Investing $30 Billion in Shah Deniz Project: BP’s Commitment
Since the start of production in 2006, the giant Shah Deniz field, located in the Azerbaijani sector of the Caspian Sea, has reached significant milestones. According to BP Vice President for the Caspian Region Bakhtiyar Aslanbayli, the field has produced about 237 billion standard cubic meters of gas. In addition to this, the Shah Deniz project has also produced 49 million tons (around 394 million barrels) of condensate.
The financial investment in the Shah Deniz activities has been substantial, with BP and its co-venturers spending approximately $30 billion in capital expenditure to date. The majority of this investment was associated with the Shah Deniz 2 project. Furthermore, the State Oil Fund has earned over $7.7 billion in revenue from the Shah Deniz project by the end of 2024.
The exploration and development of the Shah Deniz field began with the signing of an agreement on June 4, 1996. The production sharing agreement (PSA) for Shah Deniz was later ratified on October 17, 1996. The field, located 70 km southeast of Baku, was discovered in 1999.
In December 2013, the term of the PSA related to the development of the Shah Deniz field was extended from 2036 to 2046 through signed documents in Baku. The distribution of shares in Shah Deniz is as follows: BP holds the operator position with 29.99%, followed by Lukoil (19.99%), TPAO (19%), NICO (10%), Southern Gas Corridor (16.02%), and MVM (5%).
With these achievements and ongoing developments, the Shah Deniz field continues to play a pivotal role in Azerbaijan’s energy sector and contributes significantly to the country’s economy.
