BP 2013 Annual Report Download - page 245

In addition, BP has a 13.6% share in the Angola LNG project, which is
expected to receive approximately 1bcf of associated gas per day from
offshore producing blocks and to produce 5.2 million tonnes per annum
of LNG (gross), as well as related gas liquids products. The Angola LNG
project exported its first cargo of LNG in June.
In Algeria, BP is a partner with Sonatrach and Statoil in the In Salah (BP
33.15%) and In Amenas (BP 45.89%) projects, which supply gas to the
domestic and European markets. In addition, BP has an appraisal and
exploitation agreement with Sonatrach in the Bourarhat Sud block,
located to the south-west of In Amenas. In the exploration phase this
asset is BP-operated. The Bourarhat licence has been extended until
September 2014 and BP is currently assessing its options to appraise and
potentially develop this asset. BP’s total assets in Algeria at 31 December
2013 were $3,413 million ($324 million current and $3,089 million non-
current).
• In January a terrorist attack occurred at the In Amenas joint operation
site. Following the incident, BP had a staged reduction of non-essential
workers out of Algeria as a precautionary and temporary measure.
Trains 1 and 2 have been restored to full production but Train 3
remains out of service. In March, the decision was taken to suspend
activity at Bourarhat while options to appraise and potentially develop
this asset are assessed. Ramp-down of activity was largely completed
in October.
In Libya, BP is in partnership with the Libyan Investment Authority (LIA)
to explore acreage in the onshore Ghadames and offshore Sirt basins,
covered under the exploration and production-sharing agreement (EPSA)
ratified in December 2007 (BP 85%). BP’s total assets in Libya at
31 December 2013 were $472 million ($72 million current and
$400 million non-current).
• Planning and preparation work towards our offshore exploration drilling
programme is continuing. With respect to the onshore exploration
drilling programme, a security review in June concluded that this could
not be safely and securely delivered by BP at this time. Alternative
approaches are being considered.
In Morocco, BP entered into three farm-out agreements with Kosmos
Energy covering three blocks in the Agadir Basin, offshore Morocco.
Under the terms of the agreements, one of which is still subject to
government approval, BP will acquire a non-operating interest in each of
the Essaouira Offshore (BP 45%), Foum Assaka Offshore (BP 26.325%)
and Tarhazoute Offshore (BP 45%) blocks.
In Egypt, BP and its partners currently produce 15% of Egypt’s oil
production and more than 30% of its gas production. BP’s total assets in
Egypt at 31 December 2013 were $7,638 million, of which $2,299 million
were current (see Financial statements – Note 19) and $5,339 million
were non-current.
• In July the Egyptian army chief removed the country’s then-incumbent
president, Mohamed Morsi, from power and suspended the Egyptian
Constitution. Adly Mansour, Chief Justice of the Supreme
Constitutional Court of Egypt was declared interim president. The
political and economic situation remains challenging despite aid being
pledged from neighbouring Gulf states. Our production and operations
continue and we are engaged with the government in managing our
operations.
• In September BP announced a significant gas discovery in the East Nile
Delta with the Salamat well, the deepest well ever drilled in the Nile
Delta. Salamat is the first well to be drilled in the BP-operated North
Damietta (BP 100%) offshore concession awarded in 2010.
In Namibia, BP is a non-operating partner in one deepwater block, which
is currently in the exploration phase. This block was accessed in 2012. In
December BP decided to withdraw from four deepwater blocks by not
exercising an option to increase its interest in Luderita Basin licence
0047, offshore Namibia.
Asia
In Asia, BP has activities in Western Indonesia, China, Azerbaijan, Oman,
Abu Dhabi, India and Iraq.
In Western Indonesia, BP is involved in two of Indonesia’s three LNG
centres. BP’s first operated LNG plant, Tangguh (BP 37.16%), is located
in Papua Barat. The asset comprises 14 producing wells, two offshore
platforms, two pipelines and an LNG plant with two production trains and
has a total capacity of 7.6 million tonnes of LNG per annum. Plans for a
third train remain on track, with commissioning projected to occur in
2019. Tangguh supplies LNG to customers in China, South Korea, Mexico
and Japan through a combination of long, medium and short-term
contracts.
