Turan Drilling & Engineering has won a deal worth up to $700 million from BP to work on seven of the UK supermajor’s platforms in Azerbaijan’s section of the Caspian Sea, write Kama Mustafayeva and Eoin O'Cinneide.

The company, a joint venture between UK-based KCA Deutag and Azeri state player Socar, will carry out operations and maintenance work on the East Azeri, West Azeri, Central Azeri, Deepwater Guneshli, Chirag, West Chirag and Shah Deniz drilling platforms.

The firm portion of the deal is for a fixed period of five years and is worth around $500 million.

BP also has two one-year options, each worth around an additional $100 million in revenue.

BP operates two major developments in Azerbaijan — the Azeri-Chirag-Gunashli (ACG) oilfield and the Shah Deniz gas field.

Azerbaijan's government recently insisted on increasing the domestic component in energy sector services. This means that international service companies must set up a joint venture to have a better chance of getting contracts in Azerbaijan.

A Socar source told Upstream following the BP deal: “Our policy to involve more local companies and employees in exploration and development projects being implemented by international consortia and companies has started to bear fruit."

The deal represents another major contract from BP as an operator in the Caspian to a company with a local partner.

BP said in a statement the deal represents “a contribution to local capacity-building and enhancement of the local market”.

Baku-based Turan was formed in July, targeting offshore and onshore projects in the Caspian region.

Weekly

Turan seals deal with BP for Azerbaijan platform work