TBILISI/BAKU (Reuters) - BP’s (BP.L) stake in Azerbaijan’s vast oilfields is expected to shrink under a new production-sharing agreement with state energy company SOCAR, two industry sources familiar with the talks told Reuters.
Azerbaijan plans to sign a new contract with BP next week on development of the giant Azeri-Chirag-Guneshli (ACG) oilfields that will run until 2050.
The fields are the largest oilfields in the Azerbaijan sector of the Caspian basin.
An existing deal is due to expire in 2024 and a BP-led consortium and SOCAR signed a letter of intent in December to continue development of the oilfields until 2050 in a move to unlock billions of dollars of fresh investment.
“According to preliminary information, SOCAR will increase its share at the expense of a share reduction of other companies, including BP,” an industry source aware of the negotiations told Reuters.
Another industry source, who also is familiar with the talks and did not want to be identified, said SOCAR’s share could increase to 20 percent from the current 11.6 percent while BP’s share could fall to 30 percent from 35.8 percent.
“The shares of some other companies might be also reduced,” the source said. The figures in the final contract might still change, the source said.
A spokeswoman for BP in Azerbaijan said: “We don’t have information on the content of the contract now.”
A SOCAR spokesman said the company had no immediate comment.
The sources said that BP would remain the project operator, although some of its existing rights might be delegated to SOCAR.
BP came under fire from Azeri President Ilham Aliyev earlier this decade for lower than promised output.
Oil output at ACG totalled 14 million tonnes in the first half of 2017, or 585,000 barrels per day, down from 16 million tonnes a year earlier.
Additional reporting by Nailia Bagirova in Baku; writing by Margarita Antidze; editing by Jason Neely