Posts Tagged ‘Caspian Sea’

I’m still interested in the Caspian Sea. (See While oil and gas are still my primary interests, today I’m also curious about water. Who owns the water in the Caspian Sea? Can Iran just siphon it off, without getting permission from the other littoral states? Or the major gas/oil conglomerates operating there? I’ve done an internet search about it and really didn’t find anything that addresses that question. Here’s some of what I did find today.

Its Great Lake Shriveled, Iran Confronts Crisis of Water Supply
New York Times online
JAN. 30, 2014

LakeUrmiaIranLAKE URMIA, Iran — An abandoned ship rusts in the mud on the south shore of Lake Urmia, where only 5 percent of the water remains, Iranian environmental officials say. Morteza Nikoubazl for The New York Times.

After driving for 15 minutes over the bottom of what was once Iran’s largest lake, a local environmental official stepped out of his truck, pushed his hands deep into his pockets and silently wandered into the great dry plain, as if searching for water he knew he would never find.

Just an hour earlier, on a cold winter day here in western Iran, the official, Hamid Ranaghadr, had recalled how as recently as a decade ago, cruise ships filled with tourists plied the lake’s waters in search of flocks of migrating flamingos.

Now, the ships are rusting in the mud and the flamingos fly over the remains of the lake on their way to more hospitable locales. According to figures compiled by the local environmental office, only 5 percent of the water remains.

Iran is facing a water shortage potentially so serious that officials are making contingency plans for rationing in the greater Tehran area, home to 22 million, and other major cities around the country. President Hassan Rouhani has identified water as a national security issue, and in public speeches in areas struck hardest by the shortage he is promising to “bring the water back.”

Iran’s parliament approves project on transfer of water from Caspian Sea
Trend online magazine
Jan 23, 2014

Iranian parliament has approved the project on transfer of water from the Caspian Sea to the deserts in the country’s central parts, Iranian Energy Minister Hamid Chitchian said, Mehr News Agency reported on Jan. 23. The minister noted that funds have been allocated from Iran’s state budget for this project.

Commenting on the Lake Urmia revival project the minister added that a committee was created for saving the lake. The committee will be chaired by Iranian First Vice President, Eshaq Jahangiri.

In April 2012 the former president of Iran, Mahmoud Ahmadinejad attended the foundation-laying of an irrigation system designed for transferring of water from the Caspian Sea. However Iranian MPs and some economic experts considered this project ineffective and demanded suspension of its implementation, after which construction was delayed.

The project for transfer of the Caspian Sea waters to the central regions of Iran includes: construction of hydroelectric power stations, a desalination plant, pumping stations, power lines, water pipes and tanks, according to the message.

The headquarters of Khatam-ol-Anbia, affiliated with the Islamic Republic of Iran Guard Corps (IRGC) will control the project’s realization, according to the message.

Deputy FM in Astana to Participate in Caspian Sea Working Group
January 29, 2014

TEHRAN (Tasnim) – Deputy Foreign Minister for Asian and Pacific Affairs Ebrahim Rahimpour left Tehran for Kazakhstan capital city, Astana, Wednesday to participate in the 35th meeting of the special working group of the Caspian Sea.

The working group session on the Convention on the legal status of the Caspian Sea will be held in Astana for two days with the special representatives and deputies minister of the five littoral countries of the Caspian Sea.

The deputy foreign ministers of Iran, Russia, Turkmenistan, Kazakhstan, and Azerbaijan will in the meeting discuss the latest developments regarding the legal regime of the Caspian Sea and prepare a report for the upcoming ministerial meeting due to be held in Russia this spring. Moscow will also host The Caspian Sea Littoral States Summit late in summer.

The Caspian Sea is the largest enclosed water body on earth by area, variously classed as the world’s largest lake or a full-fledged sea.

The Caspian Sea Convention will determine the territorial rights of littoral states- Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan – as well as other matters related to the world’s largest landlocked body of water.

The Caspian Sea legal regime is based on two agreements signed between Iran and the former Union of Soviet Socialist Republics (USSR) in 1921 and 1940. The three new littoral states, established after the collapse of the Soviet Union, have not recognized the prior treaties, triggering a debate on the future status of the sea.

BP Starts Production at West Chirag in Caspian Sea
Wall Street Journal online
Jan. 29, 2014

CaspianOilFieldsLONDON—Oil major BP PLC said Wednesday that production has started at the West Chirag platform of the Azeri-Chirag-Gunashli field in the Azerbaijan sector of the Caspian Sea, completing the Chirag oil project which was sanctioned in 2010.

West Chirag production began from a pre-drilled well called J05 on Jan. 28 and will increase throughout this year as other pre-drilled wells are brought on line, BP said without indicating volumes. However, BP said the new platform has a capacity for 183,000 barrels a day with a gas export capacity of 285 million standard cubic feet a day.

