British multinational oil and gas company bp has agreed to sell a 25 per cent participating interest in the Shallow Water Absheron Peninsula (SWAP) exploration project in the Azerbaijan sector of the Caspian Sea to Russian multinational energy corporation LUKOIL.
Following completion of the sale, bp will remain operator of the SWAP production sharing agreement (PSA) during the exploration period, holding a 25 per cent interest. On completion, participating interests in the PSA will be SOCAR Oil Affiliate (50 per cent), bp (25 per cent) and LUKOIL (25 per cent).
Subject to approval from the government of Azerbaijan, the deal, with an effective date of 1 July 2021, is expected to complete in the fourth quarter of 2021.
“We are pleased to welcome LUKOIL to the SWAP partnership, building on our successful relationship in the Shah Deniz project,” said Gary Jones, bp’s regional president for Azerbaijan, Georgia and Turkey. “We look forward to working closely with them and SOCAR on the exploration work programme, which, if successful, will deliver value to Azerbaijan and to our partnership.”
“LUKOIL’s joining of the project of bp and SOCAR falls in line with both Russia’s and Azerbaijan’s national interests related to the evolvement of international cooperation in the energy domain,” added Vagit Alekperov, LUKOIL President. “I am convinced that all the scientific and technical resources gathered by the partners will boost the development of the prospective area in the shallow waters of the Absheron Peninsula.”
The SWAP PSA was signed between bp and SOCAR in December 2014 and ratified by the parliament of Azerbaijan in 2015. The first exploration well in the North Khali prospective area was spudded on 16 August 2021 and the drilling is expected to be completed in the fourth quarter of 2021. The well is planned to reach a total depth of up to 2,424 metres. The well data will then be analysed and, if successful, an evaluation programme may be conducted to confirm the results.