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BP's $4 billion capital expenditure in Azerbaijan

Posted: 27 April 2003

Baku —The capital expenditures in the Azeri projects that BP operates (namely, Azeri-Chirag-Guneshli, Shahdeniz and the Baku-Tbilisi-Ceyhan oil pipeline) would amount to $4 bn by the end of this year, president of BP Azerbaijan David Woodward said at the press conference in Baku today.

According to Mr Woodward, the operating costs of AIOC (ACG) amounted to $21 mn in the first quarter of this year, while the planned annual operating costs equal $100 mn; the capital expenses of the consortium equalled $439 mn in the first quarter while the total planned for this year equals $2052 mn.

The operating costs of the consortium reached $88 mn in 2002, which was $4 mn less than it was proposed to spend last year. The capital expenses of AIOC equalled $1.172 bn last year, as against the referring plan for $1.151 bn, which means there was an increase by $21 mn in capital expenses last year.

The operating costs are going to be higher than they were in 2002 because of the additional well work-over and equipment repair plans. The dramatic increase of the capital expenses is consequent to the larger amount of work that has to be done in the format of the ACG project.

BP, the leader of AIOC, employs approximately 1 thousand citizens of Azerbaijan; moreover, it is planned to take on more than 100 citizens in addition to that this year.

The construction contractors working in Azeri have more than 4 thousand citizens of Azerbaijan involved in their operations, while it is forecast that the maximal number of Azeri citizens will be employed this year, namely, there will be 6 thousand new positions for locals as against the previously planned 5 thousand positions.

There will be approximately 10 thousand jobs opening in relation with construction of the BTC pipeline, including 2.3 thousand in Azerbaijan, 2.5 thousand in Georgia and 5 thousand in Turkey. In addition, these three countries' citizens will be able to obtain long-term employment at the pipeline facilities during the period of operation.

There will be many new jobs in the Shahdeniz project as well, both at the construction stage and during the period of operation. The construction phase is going to provide employment for 4.2 thousand locals to build the South-Caucasian Pipeline; also, 1.3 thousand vacancies more will be opened for construction to be carried out onshore and offshore.

Approximately thirty local companies are involved in construction activities within the scope of BP's project, for example, Azerkorpu Rovshan Oguz, AzFen, SPS, Azertunnel, Kaspmornefteflot, Azpetrol, Encotec and Neptune. (Azer-Press Azerbaijan)


Posted by Richard Price, Editor

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