BP faces Shah Deniz 'budget hike'

Going higher: at Shah Deniz in Caspian Sea

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By Steve Marshall and news reports

 02 January 2013 10:49 GMT

BP and its partners in the Shah Deniz project are reportedly facing a cost increase of as much as $5 billion to develop the second phase of the Caspian Sea gas field off Azerbaijan.

Phase two of the scheme is now estimated to cost between $28 billion and $30 billion, compared with the original budget of $25 billion, president of state oil company Socar, Rovnaq Abdullayev, was quoted as saying by Bloomberg.

A final investment decision on the second phase of Shah Deniz is due to be made at the end of this year by the BP-led operating consortium comprising heavyweights Lukoil, Total and Statoil, as well as Socar, Turkiye Petrolleri and Naftiran Intertrade.

The partners have already approved spending of $6 billion on construction of platforms and infrastructure next year, according to the Socar chief.

Shah…

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