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LUKOIL in the Republic of Azerbaijan

PJSC LUKOIL has been operating in the Azerbaijani oil-and-gas industry since 1994, when the Company joined its first international development project for the Azeri-Chirag-Gyuneshli oil field, one of the largest in the Azerbaijani sector of the Caspian Sea. LUKOIL was the first among Russian major business enterprises to start operations in Azerbaijan.

The Company is presently involved in the development of Shah-Deniz, a gas condensate field in the Azerbaijani water area in the south-western Caspian Sea. Shah-Deniz is one of the largest and most capital-intensive oil and gas projects globally.

Since 1995, LUKOIL has been developing its own marketing network of world-class fuelling complexes in Azerbaijan. January 2000 saw the commissioning of a petroleum depot capable of transhipping 120 ths. tons of petroleum products annually. This turned LUKOIL into a reliable supplier of diesel and automotive gasolines to major international and Azerbaijani businesses operating in the domestic market.

Company Presence

Subsidiary
Activities
LUKOIL Overseas Shah Deniz Ltd.ПермКрай_иконка_Добыча-нефти-газа.jpg    Oil and Gas Production
CJSC LUKOIL-Azerbaijan    Petroleum product marketing

The 860 sq. km Shah-Deniz gas-condensate field is situated in the Azerbaijani sector of the Caspian Sea, 70 km southeast of Baku at depths between 50 and 500 m. Its reserves total 1.2 trln sq. m of gas and 240 mln tons of gas condensate. The 40-year Production Sharing Agreement for the project providing for a possible 12-year extension took effect in 1996, while the discovery of commercial reserves occurred in 2001, and first gas was produced in 2006. The production operations currently underway are a part of Stage 1 of the field development.

Recovered gas is delivered to buyers via the South-Caucasus pipeline Baku - Tbilisi - Erzurum, while recovered liquid hydrocarbons are delivered via the Baku-Tbilisi-Ceyhan oil pipeline. The 2nd stage of Shah-Deniz development commenced in December 2013. Being one of the most capital-intensive oil and gas projects globally, this project is expected to result in an annual additional production of 16 bln cu. m of gas, 10 bln cu. m of which are expected to be supplied to Europe, and 6 bln. cu. m to Turkey. Commissioning of production facilities and first gas of the 2nd stage are scheduled for late 2018. The peak aggregate production of the first and second stages is expected to reach 25 bln cu. m per annum.

LUKOIL supports Azerbaijani cultural organizations, on-stage performance groups, educational institutions, war veterans, children from low-income families and orphans.

In 1996, the company set up the Baku Branch of the LUKOIL Charity Fund, that has provided over 2.6 mln

dollars to support to culture, education and research in the Republic since its foundation.

The Company's charity assistance was used to complete a number of major social, cultural and public projects, such as:

  • The making of films about the lives and creative works of some of the Azerbaijani coryphées of music,

  • i.e. the outstanding composer Kar Karaev and renowned conductor Niyazy, as well as the well-known oil researcher, academician and President of the Republic's Children's Fund İsmayıl İbrahimov.

  • The unveiling in Baku of a monument in honor of Yusif Məmmədəliyev, the outstanding scholar, academician, former President of the Academy of Sciences, marking his 90th anniversary.

  • The erection in Baku of a monument in honor of the great Russian poet Alexander Pushkin.

  • An exhibition of art from Moscow's Tretyakov Gallery. The renovation of the Sergey Esenin museum in Mardakyanakh.

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