ACG sanctions $6 billion Azeri Central East development project

The Steering Committee for the development of the Azeri and Chirag fields and the Deep Water portion of the Gunashli (ACG) field (including SOCAR, BP, Chevron, INPEX, Equinor, ExxonMobil, TPAO, ITOCHU and ONGC Videsh) has announced the sanctioning of the Azeri Central East (ACE) project, the next stage of development of the giant ACG field in the Azerbaijan sector of the Caspian Sea, Olaylar reports citing BP.

The $6 billion development includes a new offshore platform and facilities designed to process up to 100,000 barrels of oil per day. The project is expected to achieve first production in 2023 and produce up to 300 million barrels over its lifetime.

The sanction is the first major investment decision by the ACG partnership since the extension of the ACG production sharing agreement (PSA) to 2049 was agreed in 2017. More than $36 billion has been invested into the development of the ACG area since the original PSA was signed in 1994.

Construction activities, which will commence this year and run through mid-2022, will take place in-country utilizing local resources. It is expected that, at peak, construction activities will create up to 8,000 jobs.

Rovnaq Abdullayev, president of SOCAR, said that today's sanctioning marks yet another important milestone in the development of ACG for the benefit of the nation, which began 25 years ago with the signing of the Contract of the Century.

"For decades, SOCAR has been reinvesting Azerbaijan's oil revenues in the development of a highly qualified workforce and modern industrial facilities in our country. Today we have world-class factories, production and installation complexes, marine vessels and highly-skilled local workforce, which have created opportunity for construction and installation of ACE platform by the Azerbaijani specialists throughout the country. Looking forward, we expect more than 3 billion barrels of additional oil production from ACG. This strategic decision supports Azerbaijan's increasing role as an energy supplier for the regional and global markets," he added.