INPEX Announces US$6 Billion Development Plan for Chirag Oil Project in the Caspian Sea, Azerbaijan

Wednesday, Mar 10, 2010

INPEX CORPORATION (INPEX) is pleased to announce that the Steering Committee for the development of the Azeri, Chirag and deepwater portion of the Gunashli (ACG) fields sanctioned investment in the new Chirag Oil Project (COP). The $6 billion development plan is the next step in the ongoing development of the ACG field in the Azerbaijan sector of the Caspian Sea.

The project is planned to increase oil production and recovery from the ACG field through a new offshore facility between the existing Deepwater Gunashli (DWG) and Chirag-1 platforms. First oil from the Chirag Oil Project, the latest stage in ACG’s development stretching back more than 15 years, is expected in late 2013, and the COP development will allow recovery of an additional 360 million barrels of oil in total.

ACG Project

ACG participating interests are: BP (operator – 34.1%), Chevron (10.3%), SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), ITOCHU (3.9%), Hess (2.7%).

The ACG Production Sharing Agreement (PSA), signed in September 1994, covers the 30 year development of the Azeri-Chirag-Gunashli contract area. The AIOC was established by international oil companies from six countries, which together with SOCAR, are shareholders in this major field development.

From the start, the activity level in AIOC has been exceptionally high. The field has been developed in several phases: Chirag has been producing since 1997 as part of the Early Oil Project (EOP). This was followed by Azeri Project Phase 1 - Central Azeri production in early 2005. Successive Phase 2 included West Azeri, which started production in January 2006, East Azeri started production in October 2006 and Phase 3 - Deepwater Gunashli started up in April 2008. The next step of development of ACG is the Chirag Oil Project which is currently at the execute stage with first oil expected in 2013.

Source: INPEX