Gas may be extracted from the new production well SDA-06 at the gas condensate Shah Deniz Field in the Azerbaijani sector of the Caspian Sea in April, a source on the oil and gas market said.

"Engineering work on the well is still underway. Production may begin in April," the source said.

BP will start drilling a branch hole of the well SDA-03 at the gas condensate Shah Deniz Field in the Azerbaijani sector of the Caspian Sea. It was partially closed down due to its poor technical condition.

There are 5 wells in the Shah Deniz Field. At present, gas is produced from four wells.

Daily production of gas from the platform at the Shah Deniz field lies in the area of 15-23 million cubic meters. After putting new wells into operation, it can reach 25-26 billion cubic meters per day.

Peak production is forecast at over 8.6-9 billion cubic meters.

Reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas.

The contract to develop the offshore Shah Deniz Field was signed June 4, 1996. Participants to the agreement are BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, and SOCAR-10 percent.

About 23.4 million barrels of oil were transported via the Baku-Tbilisi-Ceyhan (BTC) Pipeline via Turkey in Jan. 2011 compared to 22.75 million barrels in 2010, a statement posted on the official website of the Botas Turkish state pipeline company said.

About 288.2 million barrels of oil were transported via the BTC through Turkey in 2010 compared to 285.5 million in 2009.
The BТС's total length is 1.768 kilometers including a 443-kilometer section running via Azerbaijan, a 249-kilometer section traversing Georgia and a 1.076-kilometer section passing through Turkey. The pipeline's construction began in April 2003. First oil was marked May 18, 2005.
BTC Co. shareholders include: BP (30.1 percent); AzBTC (25 percent); Chevron (8.90 percent); Statoil Hydro (8.71 percent); ТРАО (6.53 percent); Eni (5 percent); Total (5 percent); Itochu (3.40 percent); Inpex (2.50 percent); ConocoPhillips (2.50 percent) and Amerada Hess (2.36 percent).
About 12.7 million barrels of oil were transported in Jan. via the Iraq-Turkey pipeline through Turkey compared to 14.44 million barrels in 2010.
About 132.3 million barrels of oil were transported in 2010 via an Iraq-Turkey pipeline through Turkey compared to 167.6 million in 2009.
Over 1.2 million barrels of oil were transported via the Ceyhan-Kirikkale Pipeline through Turkey in Jan. compared to about 249,000 barrels in Jan. 2010. About 17.2 million barrels of oil were transported via the Ceyhan-Kirikkale Pipeline through Turkey in 2010 compared to about 20.2 million in 2009.
Over 1.5 million barrels of oil were transported in Jan. through the Batman-Dordyol Pipeline compared to 1.05 million barrels in Jan. 2010.
Over 10.6 million barrels of oil were transported in 2010 through the Batman-Dordyol Pipeline. In 2009 this figure was 12.2 million barrels

During a working visit to London, the President of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev met with the President of BP Robert Dudley, SOCAR reported on Wednesday.

The meeting, which was also attended by the President of BP-Azerbaijan Rashid Javanshir and other high-ranking officials of BP covered the long-term fruitful co-operation between BP and SOCAR, as well as cooperation in the development of Azeri-Chirag-Guneshli and Shah Deniz fields, implementation of the construction of the Baku-Tbilisi-Ceyhan pipeline. In addition, discussions were conducted on the work on the Shafag-Asiman field. The sides noted the high level of cooperation and significant contribution of companies to the development of Azerbaijan's economy and oil and gas industry.

The sides also discussed the prospects for the second phase of the project to develop the Shah Deniz field, as well as the transportation of Azerbaijani gas to Europe and cooperation between the two companies in other projects in Azerbaijan and in third countries.

SOCAR President also met with the ExxonMobil Regional Manager for Europe and the Caspian Region Phil Mulhall and chief advisor on international issues Steven Mann.

According to Abdullaev, ExxonMobil is one of the first international oil and gas companies operating in Azerbaijan. According to him, the company successfully cooperates with SOCAR on major regional projects. Abdullayev expressed confidence that the two companies will continue to successfully develop business partnerships formed in the previous period.

The State Oil Company of Azerbaijan (SOCAR) intends complete the two-dimensional geophysical studies on the onshore field "Hajiveli" soon, which is developed by Gobustan Operating Company (GOC), a source in SOCAR said on Saturday.

