BP Makes Major Gas Discovery in Caspian Sea

Shares of BP were last up more than 2% in London, in reaction to the company's announcement of a "major gas discovery" in the SDX-04 appraisal and exploration of the Shah Deniz field in the Caspian Sea. BP said although further work is necessary to define the discovery, it will likely be similar or larger in size than stage 1 (8.6 billion cubic meters/year). "The SDX-04 well is a major achievement and it justifies our plans for the next stage of development of the field. I am proud to say that the results of the well prove that it was worth making the effort to complete and test the deepest well ever drilled in the Caspian as we met both the appraisal and exploration objectives set for it," commented Bill Schrader, President of BP Azerbaijan. An S&P equity analyst called the news "very positive" and said the gas could eventually be exported to Europe. BP and StatoilHydro own 25.5% stakes of the Shah Deniz production-sharing agreement, while Total SA of Paris, NICO of Iran, Lukoil of Russia and the State Oil Co. of Azerbaijan each own 10% stakes and Turkish Petroleum Overseas Co. owns a 9% stake. BP's ADRs gained 2.1% to $73.65 on Tuesday and were slightly higher at $73.89 in thin pre-market trading.

Sources: Press release, Bloomberg, MarketWatch
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Earnings call transcript: BP Q3 2007

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