BP's Azerbaijan Find Could Double Output

Oil giant BP on Wednesday announced a major gas-condensate discovery in the Shah Deniz field in the Caspian Sea. Field partner StatoilHydro said the new field could lead to a more than doubling of present production of 8.6 billion cubic meters a year. The SDX-04 appraisal and exploration well is located about 70 kilometres south east of Baku in water 50-600 metres deep. The Azeri government said the field holds around 1.2-1.3 trillion cubic metres of gas, but BP says appraisal is required to fully delineate the new structure. Results confirm sufficient gas at Shah Deniz for a second stage of development, although further work is required to define this second phase. The gas find could boost BP's efforts to turn around its performance after a 45% fall in Q3 profits. BP has the largest foreign presence in ex-Soviet Azerbaijan, and operates the Shakh Deniz field with a 25.5% stake. Other shareholders include Norway's StatoilHydro with 25.5%, State Oil Company of Azerbaijan Republic [SOCAR], LUKOIL and Total each with 10%. BP, Statoil and other partners plan to spend $4.2 billion on the site's first stage, which started pumping fuel to Turkey in July, easing Europe's dependence on supplies from Russia's Gazprom.

Sources: Press release, MarketWatch, Reuters, Bloomberg
Commentary: Could BP Mean Big Potential? • Oil Majors Quietly Investing In Renewable Fuel Sector
Stocks to watch: BP, STO, LUKOY.PK, TOT. Competitors: RDS, CVX, XOM, BHP
ETFs: ADRD, ADRU, DGT, NYC

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