BP to "pursue further exploration projects" in Caspian Sea

Nov 17, 1997 01:00 AM

British Petroleum is searching for more reserves in the Caspian Sea, David Pritchard, President of BP Azerbaijan told. "We find the geology of the South Caspian attractive, so our interest is to see if we can pursue further exploration projects," he said.
BP's biggest project in the region so far is the $ 8 billion Azerbaijan International Operating company (AIOC), which recently celebrated pumping its first oil. BP has a 17 % stake, leading the 11-member consortium with Norway's Statoil .
Pritchard is to become AIOC president at the start of 1998, taking over from Terry Adams.
Also in the Caspian sector claimed by Azerbaijan, BP has a stake in the Shakh Deniz acreage, with first drilling scheduled next year.
Pritchard said it was too early to predict how big the Shakh Deniz project would be. AIOC's is the largest offshore development in the Caspian, with peak output set at 800-850,000 bpd -- over four times 1996 Azeri crude production.
BP's third interest lies under north Caspian waters off the Kazakh coast. BP and Statoil jointly have a share in an international production sharing agreement. "We are hopeful this will be signed soon," Pritchard said.
BP did not take part in a recent tender held by Turkmenistan for some of its offshore blocks. "From what we've seen, Turkmenistan does not look as prospective to us," he said, adding that seismic data on Turkmen acreage was nevertheless valuable for what it told BP about Azeri geological structures.
About Iran, bordering the south Caspian he said: "There is not much information about Iran...The U.S. position there will be a stumbling block for many majors," Pritchard said.
In fifth littoral Caspian state Russia, BP has not been actively looking for oil, he added.
Pritchard said a final solution to the politically sensitive question of which country owns what under the Caspian could speed up development of oil and gas resources. "By analogy in the North Sea, the early establishment of demarcation between the U.K. and Norway gave people the confidence to do a whole lot of drilling that would not have happened if it had been unclear."
He declined to comment on the row surrounding AIOC's own acreage, made up of the Chirag, Guneshli and Azeri fields. Turkmenistan lays claim to a large part of the oil to be developed by the group, causing some jitters among its members.
Politics plays a key role in every aspect of Caspian oil, from exploration and development to transportation -- a situation that is unlikely to change. "I think politics are obviously going to continue to be important," Pritchard said.
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