- BP-led Shah Deniz field to invest $2.9 billion to expand output
- Aims to boost production by 50 bcm of gas over life of project
- BP says it completed acquisition of two Caspian offshore blocks
BAKU, June 3 (Reuters) - The owners of the Shah Deniz gas field in the Azeri Caspian Sea led by BP made a final decision to invest $2.9 billion in expanding output from the project, BP said on Tuesday.
As part of its strategic shift away from renewable energy, the British oil major seeks to boost production of oil and gas, including in Azerbaijan, which has positioned itself as a reliable supplier to Europe that is seeking to cut its reliance on Russian energy.
Last year, Shah Deniz produced 28 billion standard cubic metres of gas and more than 4 million metric tons, or around 35 million barrels, of condensate, said BP, which owns around 29.9% of the project and operates it.
The other owners of the field include Russia's LUKOIL, Turkey's TPAO, Azerbaijan's SGC, NICO and Hungary's MVM.
The Shah Deniz expansion project is designed to tap low-pressure gas in the field and increase output by 50 billion cubic metres (bcm) of gas and about 25 million barrels of additional condensate over the life of the project.
After an ill-fated foray into renewables launched in 2020, BP has cut its spending, shifting investments from low-carbon projects back into oil and gas, and vowed to slash its debt through to 2027.
"These projects are fully accommodated within BP's financial frame. Shah Deniz Compression is one of the 8-10 major projects expected to start up between 2028 and 2030," BP said.
"It is expected to contribute to growing BP's global upstream production to 2.3-2.5 million barrels of oil equivalent per day by 2030, with capacity to increase further to 2035."
BP said separately on Tuesday that it had completed the acquisition of stakes in two offshore exploration and development blocks in the Azerbaijani part of the Caspian Sea.
The agreements to finalise the deal were signed by BP and Azeri state energy company SOCAR, BP said in a statement.
There was no immediate indication as to possible production volumes.
BP vice president Gordon Birrell also told journalists that the group aimed to begin oil production at Azerbaijan's Karabakh offshore field, which SOCAR says has reserves of 50-60 million tons, in 2029.
Azerbaijan's production mainly relies on mature oilfields in the Caspian Sea and the country is aiming to maintain its oil output at around 582,000 barrels per day over the next five years with investment from Western energy companies.
Azerbaijan plans to increase natural gas exports by 8 billion cubic metres by 2030, President Ilham Aliyev said on Monday. Azerbaijan exported 25 bcm of natural gas in 2024.
Exxon Mobil and Azeri state energy company SOCAR said on Monday they signed a deal agreeing to explore onshore oil and gas production in Azerbaijan.
Reporting by Nailia Bagirova; Writing by Gleb Stolyarov and Felix Light; Editing by Mark Trevelyan, David Evans and Tomasz Janowski
Source: Reuters