* BP to invest $3.2 bln in ACG project
* Also to invest $1.55 bln in Shah Deniz
* Money to be spent on drilling more wells
By Lada Yevgrashina
BAKU, March 1 (Reuters) - BP Plc plans to step up investments in its oil and gas projects in Azerbaijan in 2012, drilling more wells and developing production at existing fields, the company's regional office said on Thursday.
The BP-Azerbaijan AIOC group said in a statement it plans to invest $3.2 billion in the Chirag, Azeri and Guneshli (ACG) oilfields in the Caspian Sea in 2012, up from $2.6 billion in 2011.
Investments in the major Shah Deniz gas field, which BP runs together with Statoil and Azeri state oil firm SOCAR, will come in at $1.55 billion this year compared to $870 million the year before.
BP said operation expenses for the ACG project, with estimated recoverable reserves of about 1 billion tonnes of oil, would reach $708 million in 2012, while $2.52 billion would be channeled to drilling at least 12 new wells.
It said 35.4 million tonnes of oil was produced at the ACG fields in 2011, down from 40.6 million tonnes produced in 2010, as some drilling platforms were closer for repair works.
SOCAR expects ACG 2012 oil output to be 37 million tonnes. BP has not provided a forecast for production at ACG fields, estimated to contain about 1 billion tonnes of oil.
Operation expenses on the Shah Deniz project in 2012 are estimated at $211.5 million, while capital expenditure of $1.34 billion will be mainly used for drilling two new wells and preparation works for the second phase of the project.
BP said 6.67 billion cubic metres (bcm) of gas and 1.8 million tonnes of condensate was produced at Shah Deniz in 2011, down from 6.9 bcm and 1.9 million tonnes in 2010 respectively.
The second phase of production at Shah Deniz and shipment of gas to Europe may require investments of $40 billion, a source at SOCAR told Reuters on Thursday.
Total oil and condensate production in Azerbaijan in the first month of 2012 declined to 3.9 million tonnes from 4.1 million tonnes in January 2011. Natural gas output fell 20 percent to 1.6 bcm from 2.0 bcm.
The former Soviet republic ships its oil via five main routes: Russia's largest Black Sea port of Novorossiisk, neighbouring Georgia's Supsa, Batumi and Kulevi ports, and Turkey's Ceyhan.
Azerbaijan sells gas to the domestic market and to Georgia and Turkey via the Baku-Tbilisi-Erzurum pipeline, as well as to Russia.
In 2012, the country expects to produce 45.45 million tonnes of oil and 28.28 bcm of gas in 2012. (Writing by Margarita Antidze in Tbilisi; Editing by Andrey Ostroukh and Jon Loades-Carter)