“The startup of Chirag oil project marks a major milestone in the development of the super-giant ACG [Azeri-Chirag-Gunashli field],” Gordon Birrell, BP’s Regional President for Azerbaijan, Georgia and Turkey said.

“To date the ACG field has produced over 2.3 billion barrels of oil and with future continual major investments in new technologies and facilities, like the one we have today started up, it will continue to produce as a world-class reservoir for many decades,”, Mr. Birrell added.

BP is operator of the field with a 35.8% interest. Partners in the field include SOCAR with 11.6%, Chevron CVX -4.14% Corp with 11.3%, Inpex Corp with 11%, Statoil AS STL.OS -1.46% A with 8.6%, Exxon Mobil Corp with 8%, TPAO with 6.8%, Itochu 8001.TO +0.56% Corp with 4.3% and ONGC Videsh Ltd. with 2.7%.

BP Seeks ACG Extension to Maintain Output at Largest Azeri Field
Bloomberg News
Jan 29, 2014

BP Plc (BP/) is seeking to extend its oil contract on the Azeri-Chirag-Guneshli field beyond 2024 to allow more investment and sustain output at the largest Azeri deposit after its local partner last year said there weren’t such plans.

The Caspian Sea field produced 32.5 million tons of oil in 2013, down from 32.9 million tons. While the new $6 billion West Chirag platform that started output yesterday will help offset natural decline, BP said at least one more is needed by 2021.

“We are talking to State Oil Co. of Azerbaijan about the next phase,” Gordon Birrel, Azerbaijan, Georgia and Turkey manager, said in Baku, the Azeri capital. “But we have no fixed and agreed plans at this point. This field needs investment and at least one more platform to maintain production.”

West Chirag is estimated to produce about 60,000 barrels a day, or 3 million tons, this year, he said. The platform will have at least 14 wells, with six running this year, Birrel said. It’s the largest and most technologically advanced of the eight current platforms in Azerbaijan’s section of the Caspian Sea, he said. The site has a capacity of 183,000 barrels of oil a day.

Caspian Sea set for offshore resurgence
Ian Thom – Wood Mackenzie
1 March 2010

“As of Jan. 1, 2010, BP has the most valuable upstream portfolio (amongst international companies) in the Caspian offshore sector due to its stakes in ACG and Shah Deniz.”

The Caspian Sea is the setting for some of the world’s oldest offshore oil developments. These date to the late 1940s in Azerbaijan, when the Pirallahi, Gurgany Deniz, and Chilov Adasy fields were brought onstream. Azerbaijan remained a prominent offshore producer through the 1950s and, for a while, the Neft Dashlary field took on the mantle of the world’s biggest offshore project.

Despite this early success, over the next 40 years Azeri exploration and production failed to extend much beyond the shallow water Absheron Peninsula area. The priorities of the Soviet state shifted onshore to reserves in the West Siberian basin, and the indigenous industry lacked the technology, experience, and inclination to invest in the known giant reserves of the deeper water Caspian.

Fast-forward to the collapse of the Soviet Union in the early 1990s, when the Caspian was restored to its place of prominence in the international offshore industry. The newly independent states of Azerbaijan, Kazakhstan, and Turkmenistan sought partnerships with international oil companies to develop their natural resources and to provide much-needed revenue for the bankrupt, fledgling states.

Now, less than 20 years later, the Caspian offshore is one of the world’s most important sources of oil and gas production growth. In 2010, offshore production is expected to top 1.5 MMboe/d, with plans in place to reach 3 MMboe/d by 2020.

Three giant offshore fields – Azeri-Chirag-Guneshli (ACG), Shah Deniz, and Kashagan – account for the majority of oil and gas investment, and about two-thirds of remaining reserves. ACG and Shah Deniz are providing steadily increasing revenues to the Azeri state and its international partners, while critical new regional infrastructure has been installed in the form of the Baku-Tbilisi-Ceyhan and South Caucasus pipelines.

In Kazakhstan, the Kashagan field is expected to export its first oil in 2013, with construction of a major new export pipeline anticipated for full field development. These new pipelines will unlock reserves in the giant fields while acting as a catalyst for myriad smaller projects which will be ready for development over the next two decades.


The giant ACG field contributes over 1% of global oil supply. It was discovered in 1979, although the production sharing agreement (PSA) was only signed in 1994, with first production three years later. The development comprises five fixed platforms, a large processing facility onshore with oil exported through the 1 MMb/d, Baku-Tbilisi-Ceyhan pipeline. Production has increased steadily since 2005, and is approaching its plateau level of around 1 MMb/d. Subsea tiebacks are installed in the deeper water parts of the Guneshli field, and are the first examples of this technology in the Caspian Sea.

The project partners are BP (34.14% and operator), Chevron (10.28%), INPEX (10%), SOCAR (10%), Statoil (8.56%), ExxonMobil (8%), TPAO (6.75%), Devon Energy (5.63%), Itochu (3.92%), and Hess Corp. (2.72%). Reserves of around 5.4 Bbbl of oil should be produced within the contract period. A further billion barrels of reserves could be added with development of the Balakhany reservoirs, and by enhanced recovery from existing pay zones.

