Azeri–Chirag–Gunashli (ACG, ) or Azeri–Chirag–Deepwater Gunashli is a complex of

oil field A petroleum reservoir or oil and gas reservoir is a subsurface accumulation of hydrocarbons contained in porous or fractured rock formations. Such reservoirs form when kerogen (ancient plant matter) is created in surrounding rock by the prese ...

s in the

Caspian Sea The Caspian Sea is the world's largest inland body of water, described as the List of lakes by area, world's largest lake and usually referred to as a full-fledged sea. An endorheic basin, it lies between Europe and Asia: east of the Caucasus, ...

, about off the coast of

Azerbaijan Azerbaijan, officially the Republic of Azerbaijan, is a Boundaries between the continents, transcontinental and landlocked country at the boundary of West Asia and Eastern Europe. It is a part of the South Caucasus region and is bounded by ...

. It consists of the Azeri and Chirag oil fields, and the deepwater portion of the Gunashli oil field. An overall estimate of the area of the development is .''SOCAR website'' Azeri–Chirag–Guneshli
It is developed by the

Azerbaijan International Operating Company Azerbaijan International Operating Company is a consortium formed to implement the terms of the “Agreement on the Joint Development and Production Sharing for the Azeri–Chirag–Gunashli, Azeri and Azeri–Chirag–Gunashli, Chirag Fields and th ...

, a consortium of international oil companies, and operated by BP on behalf of the consortium. The ACG fields have estimated recoverable reserves of about of

petroleum Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...

. Peak oil production of was reached in 2010. However by the first quarter of 2024, production had fallen to , or approximately one-third of peak value, as the production rates moved towards terminal decline. As of 2021, ACG oil accounted for 95% of all Azerbaijani oil exports. BP reports that

crude oil Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring u ...

from ACG is exported through the

Baku–Tbilisi–Ceyhan pipeline The Baku–Tbilisi–Ceyhan (BTC) pipeline is a long crude oil pipeline from the Azeri–Chirag–Gunashli oil field in the Caspian Sea to the Mediterranean Sea. It connects Baku, the capital of Azerbaijan and Ceyhan, a port on the south-easte ...

to the

Mediterranean Sea The Mediterranean Sea ( ) is a sea connected to the Atlantic Ocean, surrounded by the Mediterranean basin and almost completely enclosed by land: on the east by the Levant in West Asia, on the north by Anatolia in West Asia and Southern Eur ...

and the Baku-Supsa Pipeline to Supsa in

Georgia Georgia most commonly refers to: * Georgia (country), a country in the South Caucasus * Georgia (U.S. state), a state in the southeastern United States Georgia may also refer to: People and fictional characters * Georgia (name), a list of pe ...

, as well as through the Baku-Novorossiysk Pipeline to

Novorossiysk Novorossiysk (, ; ) is a city in Krasnodar Krai, Russia. It is one of the largest ports on the Black Sea. It is one of the few cities designated by the Soviet Union as a Hero City. The population was History In antiquity, the shores of the ...

Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...

. It is believed that there may also be untapped natural gas reserves under the ACG oilfields. Media reports indicate that according to American Consulting Association IHS CERA (Cambridge Energy Research Associates), the Azeri–Chirag–Gunashli is the third-largest oil-field development out of 20 listed. Total investment was estimated at US$20 billion as of 2009. As of 2008 reports, oil from the ACG fields accounted for approximately 80% of Azerbaijan's total oil production (exports and domestic consumption) and was expected to bring Azerbaijan potentially $80 billion in profits.

History

Exploitation of the Azeri–Chirag–Gunashli development started at the beginning of 1990s. In January 1991, the Azerbaijani government announced separate international tenders of exploration rights for Azeri, Chirag, and Gunashli fields. In June 1991, a consortium of

Amoco Amoco ( ) is a brand of filling station, fuel stations operating in the United States and owned by British conglomerate BP since 1998. The Amoco Corporation was an American chemical and petroleum, oil company, founded by Standard Oil Company i ...

, Unocal,

British Petroleum BP p.l.c. (formerly The British Petroleum Company p.l.c. and BP Amoco p.l.c.; stylised in all lowercase) is a British multinational oil and gas company headquartered in London, England. It is one of the oil and gas " supermajors" and one of ...

Statoil Equinor ASA (formerly Statoil and StatoilHydro) is a Norwegian multinational energy company headquartered in Stavanger, Norway. It is primarily a petroleum company operating in 36 countries with additional investments in renewable energy. In th ...

McDermott McDermott or MacDermott is an Irish surname and the anglicised version of Mac Diarmada (also spelled Mac Diarmata), the surname of the ruling dynasty of Moylurg, a kingdom that existed in Connacht from the 10th to 16th centuries. The last ruling ...

