Russian Lukoil and Malaysia’s Petronas change Shah Deniz deal due to pre-emption by partners

Moscow, December 10 - Neftegaz.RU. Lukoil signed the initial agreement with Petronas on acquiring 15.5 % interest in the Shah Deniz project in October 2021, Offshore Energy has reported.
The deal was supposed to increase Lukoil’s interest in the project from 10 % to 25.5 % after paying $2.25 billion.

Now, Lukoil has signed amendments to the agreement concluded in October on the acquisition of a share in the Shah Deniz project from Petronas.


According to Lukoil, the conclusion of the amendments resulted from negotiations with the Shah Deniz project partners on the implementation of pre-emptive rights.
Other parties in the project are:

• BP (operator, 28.8 %)
• TPAO (19 %)
• SOCAR (10 %)
• NICO (10 %)
• SGC (6.7 %)

The BP-operated Shah Deniz gas condensate field is located in the Azerbaijan sector of the Caspian Sea, 70 km southeast of Baku.
The project is implemented under a PSA and the commercial production there began in 2006.
In 2020, the Shah Deniz consortium extracted 18.1 bcm of gas and 3.6 million tonnes of gas condensate.

In July 2021, Shah Deniz consortium started production from the East South flank at 540 m water depth – the biggest milestone planned for the project this year.

The new East South production flank consists of 4 wells, 2 new flowlines, and a number of subsea structures connected to the world-class Shah Deniz reservoir.