awarded $974 million Contract by BP for the Shah Deniz 2 Offshore Platforms, Azerbaijan

Tuesday, January 28th, 2014

The AMEC Tekfen Azfen (ATA) consortium has been awarded a contract totalling $974 million for BP-operated Stage 2 development of the Shah Deniz gas field in the Caspian Sea. AMEC will contribute its project and construction management expertise to the consortium.

The contract covers the fabrication, load out and offshore hook-up and commissioning of the topsides units of the two Stage 2 platforms including the Production and Risers platform and Quarters and Utilities platform. Both topsides units will be built at the ATA fabrication yard in Bibi-Heybat near Baku. The construction works under this contract are planned to commence in January 2014, with the completion expected in 2018.

AMEC Chief Executive Samir Brikho said: “Winning this excellent contract supports our growth strategy and comes as a result of our successful and safe delivery of projects in this region for BP-operated projects. I am proud of our commitment to the region and the contribution we have made to the growth of Azerbaijan’s national oil industry.”

Richard Rippon-Swaine, Oil & Gas Director for AMEC’s Growth Regions, added: “This latest award reinforces our successful long-standing relationship with BP and with our partners Tekfen and Azfen. We have developed a strong track record in Azerbaijan, applying our global skills locally to deliver projects and engineering services safely and effectively.”

AMEC has worked for BP-operated projects in Azerbaijan for 16 years and, as part of the ATA consortium, has successfully completed three major platform topsides as well as providing offshore asset support services in the Caspian. Most recently ATA successfully completed the 19,000-tonne COP-WC project which was recently installed offshore.



Shah Deniz Final Investment Decision Paves Way for Southern Corridor Gas Link with Europe

Tuesday, December 17th, 2013

The Shah Deniz consortium today announced the final investment decision (FID) for the Stage 2 development of the Shah Deniz gas field in the Caspian Sea, offshore Azerbaijan. This decision triggers plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects, as well as gas transmission infrastructure to Bulgaria, will create a new Southern Gas Corridor to Europe.

The Shah Deniz project entails several elements: offshore it includes drilling and completion of 26 subsea wells and construction of two bridge-linked platforms; onshore there will be new processing and compression facilities at Sangachal.

The total cost of the Shah Deniz Stage 2 and South Caucasus Pipeline (SCP) expansion projects will be around $28bn. 16 billion cubic metres per year (bcma) of gas produced from the giant Shah Deniz field will be carried some 3,500 kilometres to provide energy for millions of consumers in Georgia, Turkey, Greece, Bulgaria and Italy. First gas is targeted for late 2018, with sales to Georgia and Turkey; first deliveries to Europe will follow approximately a year later.

Condensate production from the Shah Deniz field is expected increase to 120,000 barrels per day, from current levels of about 55,000 barrels per day.

In the shorter term, the Shah Deniz partners have agreed terms with SOCAR for expanding production through the existing facilities by 1.4bcma. The production increase is already in progress and is expected to be complete by the end of 2014.

SOCAR and the Shah Deniz partners have also agreed terms for extending the Shah Deniz Production Sharing Agreement up to 2048. The Shah Deniz partners have agreed to undertake exploration and appraisal work on prospects within the PSA area.

The official signing of the Shah Deniz Stage 2 FID took place today in a ceremony at the Heydar Aliyev Centre in Baku. It was witnessed by H.E. President Ilham Aliyev of the Republic of Azerbaijan who was joined by leaders from nations along the Southern Corridor, as well as from the European Commission and other countries.

Rovnag Abdullayev, President of SOCAR, said: “This is a truly historic day for Azerbaijan. This is the first time that our country and this region has embarked upon such an ambitious gas project. This project paves the way for Azerbaijan’s future and the region’s future. Firstly, it enables us to unlock Azerbaijan’s giant gas resources for the benefit of our nation. Secondly, it establishes Azerbaijan as an important energy supplier to Europe, fulfilling a vision we have had for so many years. Thirdly, it brings benefits to countries stretching from the Caspian Sea to the heart of Europe through creating a direct transportation link between the Caspian and the European gas markets.”

Bob Dudley, Group Chief Executive of BP, the operator of the Shah Deniz Stage 2 and SCP expansion project, said: “Very few projects have the ability to change the energy map of an entire region. Shah Deniz 2 and the Southern Corridor pipelines will not only change the energy map, but will give customers in Europe direct access to the gas resources of Azerbaijan for the first time. The final investment decision today would not have been possible without years of cooperation between many companies and many countries. I am proud that BP can be part of this historic moment, and grateful for the efforts of so many people in making this possible. As well as creating tens of thousands of jobs along the route of the pipelines in Azerbaijan, Georgia, Turkey and Europe, this project represents the largest ever foreign investment to Azerbaijan.”

“I am particularly pleased that we have agreed terms for extending the Shah Deniz Production Sharing Agreement up to 2048. This enables BP and our partners to work in partnership with Azerbaijan in appraising future stages of Shah Deniz. BP’s discovery of the new Shah Deniz Deep field in 2007 demonstrates the potential in this area beyond Shah Deniz Stage 2,” he added.

