Shah Deniz

The Shah Deniz (SD) field was discovered in 1999. It is one of the world’s largest gas-condensate fields. It is located on the deep water shelf of the Caspian Sea, 70 km south-east of Baku, in water depths ranging from 50 to 500 m.

bp operates Shah Deniz on behalf of its partners in the Shah Deniz Production Sharing Agreement (PSA).

Shah Deniz is structured as an unincorporated Joint Venture (JV) partnership. bp is the operator of the Shah Deniz JV. Shah Deniz Stage 1 began operations in 2006. It has the capacity to produce around 10 billion cubic meters of gas per annum (bcma) and approximately 50,000 barrels a day of condensate.

Despite the complexities of drilling the wells, building a platform, constructing an onshore terminal and laying a 700 km South Caucasus pipeline (SCP) through Azerbaijan and Georgia to the Turkish border, Shah Deniz Stage 1 was developed in only seven years. Since Shah Deniz has proved a secure and reliable supplier of gas to Azerbaijan, Georgia and Turkey.

During 2014, the existing Shah Deniz facilities were further de-bottlenecked which increased their production capacity from 27.3 million standard cubic metres to 29.5 million standard cubic metres of gas per day.

In 2018, Shah Deniz celebrated 100 billion cubic metres of total gas production from the field since the start of operations. The milestone was achieved at the end of December, exactly 12 years after the first announcement of the start-up of commercial gas production from the field and start-up of operations of the South Caucasus Pipeline.

In 2021, Shah Deniz celebrated the 25th anniversary since the signing of the Shah Deniz Production Sharing Agreement (PSA). The PSA was signed on 4 June 1996 between SOCAR and a consortium of foreign companies. It was ratified by the Milli Majlis and became effective on 17 October the same year. 

In the first three quarters of 2024, bp and its co-venturers spent around $1,780 million in operating expenditure and around $582 million in capital expenditure on Shah Deniz activities, the majority of which was associated with the Shah Deniz 2 project.

During the third quarter, the Shah Deniz field continued to provide gas to markets in Azerbaijan (to Azerkontrakt), Georgia (to GOGC), Türkiye (to BOTAS), BTC in multiple locations and to buyers in Europe.

In the first nine months of the year, the field produced 20 billion standard cubic metres of gas and more than 3 million tonnes (around 26 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.

The existing Shah Deniz facilities’ production capacity is currently about 80.7 million standard cubic metres of gas per day or approximately 29.5 billion standard cubic metres per year.

Exploration

In the first three quarters of 2024, we continued to analyse the data obtained in 2023 from the target reservoirs of an exploration well (SDX-8) in the Shah Deniz contract area, with the aim to appraise the deeper reservoirs beneath the currently producing Shah Deniz layers.