The early production on the oil field Azeri/Chirag in the Caspian Sea started November 7, 1997, after the existing platform, Chirag 1, was upgraded. Azer/Chirag is expected to contain 4.6 billion barrels of extractable oil. Statoil owns 8.56%. Other participators are BP, Amoco, Delta Nimirr, Exxon, Lukoil, Itochu, Pennzoil, Ramco, TPAO, Uncoal and Socar.
The existing plans for the next phase of the field development indicate a construction of two bore and well platforms, combined with a production building, that shall have a capacity of about 300,000 barrels of oil per day. In addition, there will be a riser pipe platform built.
The field is assumed to be fully built in year 2006, with eight to ten platforms. The total production is then expected to be between 800,000 and one million barrels of oil per day.
Today the oil is transported from the fields in pipes to the oil terminal Sangachal, situated south of Aserbajdsjan's capital, Baku. From there the oil is sent through the so-called northern pipe line through Tsjetsjenia and further to the Russian city Novorossijsk on the Caspian Sea. The oil is further transported with a tanker through the Bosporus Straights to the Mediterranean Sea, to reach western markets. Part of the oil is also transported through the so-called western pipe line, from Sangachal to the port city Supsa in Georgia. This pipe line was built by Kvaerner.
Another pipe line will be built from the Caspian Sea, and there has been a fierce power struggle about which alignment route to choose. The cheapest alternative is to go through Iran, but the USA prefers, because of political reasons, that the oil be transported through Turkey. In the eastern mountain regions of Turkey, the oil companies' need for stability will affect the Kurd's fight for independence, and PKK has rattled its sabres towards Statoil and the other partners.
UpStream reports that Turkey and Aserbajdsjan have not reached agreement on the details concerning choice of alignment route through Turkey. In Dagens Naeringsliv (The Norwegian financial Daily), the 7th of September, the Director of Information in Statoil, Kai Nielsen, claims that the question of alignment route must be settled before making a decision on the next phase of development of Azeri/Chirag. He indicates that the decision will be made during the first six months of the year 2000. Originally, however, this decision was to have been made before the end of 1999, and this prestigious project is therefore not running on schedule.
Norwatch Newsletter 14/99