The Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates signed on Friday a transaction for acquiring an equity stake in the Absheron offshore gas condensate field of Azerbaijan in the Caspian Sea.
The signing ceremony took place in Azerbaijan’s capital Baku with high-profile representatives from ADNOC, Azerbaijan’s state oil conglomerate SOCAR, and French TotalEnergies in attendance.
Upon the completion of the strategic transaction following customary regulatory approvals, ADNOC will own a 30 percent share in the Absheron field. SOCAR and TotalEnergies each sold a 15 percent interest in the field to ADNOC under the deal.
Following ADNOC’s official takeover of the participating interest, SOCAR and Total Energies will hold 35 percent each at the offshore field.
Participation in the development of the Absheron field comes as ADNOC's first investment in an upstream asset outside the United Arab Emirates.
“With global gas demand expected to steadily increase over the coming decades, ADNOC will continue to responsibly meet the world’s energy needs by developing and producing natural gas from world-class assets such as Absheron,” said Musabbeh Al Kaabi, Executive Director at ADNOC.
SOCAR President Rovshan Najaf, for his part, said this particular deal reaffirms Azerbaijan’s position as a reliable partner in the energy sector. Nicolas Terraz, President at TotalEnergies, added that ADNOC has invested in a field that offers a significant further development potential to meet the growing gas demand.
The Absheron gas and condensate field is located around 100 kilometers southeast of Baku in the Azerbaijani sector of the Caspian Sea and is operated by the Joint Operating Company of Absheron Petroleum (JOCAP).
On July 10, TotalEnergies and SOCAR announced the start of production of gas as part of the first phase of development of the field. According to the French company, the first phase enables a connection of a subsea production well to a new gas processing platform, which is plugged into SOCAR’s existing facilities in the Oil Rocks industrial settlement on the Caspian Sea.
The output capacity of the first-phase development is 4 million cubic meters of gas per day and 12,000 barrels a day of condensate, which will be sold on the domestic market in Azerbaijan.
The Absheron field was discovered by Azerbaijani geologists in the 1960s. The volume of gas reserves trapped in the field, the second-largest in the Caspian Sea after the Shah Deniz field, is estimated at 350 billion cubic meters (bcm).
The first international contract on the Absheron field was signed in 1997, however, it was terminated in 2005 due to an unproductive development strategy. In 2009, TotalEnergies and SOCAR renewed the work on the field’s development by signing a second contract. Two years later, in September 2011, the French company announced the discovery of large gas reserves in the offshore deposit.
In its top gear performance, the Absheron field is expected to churn out 1.5 bcm of gas annually.
According to the estimations of the Azerbaijani authorities, the overall proven gas reserves of the country stands at 2.6 trillion cubic meters. In addition to Shah Deniz and Absheron, other notable fields with untapped potential are the “Babak” field with estimated reserves of 400 billion cubic meters and the “Umid” field with at least 200 billion cubic meters.