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Azerbaijan gets first bonus on new ACG agreement in late January

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Foreign investors on the new agreement on the “Azeri-Chirag-Gunashli” fields block in the Azerbaijani sector of the Caspian Sea will pay the first part of the bonus amount – $ 450 mln or 774 mln AZN to the State Oil Fund of the Republic of Azerbaijan (SOFAZ) on January 31. 

First part of bonus to make $ 450 mln or 774 mln AZNReport informs, says “Opinion on SOFAZ budget for 2018” by the Chamber of Accounts.

It is forecasted that bonus payments by investors on signing or implementation of oil and gas agreements will make $ 450.1 mln or 774.17 mln AZN in 2018, which is more by 774.1 mln AZN than corresponding performance indicator of 2016 in manat terms and more by 771.8 mln AZN than forecast and expected performance figures for 2017.

According to Article 29.2 of the “Agreement on the joint development and production sharing for the Azeri, Chirag fields and the Deep Water Portion of the Gunashli Field in the Azerbaijani sector of the Caspian Sea” (ACG PSA) dated September 14, 2017, payment of a total of $ 3.6 bln is planned in 2018-2025.

It was noted that within the framework of the Production Sharing Agreement (PSA) at the “Shah Deniz” field in 2018, it is forecasted that investors will make bonus payments in the amount of $ 0.1 mln or 172,000 AZN on “Shah Deniz” phase.

Notably, amended and restated agreement on joint development of the ACG and production sharing was signed on September 14, 2017. The agreement was ratified by Azerbaijani Parliament on October 31.

The participating interests of partners are as follows in the new agreement: BP – 30.37%; AzACG (SOCAR) – 25.00%; Chevron – 9.57%; Inpex – 9.31%; Statoil – 7.27%; ExxonMobil – 6.79%; TP – 5.73%; Itochu – 3.65%; and ONGC Videsh Ltd. (OVL) – 2.31%.

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