SOCAR amended and restated agreement with the AIOC

Overview:

• The Azerbaijan government and State Oil Company of the Republic of Azerbaijan (SOCAR) has signed an amended and restated agreement with the Azerbaijan International Operating Company (AIOC) for the joint development and production sharing (PSA) of the Azeri, Chirag and deepwater portion of the Gunashli oil fields (ACG).
• As part of the renegotiated PSA, the members of the AIOC have agreed to pay a bonus of $3.6 billion to SOCAR and allow it to increase its equity stake in the ACG to 25%.
• The AIOC is a consortium of oil companies working to exploit the resources of the ACG, which lies in the Azerbaijani sector of the Caspian Sea.
• Following the signing of the amended PSA, BP remains as the major shareholder (30.37%) and operator of the company. The other shareholders are now SOCAR (25%), Chevron (9.57%), INPEX, (9.31%), Statoil (7.27%), ExxonMobil (6.79%), Türkiye Petrolleri (5.73%), the Itochu Corporation (3.65%) and ONGC Videsh (2.31%).
• To date, since the signing of the first PSA in 1994 the ACG has received more than $33 billion of investment. The extended term now allows for that figure to potentially rise to $40 billion.
• The State Oil Fund of the Republic of Azerbaijan (SOFAZ) has received more than $125 billion in project revenues to date.
• ACG project production averaged 585,000 barrels per day in H1 2017.

Jon Moore - Journalist