, and Ramco was formed for a development of Azeri field. Azerbaijan was represented in the consortium by SOCAR. Negotiations were expanded to include all three fields. After

Heydar Aliyev Heydar Alirza oghlu Aliyev (10 May 1923 – 12 December 2003) was an Azerbaijani politician who was a Soviet party boss in the Azerbaijan Soviet Socialist Republic from 1969 to 1982, and the third president of Azerbaijan from October 1993 to ...

became President of Azerbaijan in 1993, talks with foreign companies were stopped and Lukoil was invited to the consortium. Negotiations resumed in 1994. The

production sharing agreement Production sharing agreements (PSAs) or production sharing contracts (PSCs) are a common type of contract signed between a government and a resource extraction company (or group of companies) concerning how much of the resource (usually oil) extra ...

(PSA) was signed by the parties on 20 September 1994 for development of the fields for 30 years. The day of the signing of PSA agreement is celebrated as ''The Day of Oilworkers'' in Azerbaijan. At the first stage, the consortium started development drilling of the Chirag field in August 1997. First oil was produced in November 1997. This development stage was also known as ''the Early Oil Project (EOP)''. Originally, produced oil was exported through the

Baku–Novorossiysk pipeline The Baku–Novorossiysk pipeline (also known as the Northern Route Export Pipeline and Northern Early Oil Pipeline) is an long oil pipeline, which runs from the Sangachal Terminal near Baku to the Novorossiysk terminal at the Black Sea coast in ...

. A contract on the oil transportation via Russia to the

Black Sea The Black Sea is a marginal sea, marginal Mediterranean sea (oceanography), mediterranean sea lying between Europe and Asia, east of the Balkans, south of the East European Plain, west of the Caucasus, and north of Anatolia. It is bound ...

port of

was signed on 18 February 1996. The oil transportation through the pipeline started on 25 October 1997. For the diversification of the export routes, construction of the Baku–Supsa Pipeline was agreed in 1996. The pipeline became operational in 1998 and was officially inaugurated in 1999. At the Chirag field, the water injection project was implemented in 1999 and the drilling technology was upgraded in 2000. The second stage of the development consisted of the development of the Azeri field. The development of Azeri field started in 2002. Central Azeri living quarters arrived in

Baku Baku (, ; ) is the Capital city, capital and List of cities in Azerbaijan, largest city of Azerbaijan, as well as the largest city on the Caspian Sea and in the Caucasus region. Baku is below sea level, which makes it the List of capital ci ...

in July 2003 and drilling modules arrived in Baku in July 2003. The Central Azeri jacket was completed in March 2004. To accommodate addition oil, the Sangachal Terminal was upgraded in March 2003. After installing the Central Azeri gas pipeline, the Central Azeri platform was launched in July 2004. The platform was installed by October 2004, and production started in February 2005. The Central Azeri compression and water injection platform topsides was launched in July 2005. It injected first gas in May 2006 The West Azeri drilling modules arrived in Baku in August 2004 and the platform launched in May 2005. The platform's topsides was installed in September 2005 and production started in January 2006. East Azeri drilling modules and quarters arrived in Baku in June 2005 and the platform was launched in March 2006. The topside was installed in March 2006 and the production began in October 2006. The Deepwater Gunashli pre-drilling program started in December 2005. Drilling modules and quarters arrived in Baku in June 2006. The platform became operational in April 2008. On September 14, 2017, The Azerbaijan Government and the State Oil Company of the Republic of Azerbaijan (SOCAR), together with BP, Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU and ONGC Videsh have signed an agreement to extend the PSA for ACG fields until 2049. On April 19, 2019, SOCAR president Rovnag Abdullayev and BP’s regional president for Azerbaijan,

, and

Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...

, Garry Johns signed a contract cost $6 billion. The final investment decision on the Azeri Central East (ACE) platform, which is planned to be built on the Azeri–Chirag–Gunashli (ACG) block, has been adopted at the signing ceremony. The construction is scheduled to start in 2019, and the completion is scheduled for mid-2022. In the first quarter of 2024 production was , approximately one-third of peak value.

