Lukoil acquires interest in Shah-Deniz project

Russian energy corporation PJSC Lukoil has acquired a 9.99% interest in the Shah-Deniz gas project from the Malaysian oil and gas company Petronas.

The stake in the Shah-Deniz gas project was bought for $1.45 billion (€1.3 billion). Following the completion of the deal, LUKOIL increased its share in the project from 10% to 19.99%. Other parties to the project are bp (29.99%, operator), TPAO (19%), SOCAR (14.35%), NICO (10%) and SGC (6.67%).​

The Shah Deniz gas condensate field is located in Azerbaijan, on the deepwater shelf of the Caspian Sea, 70 km south-east of Baku, in water depths ranging from 50 to 500 m. The Shah Deniz field was discovered in 1999 and is one of the world’s largest gas-condensate fields.

Read more: TATNEFT & KazMunayGas set up new joint venture in Kazakhstan

In 2018, the second stage of the project was launched, with annual production expected to reach 26 billion cubic metres (bcm) of gas and 5 million tonnes of oil and gas condensate.

The gas is sold on the markets of Azerbaijan, Georgia, and Turkey. Since December 2020, it is also delivered to Europe.

The project is implemented under a PSA; commercial production there began in 2006. In 2021, the field produced around 23 billion standard cubic metres (bscm) of gas and more than 4 million tonnes (around 34 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms.

Lukoil is one of the largest publicly traded, vertically integrated oil and gas companies in the world accounting for around 2% of the world's oil production and around 1% of the proven hydrocarbon reserves. The company supplies its products, power, and heat to millions of consumers in over 100 countries around the globe.

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