BP share price: Energy giant starts production at Caspian Sea project

on Jan 30, 2014
Updated: Oct 21, 2019

iNVEZZ.com, Thursday, January 30: (LON:BP) has started production at the West Chirag platform of the Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea, the oil major has said.

Separately, Reuters today reported that the company was dropping plans to invest in a refinery in China amid slowing oil demand growth.
BP’s share price has added about 0.5 percent in London trading today.
**West Chirag production**
BP announced yesterday in a statement that oil production at the West Chirag platform had started from one of the pre-drilled wells with production scheduled to increase through 2014 as the other pre-drilled wells were brought online. This week’s start-up of the West Chirag platform completes the Chirag Oil Project (COP) sanctioned in 2010.

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The company noted that the oil would first pass through the newly installed processing facilities on the platform and then would be exported to the Sangachal Terminal via a new in-field pipeline linked to an existing subsea export pipeline.
“The start-up of COP marks a major milestone in the development of the super- giant ACG field,” Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey, said in the statement, adding that the ACG field had produced over 2.3 billion barrels of oil to date. BP is the operator of the field with a 35.8 percent interest.

**China refinery plan to be dropped**
Reuters today quoted unnamed sources with direct knowledge of the matter as reporting that BP was dismantling the 20-strong Beijing-based team tasked with studying the feasibility of taking a stake in a refinery in the southern coastal city of Qinzhou.
The team is reportedly being reassigned after having worked for about two years on the project to invest in a plant run by China’s second-largest refinery operator PetroChina.

“There is growing concern of an over-supplied China market, so BP is taking its precautions,” one of the sources told Reuters.

The sources also said that slow progress on the project as well as BP’s internal drive to cut costs had contributed to the oil major’s decision to drop the investment plan. Similarly to peers such as Royal Dutch Shell Plc (LON:RDSA), BP has been trying to free up cash to focus on its core energy production business.

**Offloading aviation turbine business**
In other BP news, the company this week agreed to sell its specialist global Aviation Turbine Oils business to Tennessee-based Eastman Chemical Company (NYSE:EMN). The deal, which is for an undisclosed amount, followed a review of BP’s lubricants portfolio.
The sale includes BP’s aviation turbine oil manufacturing, blending and packaging business in Linden, New Jersey, as well as a string of other assets such as laboratory equipment, product formulations and customer contracts.
Iain Conn, BP’s chief executive for refining and marketing, explained in the statement that the divestment would “enable BP’s lubricants business to focus on investments in other industry sectors”.
“Our intent is to grow the lubricants business globally,” Conn added.
**As of 14:11 UTC, buy BP shares at 481.95p.**
**As of 14:11 UTC, sell BP shares at 481.85p.**

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