BP has resolved to end its participation in a shallow-water exploration project in Azerbaijan despite high initial expectations from the country’s authorities.
However, the UK supermajor remains hopeful about the prospects of two other deep-water Caspian Sea tracts.
Speaking in Baku, BP head of Caspian communications and advocacy Bakhtiyar Aslanbayli said three exploration wells drilled in the Shallow Water Absheron Peninsula (SWAP) block in 2021 and 2022 failed to hit commercial hydrocarbons.
“Authorities in Azerbaijan and the project partners have been informed accordingly”, news agency Interfax Azerbaijan quoted Aslanbayli as saying.
The asset will be relinquished once certain legal conditions are fulfilled, he added.
In September, BP reduced its exposure in SWAP by selling half of its 50% stake to Russian oil producer Lukoil, although it retained operatorship.
Azeri state-owned oil and gas producer Socar holds the remaining 50% stake in this exploration project.
The SWAP exploration area stretches along the margins of the Caspian basin to the south of the Absheron peninsula.
Water depths range up to 40 metres, with potential reservoirs at depths of between 2000 and 5000 metres.
BP had earlier identified three prospective areas in the acreage — North Khali, Bibi-Heybat East and Garabatdag — each of which have been drilled.
Socar and BP did not respond to a request from Upstream to confirm details of the asset being relinquished.
A production sharing agreement on the SWAP block was signed at the end of 2014 to reflect strong hopes from Azerbaijan that it will be able to add shallow-water hydrocarbon reserves to already discovered deep-water offshore fields.
According to Aslanbayli, BP remains upbeat on the prospects of its deep-water Shafag-Asiman block in the Azeri sector of the Caspian Sea after a first exploration well hit an accumulation of hydrocarbons at the depth of about 7000 metres.
Socar said it is working on a plan to spud a sidetrack in the completed well to penetrate the dome of the suspected reservoir.
BP and Socar are partners in this licence which occupies about 1100 square kilometres to the southeast of Baku in water depths between 650 and 800 metres.
Both partners signed an agreement on Shafag-Asiman in 2010. However, drilling started only in January 2020 and suffered the suspension of several months because of coronavirus.
Aslanbayli said the company continues preparations to spud another exploration hole on another long-term target in Azerbaijan, the D230 block.
This tract covers about 3200 square kilometres and lies about 80 kilometres from the Azeri shore in water depths ranging between 100 and 800 metres.
Both assets have also strong hopes attached to them.
BP believes D230 could host large oil reserves, while Shafag-Asiman could potentially prove comparable in scale to the company’s Shah Deniz gas field that holds largest gas reserves in Azerbaijan.
Azerbaijan’s long-term role as an oil and gas supplier to Europe has recently been given a strong boost following the visit of European Commission President Ursula von der Leyen who signed a memorandum of understanding to double the country’s gas deliveries to the continent by 2027.