SOCAR (the State Oil Company of the Republic of Azerbaijan) and AIOC (the Azerbaijan International Operating Company) signed a letter of intent (LoI) for the future development of the Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea.

The agreement will cover the development of the field until 2050 and will add significant resource development potential to the middle of the century. Today ACG produces circa 620,000 barrels of oil equivalent.

The shareholders in AIOC are xxxxxxBP, Chevron, INPEX, Statoil, ExxonMobil, TPAO, ITOCHU and ONGC Videsh.

The LoI was signed in Baku today by Rovnag Abdullayev, President of SOCAR, on behalf of the Republic of Azerbaijan, and by Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, on behalf of the AIOC partnership.

The LoI agrees the key commercial terms for the future development of the ACG field and enables the parties to conclude negotiations and finalise fully-termed agreements in the next few months.

Rovnag Abdullayev commented: “We have been in negotiations with ACG’s foreign partners for some time. We will complete fully-termed agreements in the near future. ACG is known as the “Contract of the Century”. It is very important to Azerbaijan - it is the symbol of our oil industry. It has opened up a whole new era for the country’s development. The Letter of Intent we signed today with ACG’s foreign partners signifies that we can now look ahead to many more years of ACG’s success.”

Bob Dudley, BP CEO, said: “This is an important day for Azerbaijan, SOCAR and the AIOC partnership. It opens up an exciting opportunity to the middle of the century for us to continue this extraordinary partnership. In 1994 we set out to develop ACG in the new phase of the country’s energy journey. BP is very proud to be a part of this long-term partnership and looks forward to continuing it for many decades to come.”

Gordon Birrell added: “As operator of ACG we are pleased to have the opportunity to continue to lead this world-class field development safely and efficiently. Today’s signing allows us to look ahead to the next chapter in ACG’s success and indeed in Azerbaijan’s energy story. We believe together we will be able to build on this success by continuing to combine the country’s potential and experience with leading technology.

“This agreement will enable future investments and projects, and will bring many thousands of jobs in the years ahead.”

About Azeri-Chirag-Gunashli (ACG)

ACG is a super-giant field located about 100 km east of Baku. It is the biggest producing oil field in the Caspian Sea and covers an area of more than 432 square kilometres. It lies in water depths of between 120 and 170 metres. The depth of the reservoir is 2,000-3,500 metres.

The existing ACG PSA was signed in September 1994 for 30 years. Oil production from the field began in November 1997. To date the field has produced more than 3 billion barrels of oil with around $33 billion of investment.

There are six producing platforms on ACG, linked with a world-class onshore terminal in Sangachal near Baku. From the terminal ACG oil is exported to world markets primarily by the Baku-Tbilisi-Ceyhan oil export pipeline and the Western Route Export Pipeline to Supsa.

BP is the operator acting on behalf of AIOC and the Contractor Parties to the ACG Production Sharing Agreement.

About BP

BP (NYSE:BP) is one of the world's largest oil and gas companies, serving millions of customers every day in more than 80 countries, and employing nearly 85,000 people. BP's business segments are oil and gas exploration & production, and refining & marketing. In alternative energies, BP has low- and no-carbon wind and biofuels businesses. Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbons basins and strong market positions in key economies.

About Socar

SOCAR is an integrated state oil & gas company of Republic of Azerbaijan and is involved in upstream, midstream and downstream operations encompassing exploration of oil and gas fields, production, processing and transporting oil, gas and condensate, marketing of petroleum and petrochemical products in domestic and international markets and supplying natural gas to domestic and industrial customers in Azerbaijan. SOCAR has its trading companies in Switzerland, Singapore and UAE and representative offices in a number of other countries.