BP also participates in Indonesia’s LNG exports through its interest in
Virginia Indonesia Company LLC (VICO), the operator of Sanga-Sanga
PSA (BP 38%) supplying gas to the Bontang LNG plant in Kalimantan.
Sanga-Sanga currently delivers around 13% of the total gas feed to
Bontang, Indonesia’s largest LNG export facility and one of the world’s
largest LNG plants with a capacity of 22 million tonnes per annum of LNG
and output of more than 18 million tonnes of LNG.
BP also participates in the Sanga-Sanga CBM PSA (BP 38%), as well as
one other CBM PSA, Tanjung IV (BP 44%), in the Barito basin of Central
Kalimantan. BP completed its exit from the Kapuas I, II and III PSAs in
May by transfer of its working interest to its respective partner in each
PSA.
In China, BP’s upstream activities in the country include deepwater
exploration in the South China Sea’s Block 42/05 (BP 40.82%), Block
43/11 (BP 40.82%) and Block 54/11 (BP 100%).
• In July BP announced that it had signed a PSA with CNOOC for Block
54/11 in the South China Sea. The new block is close to BP’s two other
existing deepwater interests.
• In December we completed the sale of our interests in the Yacheng
offshore gas field (BP 34.3%) in China for $308 million (subject to post-
closing adjustments).
In China, BP also has a 30% equity stake in the 7 million tonnes per
annum capacity Guangdong LNG regasification and pipeline project in
south-east China, making it the first foreign partner in China’s LNG import
business. The terminal is also supplied under a long-term contract with
Australia’s North West Shelf venture described below.
In Azerbaijan, BP invests more than any other foreign investor, operates
two PSAs, Azeri-Chirag-Gunashli (ACG) (BP 35.8%) and Shah Deniz
(BP 25.5%), and also holds other exploration leases.
• In 2012 further EU and US regulations concerning restrictive measures
against Iran were issued. The Shah Deniz joint operation and its gas
marketing and pipeline entities, in which Naftiran Intertrade Co. Ltd
(NICO) has an interest, were excluded from the main operative
provisions of the EU regulations as well as from the application of the
new US sanctions, and fall within the exception for certain natural gas
projects under Section 603 of the US Iran Threat Reduction and
Syria Human Rights Act of 2012. Shah Deniz continues to operate in
full compliance with EU and US law. For further information see
Further note on certain activities on page 267.
• In June the Shah Deniz consortium announced that it had selected the
Trans Adriatic Pipeline (TAP) to deliver gas volumes from the Shah
Deniz Stage 2 project to customers in Italy, Greece, Bulgaria and
Turkey. In September, the consortium announced that it had concluded
the Shah Deniz Stage 2 gas sales process with the completion of major
sales agreements with European gas purchasers totalling 10bcma over
25 years. This adds to existing agreements to sell 6bcma of gas in
Turkey. The agreements come in to force following the final
investment decision (FID) on the project, which occurred in December.
The upstream part of the Shah Deniz Stage 2 project entails drilling and
completion of 26 subsea wells, construction of two bridge-linked
platforms and new processing and compression facilities at the
onshore terminal. The FID also triggers plans to expand the South
Caucasus Pipeline (SCP) through Azerbaijan and Georgia, to construct
the Trans Antolian Gas Pipeline (TANAP) across Turkey and to
construct the TAP across Greece, Albania and into Italy.
• Additionally, the State Oil Company of Azerbaijan Republic (SOCAR)
and the Shah Deniz partners also agreed terms for extending the
Shah Deniz PSA to 2048 and, coincident with the FID, BP agreed to
purchase a 3.3% equity in Shah Deniz and SCP from Statoil, subject to
conditions that are expected to be satisfied in 2014.
• In January 2014 the West Chirag platform came online. This completes
the Chirag oil project sanctioned in 2010.
Additional disclosures
BP Annual Report and Form 20-F 2013 241