Today’s decision means that gas sales contracts with nine European companies will now come into effect. As a result some 10 bcma of Shah Deniz gas are expected to be delivered for 25 years to customers in Italy, Greece and Bulgaria. In addition, some 6 bcma of Shah Deniz Stage 2 gas will be delivered to consumers in Turkey. All gas sales and transportation contracts will be managed by the Azerbaijan Gas Supply Company established by Shah Deniz co-ventures under the operatorship of SOCAR. The Shah Deniz Stage 2 development and Southern Corridor pipeline projects  together represent one of the largest and most complex endeavours yet undertaken by the global oil and gas industry.

The Shah Deniz field was discovered in 1999. Azerbaijan has been exporting gas to Georgia and Turkey since 2006 from the Shah Deniz stage 1 development.

Coincident with the FID, SOCAR purchased 6.7 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil, and BP purchased 3.3 per cent equity in Shah Deniz and the South Caucasus Pipeline from Statoil. Both of these transactions are subject to conditions that are expected to be satisfied in 2014.



BP: Wins Macondo Claims Payout Appeal

Thursday, October 3rd, 2013

BP is extremely pleased with today’s ruling by the U.S. Court of Appeals for the Fifth Circuit setting aside the claims administrator’s interpretation of the business economic loss framework in the settlement agreement BP reached with the Plaintiffs’ Steering Committee last year. Today’s ruling affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly non-existent losses. We are gratified that the systematic payment of such claims by the claims administrator must now come to an end.

As part of today’s decision, the Fifth Circuit has also reversed the District Court’s denial of BP’s motion for a preliminary injunction staying the payment of business economic loss claims under the agreement. The Fifth Circuit has ordered the District Court to “expeditiously craft” an injunction that stays payments to people who did not suffer “actual injury traceable to loss from the Deepwater Horizon accident” until the matter is “fully heard and decided through the judicial process.”

The Fifth Circuit has remanded the matter for further proceedings in the District Court.

BP is assessing the further implications of the Fifth Circuit’s decision and will issue an additional statement in due course



Shah Deniz Major Sales Agreements with European Gas Purchasers Concluded

Thursday, September 19th, 2013

The Shah Deniz consortium announced today that 25-year sales agreements have been concluded for just over 10 billion cubic metres a year (BCMA) of gas to be produced from the Shah Deniz field in Azerbaijan as a result of the development of Stage 2 of the Shah Deniz project. Nine companies will purchase this gas in Italy, Greece and Bulgaria.

The Shah Deniz Stage 2 project is set to bring gas directly from Azerbaijan to Europe for the first time, opening up the Southern Gas Corridor.

In total 16 BCMA of Shah Deniz Stage 2 gas will be delivered through more than 3500 kilometres of pipelines through Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and under the Adriatic Sea to Italy.

Today’s agreements for European gas sales follow the signing of agreements with BOTAS in 2011 to sell 6 BCMA of gas in Turkey.

“We are delighted that the years of negotiations led by SOCAR with multiple European companies have come to a successful conclusion. These agreements mark the biggest gas sales in the history of Azerbaijan. They also mark the beginning of direct links between Azerbaijan’s huge gas resources and the European markets. Azerbaijan is committed to long-term cooperation with the Shah Deniz gas purchasers. I am sure that this cooperation will bring benefits to consumers across Europe and will play an important role in strengthening European energy security,” said Rovnag Abdullayev, President of SOCAR.

Commenting on the agreements, Gordon Birrell, Regional President for BP in Azerbaijan, Georgia and Turkey, and President of the Operator of the Shah Deniz PSA, said: “The Shah Deniz consortium is proud to be involved in the conclusion of one of the biggest gas deals in the history of the oil and gas industry. On behalf of the Shah Deniz consortium, I would like to thank all the companies involved in these negotiations. The deep cooperation that has led to the signing of these gas sales agreements sets the foundation for many years of partnership. The strong demand for Shah Deniz gas gives us confidence in the long-term development of Azerbaijan’s gas resources. Today’s signings represent another important milestone bringing us closer to a final investment decision on the Shah Deniz 2 project”.

The buyers who have today agreed to buy the gas are: Axpo Trading AG, Bulgargaz EAD, DEPA Public Gas Corporation of Greece S.A., Enel Trade SpA, E.ON Global Commodities SE, Gas Natural Aprovisionamientos SDG SA, GDF SUEZ S.A., Hera Trading srl and Shell Energy Europe Limited. Of the total 10 BCMA, around 1 BCMA will go to buyers intending to supply to each of Bulgaria and Greece and the rest will go to buyers intending to supply Italy and adjacent market hubs.

The completion of these agreements follows expressions of interest from many different companies for Shah Deniz gas and marks the completion of the Shah Deniz 2 gas sales process.

The gas sales agreements will enter into force following the final investment decision on the Shah Deniz Stage 2 project which is targeted for late this year.



