Global law firm Norton Rose Fulbright has advised the ACG consortium comprising BP, Chevron, INPEX, Statoil, ExxonMobil, TP, ITOCHU and ONGC Videsh on the agreement with the Azerbaijan Government and the State Oil Company of the Republic of Azerbaijan (SOCAR), to extend the Azeri-Chirag-Deepwater Gunashli (ACG) Production Sharing Agreement (PSA) until the end of 2049. The agreement, which was signed in Baku on 14 September, is now subject to ratification by the Parliament (Milli Majlis) of the Republic of Azerbaijan.
As part of the agreement, the international co-venturers will pay a bonus of $3.6bn to the State Oil Fund of the Republic of Azerbaijan, and SOCAR will increase its equity share in the ACG PSA from 11.65 per cent to 25 per cent.
Following completion of the agreement, the new ACG participating interests will be: BP, 30.37 per cent; AzACG (SOCAR), 25.00 per cent; Chevron, 9.57 per cent; INPEX, 9.31 per cent; Statoil, 7.27 per cent; ExxonMobil, 6.79 per cent; TP. 5.73 per cent; ITOCHU, 3.65 per cent; and ONGC Videsh Limited (OVL), 2.31 per cent.
The Norton Rose Fulbright team comprised partner Geoff Peters, senior associate Hussain Kubba and associate April Lord.
Morgan Lewis partner John Hines advised SOCAR assisted by associates Alexander Marchenko and Thomas Edwards.
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About the ACG PSA:
- The existing ACG PSA was signed on 20 September 1994. Since that time around $33bn of investment has been made into the development of the ACG field.
- First oil was produced from the Chirag field on 7 November 1997. To date, the field has delivered around 3.2 billion barrels (around 440 million tonnes) of oil production, which has been exported to world markets, primarily via the Baku-Tbilisi-Ceyhan and Western Route Export pipelines.
- ACG has also delivered over 30 billion cubic metres of associated gas in total to the Government of Azerbaijan.
- In the first half of 2017, total production from ACG averaged 585,000 barrels per day.
- ACG currently has eight offshore platforms – six production platforms and two process, gas compression, water injection and utilities platforms. The platforms export oil and gas to the Sangachal Terminal, one of the world’s largest oil and gas terminals, onshore near Baku.