Newsletter No. 156
January 12, 2006

 

FIRST OIL PRODUCED AT ACG DEVELOPMENT

Since the Shingetsu Newsletter began last June we have not had occasion to mention Japan-Azerbaijan relations in any context. Now, however, a small story has appeared.

An oil field in the Caspian Sea -- in which some Japanese business interests are concerned -- has just announced its first production of oil as of December 30, 2005. The field is about 100 km east of Baku and is referred to as the Azeri-Chirag-Gunashli (ACG) development. The production sharing agreement is divided as follows:

British Petroleum -- 34.1% (Operator)
Unocal -- 10.3%
Inpex -- 10%
Socar -- 10%
Statoil -- 8.6%
Exxonmobil -- 8%
Tpao -- 6.8%
Devon -- 5.6%
Itochu -- 3.9%
Amerada Hess -- 2.7%

Inpex and Itochu are, of course, both Japanese companies, holding a combined 13.9% interest in the ACG field.

The West Azeri platform of the ACG development, which is the one that just started production, is expected to eventually produce about 300,000 barrels per day. Commented David Woodward of BP: “The start up of West Azeri is as important as our achievement of our first oil from Central Azeri last year. It marks the culmination of our efforts to consistently meet our target of delivering a platform a year between now and 2008. The start up of WA will contribute to the rapidly increasing volumes of oil from ACG flowing into BTC once it becomes fully operational in spring this year. I am proud to say that we have delivered WA oil four months ahead of schedule and this is thanks to our ACG project and operations teams’ excellent performance building on a track record of planning, construction and operations delivery in the Caspian Sea. On this important day for Azerbaijan, BP and our ACG partners, I would like to recognize the hard work of more than ten thousand people, mostly from Azerbaijan, who have consistently delivered outstanding performance on this project over the past three years. I would also like to congratulate the government, our partners, employees, all the contractors and suppliers and everyone involved, on this tremendous achievement.”

In regard to political relations between Tokyo and Baku, diplomatic relations were opened on September 7, 1992. Azerbaijan exports caviar, aluminum, and wool to Japan, while steel pipes and machinery go the other way. Tokyo also provides some financial aid to the country.

The highest-level Japanese state visit to Azerbaijan was that of Foreign Minister Masahiko Komura in May 1999. The previous February, Azeri President Heydar Aliyev had come to Japan and had met the Emperor and then-Prime Minister Ryutaro Hashimoto.

The only recent major visit was that of Senior Vice-Foreign Minister Ichiro Aisawa to Baku exactly a year ago.