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Japanese Companies Conclude Agreements to Extend the Production Sharing Agreement for the ACG Offshore Oil Concession in Azerbaijan for additional 25 Years

On September 14, 2017, INPEX CORPORATION (INPEX) and ITOCHU Corporation concluded agreements to extend the Production Sharing Agreement (PSA) for the Azeri-Chirag-Gunashli (ACG) field with the State Oil Company of Republic of Azerbaijan (SOCAR) for an additional 25 years.

1. Significance of the extension

ACG oilfield boasts world-class reserves, famous for producing a total of around 600,000 barrels per day.

The ACG oilfield is a venture project of BP and other international oil and natural gas developers (oil majors) and INPEX, ITOCHU Corporation, the SOCAR and other entities. In light of this, this extension will contribute to the improvement of Japan’s independent development ratio of crude oil secured by off-take rights and also to the further development of the existing, long-standing harmonious cooperation relationship between Japan and Azerbaijan.

2. Past efforts

The high-level officials of the government of Japan have been encouraging, on a continuous basis, the president of Azerbaijan as well as the president of SOCAR and other stakeholders to extend the term of Japan’s oil concessions on the ACG oilfield. Moreover, Japan has been providing to the country cooperation projects, including those for human resource development and exchange of technical experts by requests from the government of Azerbaijan and SOCAR. The extension agreement concluded this time is considered showing Azerbaijan’s appraisal for the broad-range relationship between Japan and Azerbaijan as well as for Japanese companies’ real ability.

3. Future actions

Japan will continue to endeavor to support Japanese companies’ efforts for extending the term of oil or natural gas projects’ concessions, in which such companies have been participating.

Reference: Azeri, Chirag, Deepwater Gunashli (ACG) oilfield

ACG oilfield is located in the Caspian Sea offshore of the Republic of Azerbaijan. The area also serves as a source of oil exported to European countries through Turkey by means of pipelines. It produces a total of around 585,000 barrels per day (average amount in the first half of 2017).

Release date

September 14, 2017

Division in Charge

Petroleum and Natural Gas Division, Natural Resources and Fuel Department, Agency for Natural Resources and Energy

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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