The contract area consists of three blocks with total area of 604 square kilometers. These blocks include the previously developed "Shikhzakirli", "Shenatud", "Vurkut", "Donuzlug", "Nardaran", "Ilhichi", "Garbi Hajiveli", "Sunda", "Shargi Hajiveli ", "Turagay", " Kenizdag "," Garbi Duvanni ","Duvanni"," Solakhay"and "Dashgil".
According to the source, now the weather does not allow completing the work.
"As the weather conditions allow, field work, which left little, will be completed," the source said.
He also said that SOCAR will hold geophysical studies, the rest of the work will be carried out by client company.
The operating Gobustan Operating Company (GOC) deals with the development of "South-West Gobustan" under the PSA contract, concluded with SOCAR. In GOC, 80 percent of participation is owned by the Commonwealth Gobustan Limited, 20 percent are assigned to SOCAR.

The natural gas supply from the Caspian region to Europe will be increased over the next decade, BP Expert Greg Saunders said at 'The US Strategy in Southern Caucasus and the Caspian 'conference held in the Center for Strategic and International Studies (CSIS) in Washington on Friday.

"I hope that supplies will significantly increase from the Caspian region via Turkey to the European markets," Saunders said, evaluating current and future trends in the energy markets and Azerbaijan’s potential in the south energy corridor. "

He predicted a significant increase in demand for gas from the Caspian region. He believes the share of gas supplies from the Caspian Sea to Europe will reach 5-10 percent by 2025.

Based on BP’s 2009- statistical estimates over the supply of energy resources from the Caspian region, Turkmenistan possesses the largest proven resource. The country is followed by Kazakhstan and Azerbaijan, but if "you look at it in terms of marketing and gas supply to Europe, you have to look at the situation through an entirely different perspective’, Saunders said.

"Where is the available gas, which is cheapest to deliver to the Western markets, located?” Saunders inquired. “In reality, the best place that can be found, and the most abundant - is Azerbaijan."

Saunders prefaced his assessment by saying that excess has been observed in the natural gas supplies to Europe recently, and so many countries and companies are trying to renegotiate contracts with Russia's Gazprom to achieve better prices and larger volumes.

But, he said, the combination of economic growth and climate change policy will result in an excess by the end of this decade that will turn into a deficit.

“A search for additional sources of gas will be observed and gas supplies will be diversified,” Saunders said.

"We will be aware of the amount and ways, through which Azerbaijani gas will be delivered to Europe, by late 2011,” he added.

According to "BP Statistical Review of World Energy" published in 2009, Turkmenistan's gas reserves amount to 8.1 trillion cubic meters, Kazakhstan’s - 1.82 trillion cubic meters and Azerbaijan’s - 1.31 trillion cubic meters.

The cost of the Nabucco gas pipeline project designed to transport gas from the Caspian region and the Middle East to the EU countries can be revised upwards, said Reinhard Mitschek, Managing Director of NABUCCO Gas Pipeline International GmbH, EU business reported.

Mitschek said with international tension surrounding Iran's controversial nuclear programme, the Nabucco consortium had decided to divert a planned stretch of the pipeline from the Islamic republic to Iraq instead, which was equally rich in gas.

"That will add a further 550 kilometres (342 miles), meaning it will measure 3,900 kilometres (2,420 miles) in total," he said.

While the changes have not been officially confirmed by the consortium, the estimated costs are likely to be revised upwards to reflect the increased length.

In August 2010, the Nabucco shareholders agreed on a modification of the feeder line concept at a meeting in Ankara. Two feeder lines were approved and the respective engineering works were ordered. The feeder lines will run to the Turkish-Georgian and Turkish-Iraqi borders.

To date, the pipeline’s estimated length stood at 3300 km.

The construction of Nabucco pipeline will to start in 2012 and the first supplies is expected in 2015. The project's participants include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE.

By 2020, gas production in Azerbaijan may increase twice from 27 billion cubic meters, which were produced in 2010, Deputy Industry and Energy Minister Natig Abbasov said on Tuesday at a meeting on the discussion of the memorandum signed between the EU and Azerbaijan in the energy sphere.

According to him, this gas will allow filling the projects of the “Southern Energy Corridor”. At present, Azerbaijan’s proven gas reserves hit 2.2 trillion cubic meters. Last year Azerbaijan opened a field, reserves of which are estimated at least 200 billion cubic meters.

Azerbaijan also has such promising structures as “Absheron”, “Nakhchivan”, “Babak”, which will significantly increase gas reserves in Azerbaijan.

The Southern Energy Corridor is a priority EU energy project diversifying energy supply routes and sources and increasing EU energy security. The Southern Corridor includes the Nabucco gas pipeline, Trans Adriatic Pipeline (TAP), White Stream, and ITGI (Turkey-Greece-Italy pipeline).

Azerbaijani gas from the Shah Deniz field with reserves of 1.2 trillion cubic meters of gas is regarded as one of the main sources for the first phase of these projects, It is also expected to receive gas from Turkmenistan and Iraq as the main raw material in the future.