Shah Deniz

Gas from the giant Shah Deniz gas-condensate field is exported to Georgia and Turkey, and ultimately could reach the European market. The field was discovered in 1999 and began production in 2006 from a jackup platform. Well output has averaged 175 MMcf/d. The project partners are BP (25.5%), Statoil (25.5%), LUKoil (10%), National Iranian Oil Co. (10%), SOCAR (10%), Total (10%), and TPAO (9%). The project is jointly operated by BP and Statoil. BP is responsibile for the operations while Statoil manages the commercial aspects of Phase 1 contracts. The field has commercial reserves of over 22 tcf of gas, although only 6.6 tcf is contracted under the first development phase. The operator plans a second phase, which is yet to be sanctioned, to involve construction of an additional platform and subsea facilities to recover of another 10-15 tcf. Gas from the second phase is hotly sought after by a number of competing pipeline projects vying to supply the European market.


The super-giant Kashagan field, largest in the Caspian, is huge even in global terms, with an estimated 13 Bbbl of oil reserves. Its development is proving to be one of the world’s largest and most complex engineering projects. It was discovered in 2000 and is part of the North Caspian Sea PSA. The first development phase is under way, and production is expected to begin in 2013. The field is expected to produce 1.5 MMb/d at plateau, around 10 years after first oil, although these later phases have to be sanctioned by the partners and government, and are subject to huge uncertainties over timing and cost.

The partners are Eni (16.81%), ExxonMobil (16.81%), KazMunaiGas (16.81%), Shell (16.81%), Total (16.81%), ConocoPhillips (8.4%), and INPEX (7.56%). The project operator is North Caspian Operating Co. (NCOC). It is responsible for general management but some of the individual partners have specific roles. Eni is responsible for Phase 1 development until first oil. Thereafter, Shell will have the offshore operations role for Phase 1 and the offshore development role in further phases.

Upstream rankings

As of Jan. 1, 2010, BP has the most valuable upstream portfolio (amongst international companies) in the Caspian offshore sector due to its stakes in ACG and Shah Deniz. ExxonMobil and Total occupy second and third position, although neither has a major operated project, while the main Kashagan partners occupy positions two through six. For comparison, the cumulative remaining value (NPV10) to the four littoral states amounts to $280 billion – a factor of 20 greater than BP.

LUKoil ranks highest in terms of remaining reserves, due to its stakes in Severnyi block, Khvalynskoye, and Shah Deniz. This contrasts to its eighth place in value terms – a contrast which reflects the early stage of the Severnyi development (with major expenditures still to come), its liability for Russian oil export duty, and the large proportion of gas reserves. The main Kashagan partners also rank highly, along with BP and SOCAR.

(Reprinted from PressTV online article, 15 Feb 2010.)

The Islamic Republic of Iran has started drilling its first exploratory well in the Caspian Sea to search for oil in the resource-rich body of water.

“The Amir-Kabir semi-submersible drilling rig has started exploration drillings in the Caspian Sea. It will drill the country’s first exploratory well at a depth of 1,550 meters under the seabed,” North Drilling Company Managing Director Hedayatollah Khademi told the Mehr News Agency on Saturday.

In light of the great potential of the region, there is a very good possibility that the Amir-Kabir (formerly known as Iran-Alborz) semi-submersible drilling rig will help find new reserves of crude oil in the Caspian Sea, he added.

The drilling rig weighs 14,000 tons without its attachments and will facilitate exploration in deep waters in the southern part of the Caspian Sea.

According to estimates, the southern part of the Caspian Sea holds at least 32 billion barrels of oil reserves. Iran’s exploration efforts have so far led to the discovery of 46 oil fields in the Caspian Sea.

Iran has the world’s third-largest proven reserves of crude oil, mainly located in the southwest of the country and offshore in the Persian Gulf. (emphasis added)

Why does this matter enough for me to reprint it here? Because of where the Caspian Sea is, who the countries are that surround it, and what they are doing there as we speak. See my earlier articles about the Caspian Sea and oil.

“Follow the money” is always good advice. Money / power / control… lots to be had in and around the Caspian Sea. It’s not only Middle Eastern nuclear power (weaponry) they’re interested in controlling.

Iran to drill Caspian Sea for oil soon
Tehran Times 8 Dec 2009

According to estimates, the southern part of the Caspian Sea holds at least 32 billion barrels of oil reserves.

Iran to privatize northern oil exploration rights
Tehran Times 11 Aug 2009

Photo caption: Recently launched Iran-Alborz oil exploration platform in the Caspian Sea.

The Iranian Privatization Organization has been given the rights to privatize 80 percent of the rights to explore oil in the country’s northern sector and the Caspian Sea.

“Privatize,” right.