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Petroleum

Azerbaijan International Operating Company (AIOC) Achieves Significant Progress in Oil Production

Strategic Insights

— 2 min read

Azerbaijan International Operating Company (AIOC), a major oil production project in the Caspian Sea, has achieved significant progress in recent years. The project, led by BP Amoco as the operator and consortium leader, has increased oil production from 50,000 barrels per day (b/d) in mid-1998 to 115,000 b/d in 1999. The first phase of the project, which involved the Chirag field and its first platform, was completed at a cost of $1 billion. The platform, with a capacity of 115,000 b/d, began producing crude oil on November 7, 1997. The initial wells on this platform went into operation within two years, and by May 25, 1998, the fourth production well was put into operation.

Key Takeaways:

  • AIOC has increased oil production from 50,000 b/d in mid-1998 to 115,000 b/d in 1999.
  • The project has spent over $1.6 billion, including $590 million on a new export pipeline.
  • The pipeline, which runs 917 km from Baku's terminal and storage farm of Sangachal to the Georgian Black Sea port of Supsa, has a capacity of 100,000 b/d and has been on stream since April 1999.
  • The next phase of production will be ready in April 2005, with the planned final 1 million t/y pipeline to Ceyhan, Turkey's oil terminal on the Mediterranean, expected to be completed by then.
  • Production is expected to rise to over 400,000 b/d and should quickly increase to 700,000 b/d.
  • AIOC will maintain a plateau production of 800,000 b/d from late 2006 and onwards.
  • The block's crude oil is currently sold through Supsa port, while Socar's crudes are exported through an old pipeline to Russia's Black Sea port of Novorossiysk.
  • BP Amoco and Socar are yet to resolve differences over construction of a new platform for the Azeri field.
  • BP Amoco leads five PSA ventures in Azerbaijan, committed to spending up to $29 billion to find and develop up to 11.4 billion barrels of oil and over 2 trillion cubic meters (TCM) of gas.

Statistics:

  • Oil production: 50,000 b/d (mid-1998) -> 115,000 b/d (1999)
  • Pipeline length: 917 km
  • Pipeline capacity: 100,000 b/d
  • Projected production (2005): 400,000 b/d
  • Projected production (2007): 700,000 b/d
  • Total investment: over $1.6 billion
  • BP Amoco's stake: 34.14%
  • LUKoil's stake: 10.10%
  • Socar's stake: 10.00%
  • Other shareholders: 24.76%

Sources:

  • "Azerbaijan International Operating Company (AIOC) Achieves Significant Progress in Oil Production." (1999)
  • AIOC Annual Report (1999)
  • "AIOC Shareholders' Structure." (1999)
  • "BP Amoco and Socar Fail to Agree on New Platform." (1999)

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