BP drops Azeri project after failed three-well exploration campaign

BP is ending its participation in the Shallow Water Absheron Peninsula (SWAP) exploration project off the coast of Azerbaijan, after drilling three wells that failed to find commercial hydrocarbons, a local representative for the company said at a briefing earlier this month.

"Our contractual obligations under the SWAP project included seismic and the drilling of three exploration wells in the shallow waters of the Absheron archipelago," the company's vice president for communications and external relations in the Caspian region, Bakhtiyar Aslanbayli, told a briefing in Baku on July 18, according to Interfax-Azerbaijan. "We have fulfilled our obligations, but the drilling of all three wells did not reveal economically viable hydrocarbon reserves. In effect the project has been completed."

BP signed a production-sharing agreement for SWAP with Azerbaijan's state-owned SOCAR in 2014, giving each company a 50% interest in the project. The pair went on to shoot a 3D seismic survey in 2016, and spudded their first well in August 2021, followed by a second in November that year and a third in April this year. BP sought to de-risk the project late last year, selling a 25% interest to Russia's Lukoil.

BP is hydrocarbon-rich Azerbaijan's largest foreign investor, serving as operator of the producing Azeri-Chirag-Gunashli and Shah Deniz oil and gas projects, and with two other exploration targets in the country's waters. One is the Shafag-Asiman block, where it discovered gas condensate at a well in March last year. It is currently evaluating the discovery to decide on further exploration work. The second is the D230 block, where it conducted a 3D seismic survey in 2019-20, and is now deciding where to drill.