Ownership

The founding consortium formed to develop the Azeri–Chirag–Gunashli project initially included BP,

, Unocal,

, Turkish Petroleum, and Ramco Energy. Lukoil sold its share in the project in 2003 to Inpex for $1.354 billion. On 23 November 2009, Devon Energy announced it would sell its share in ACG. On 29 March 2013, Hess sold its stake to ONGC for $1 billion. In April 2020, Chevron sold all of its interest in Azeri–Chirag–Gunashli, including interests in the Western Export Route Pipeline and the Baku-Tbilisi-Ceyhan oil pipeline, to MOL Hungarian Oil and Gas PLC. In 2018, and again in May 2020,

ExxonMobil Exxon Mobil Corporation ( ) is an American multinational List of oil exploration and production companies, oil and gas corporation headquartered in Spring, Texas, a suburb of Houston. Founded as the Successors of Standard Oil, largest direct s ...

unsuccessfully put its stake in Azeri–Chirag–Gunashli up for sale. In 2023, Norway's

Equinor Equinor ASA (formerly Statoil and StatoilHydro) is a Norwegian multinational energy company headquartered in Stavanger, Norway. It is primarily a petroleum company, petroleum company operating in 36 countries with additional investments in renew ...

divested all of its assets in Azerbaijan, including its stakes in the Azeri–Chirag–Gunashli development and the Baku-Tbilisi-Ceyhan oil pipeline. Equinor reported a loss from the transaction in the range of $300 million to $400 million, recorded in 2024. Of Equinor's original 7.27% interest in ACG, 6.655% reverted to SOCAR, the State Oil Company of the Republic of Azerbaijan, and 0.615% to ONGCVidesh. As of the first quarter of 2024, the remaining participating shareholders of the Azeri–Chirag–Gunashli development were BP with a 30.37% stake, SOCAR (31.66%), MOL (9.57%), INPEX (9.31%),

(6.79%), TPAO (5.73%),

Itochu is a Japanese corporation based in Umeda, Kita-ku, Osaka and Aoyama, Minato, Tokyo, Aoyama, Minato, Tokyo. It is one of the largest Japanese ''sogo shosha'' (general trading and investment companies) distinguished by the strength of its textil ...

(3.65%) and ONGCVidesh (2.93%). BP also leads the AIOC consortium. Under a 2017 agreement to extend the production sharing to 2049, the interest of SOCAR, the Azeri state energy company, increased to 25% while the interests of the other shareholders were reduced.

Production

With 3 stages completed and 7 operational platforms functional, total production from Azeri–Chirag–Gunashli was more than a day in 2009. During the first three quarters of 2009, over of oil were produced from the Chirag, Central Azeri, West Azeri, East Azeri and Deep Water Gunashli platforms. As per BP's report, Chirag had 19 wells in operation (13 of which are oil producers and 6 - water injectors) with an overall production of . Central Azeri (CA) had 18 wells (13 of which are oil producers and 5 - gas injectors) with production of . West Azeri (WA) had 18 wells in operation (14 of which are oil producers and 4 - water injectors with production of . East Azeri (EA) had 13 wells in operation (9 of which are oil producers and 4 - water injectors) with an overall production for the first three quarters of 2009. Deep Water Gunashli (DWG) had 17 wells (9 oil producers and 8 water injectors) in operation with production of of oil. Oil depletion rates of each of the Azeri–Chirag–Gunashli reservoirs are expected to differ over time, with aggregate output from the complex declining substantially after 2018. Azerbaijan also gets approximately of casing head gas per day extracted from ACG block. The gas is supplied by BP free of charge. Azerbaijan received over 1 billion cubic meters of gas from these fields in the 1st quarter of 2009. Current recovery comes to nearly 27 million cubic meters of casing head gas a day. A portion of gas is routed to national gas transportation system of Azerbaijan. Some is used as source of fuel at the platforms. Casing head gas from platforms in central, western and eastern parts of Azeri field is supplied to Sangachal Terminal via 28 inch subsea gas pipeline to distributive system of Azerigaz CJSC to use on the local market. A portion of casing head gas extracted at Chirag platform is directed to SOCAR's compressor station (the State Oil Company of Azerbaijan) to Oil Rocks field via 16 inch subsea gas pipeline. The rest of the gas from Azeri–Chirag–Guneshli platforms are pumped through intra field subsea gas pipeline to a platform for repeated pumping in a layer to support layer pressure. As of September 2009, 164.2 million tonnes of oil and 37 billion cubic meters of associated gas have been produced and 80.3 million cubic meters of water and 13 billion cubic meters of gas have been injected into layers since the beginning of production in ACG fields in 1997. The total production rate of the ACG complex as of the first quarter of 2024 was , having substantially declined from the peak output in 2010 of . In 2024, the State Oil Fund of Republic of Azerbaijan (SOFAZ) revenue was US$ 5,725 billion from the sale of oil from the Azeri-Chirag-Gunashli (ACG) field.

Routes of transportation

The oil from the ACG complex was pumped to Sangachal terminal south of Baku and from there routed to foreign markets by Baku-Supsa pipeline,

and

.An interactive map
shows all current export routes.

References

External links

Production Sharing Agreement for the Azeri-Chirag-Guneshli fieldImage showing ACG fields
{{DEFAULTSORT:Azeri-Chirag-Guneshli BP oil and gas fields Oil fields of Azerbaijan Oil fields of the Soviet Union Caspian Sea