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SOCAR Works Out Schedule to Rectify Accident at Bulla-Deniz Field

Wednesday, August 21st, 2013

Under the instruction of SOCAR President, the Commission was set up to eliminate the accident followed by gas show at the exploration well #90 at Bulla-Deniz field.

The Commission members are comprised of specialists of SOCAR and the Ministry of Emergency Situations. The 1st session of the Commission was held on August 19. BP-Azerbaijan experts attended the meeting as they offered assistance. The participants heard the info on the current state at the emergency site, solutions on removing the accident, as well as proposals of BP-Azerbaijan. After the discussions, corresponding divisions of SOCAR Security Department and Ministry of Emergency Situations are going to extinguish the fire by joint efforts. The meeting was followed by preparing the preliminary program for the elimination of the accident, discussing works on eliminating the consequences of the fire, as well as giving specific tasks to the relevant organizations. Isolating works have been launched at the well under the given commands. The Commission continues its work on a daily basis.



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BP Cuts Proven Gas Reserves in the Caspian States

Monday, June 17th, 2013

BP PLC revised down its estimates for proved reserves of natural gas in countries in the former Soviet Union by almost a third as it brought the numbers in line with Western accounting standards on reserves, BP Chief Economist Christof Ruehl said Wednesday.

Russia’s gas reserves were revised down to 32.9 trillion cubic meters at the end of 2012 versus an unrevised number of 44.6 tcm at the end of 2011 in last year’s report. Turkmenistan was revised down to 17.5 tcm from 24.3 tcm, and Kazakhstan was revised to 1.3 tcm from 1.9 tcm reports Selina Williams of the Wall Street Journal.

“The former Soviet republics had a different accounting system for proven reserves and what we did was convert all their numbers to the Western accounting system in one fell swoop and that’s why there are changes,” said Mr. Ruehl.

BP defines proved reserves as those that are technically and economically recoverable. In the former Soviet republics, the concept for proved reserves is similar to what is defined as technically recoverable, Mr. Ruehl said.

In its annual statistical review, which looks back at the previous year, BP said global proved gas reserves were 187.3 tcm at the end of 2012 compared with 208.4 tcm reported in the previous year’s review.

The downward revision to the proved gas reserves of former Soviet republics leaves Iran at the top, with the largest proved gas reserves of 33.6 tcm.

Proved gas reserves in the U.S. at the end of 2012 were 8.5 tcm, around 3% lower than a revised figure for the previous year as the drop in gas prices due to the shale gas production boom made some resources uneconomic to develop. This was reflected in the big writedowns of U.S. natural gas assets made by several major oil companies over the past year.

However, the review showed that U.S. oil production experienced its largest single-year increase ever recorded, due to exploitation of unconventional hydrocarbons such as tight oil.

U.S. oil production, which includes crude, shale oil, oil sands and natural-gas-to-liquids, was 8.905 million barrels a day in 2012, the report said.

“The big phenomenon remains the American shale revolution, which led to another record-breaking year. For oil, the U.S. saw the largest increase ever. The growth in U.S. output was a major factor in keeping oil prices from rising sharply, despite a second consecutive year of large oil supply disruptions,” said BP Chief Executive Bob Dudley.



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BP to Buy Back $8 billion of Shares, Returning its 2003 Investment in TNK-BP to Shareholders

Friday, March 22nd, 2013

BP announced today that it intends to carry out a share repurchase, or buy-back, programme with a total value of up to $8 billion.

Today’s decision to buy back shares follows the completion yesterday of the sale of BP’s 50% interest in TNK-BP to Rosneft. The programme is expected to return to BP shareholders an amount equivalent to the value of the company’s original investment in TNK-BP.

In 2003 BP invested around $8 billion in cash, shares and assets in the formation of TNK-BP. Over the following decade BP received a total of $19 billion in dividends from the joint venture. BP sold its interest in TNK-BP to Rosneft, followed by a reinvestment in Rosneft shares, for an overall consideration of $12.48 billion in cash (including $0.71 billion in TNK-BP dividends received by BP in December 2012) together with shares representing 18.5% of Rosneft. As a result, BP now holds a 19.75% interest in Rosneft.

BP Group Chief Executive Bob Dudley said: “BP is moving on to the next phase of its business in Russia, becoming the largest private shareholder in Rosneft, Russia’s leading oil company. In the process we have also released cash, equivalent to at least six years of BP’s anticipated future dividends from TNK-BP. We look forward now to working closely with Rosneft and together developing opportunities to create value for both companies.”

Dudley said that the size of the proposed buy-back programme, which is expected to exceed that required to offset the earnings per share dilution expected as a result of the sale of TNK-BP, also reflected the reduction in BP’s asset base following its major $38 billion divestment programme over the past three years.

BP intends to retain the additional cash consideration of $4.48 billion received from the sale of its interest in TNK-BP to reduce BP Group debt as part of its continuing commitment to maintaining a strong balance sheet.

BP Chairman Carl-Henric Svanberg said: “We expect our stake in Rosneft will generate long-term value for BP and its shareholders. But this buy-back programme should also allow our shareholders to see benefits in the near-term from the value we have realised by reshaping our Russian business.”

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