On 28 September 2021, Lukoil signed an agreement on acquiring a 25% participating interest in the Shallow Water Absheron Peninsula (SWAP) exploration project in the Azerbaijan sector of the Caspian Sea from bp. The deal is expected to complete before the end of 2021, following its approval by the government of Azerbaijan.
After the completion of the sale, bp will remain operator of the project, holding a 25% interest. The third party to the project is SOCAR, the State Oil Company of the Azerbaijan Republic, with a 50% share.
“Lukoil’s joining of the project of bp and SOCAR falls in line with both Russia’s and Azerbaijan’s national interests related to the evolvement of international cooperation in energy domain. I am convinced that all the scientific and technical resources gathered by the partners will boost development of the prospective area in the shallow waters of the Absheron Peninsula,” said Vagit Alekperov, Lukoil President.
“We are pleased to welcome Lukoil to the SWAP partnership, building on our successful relationship in the Shah Deniz project. We look forward to working closely with them and SOCAR on the exploration work program, which, if successful, will deliver value to Azerbaijan and to our partnership,” said Gary Jones, bp’s regional president for Azerbaijan, Georgia and Turkey.
The SWAP project area is located in the shallow waters south of the Absheron Peninsula in the Azerbaijan sector of the Caspian Sea.
bp signed a new production sharing agreement (PSA) with SOCAR in December 2014 to jointly explore for and develop potential prospects in the shallow water area around the Absheron peninsula in the Azerbaijan sector of the Caspian Sea. This PSA was ratified by the Milli Majlis (Parliament of Azerbaijan) on 14 April 2015.
The PSA contract area stretches along the margins of the Caspian basin to the south of the Absheron peninsula. The acreage features water depths of up to 40 metres with potential reservoir depths of 3000-5000 metres.
In 2016, a 3D seismic acquisition program was conducted in the area, which resulted in defining three prospective areas – North Khali, Bibi-Heybat East and Garabatdag. The areas feature water depths of up to 40 metres.
The Environmental and Socio-economic Impact Assessment (ESIA) for the first SWAP well was disclosed in August 2020 and following public discussions was approved by the government in January 2021.
The first exploration well in the North Khali prospective area was spudded in August 2021.