BP to develop Azerbaijan gas field

BP has signed a deal with Azerbaijan's state oil company to explore and develop a deep water gas area in the Caspian Sea.BP and the State Oil Company of the Republic of Azerbaijan (SOCAR) hope to combine their expertise to make new discoveries in the Shafag-Asiman block, with is about 78 miles southeast of the Azeri capital Baku.'With SOCAR and our partners BP has helped to establish Azerbaijan as a world scale oil and gas producer, and I believe the significant remaining potential will continue to make it relevant for decades to come,' said BP's new chief executive Robert Dudley, who attended the signing of the agreement.'We in BP very much hope that the combination of our leading technology and expertise with Azerbaijan's experience and potential will lead to new discoveries in the Caspian.'Under the 30-year production sharing agreement (PSA) between the two companies, BP Exploration Caspian Sea will be the operator with a 50% interest, while SOCAR will hold the remaining 50% equity. The two companies signed an initial agreement on the venture earlier this year.The block covers an area of about 1,100 square kilometres and has never been explored before. The deal will be a welcome one for BP's investors who have begun to look beyond the Gulf of Mexico oil spill that caused widespread environmental damage on the south eastern coast of the US and resulted in the resignation of previous chief executive Tony Hayward. Dudley took over as chief executive at the beginning of this month.