Lukoil expands its gas portfolio by increasing its share in Shah Deniz project

The increase two years ago of LUKOIL's share in the Shah Deniz gas project in Azerbaijan to 19.99 per cent from 10 per cent (this deal was closed at the beginning of 2022) allowed it to increase its foreign gas production portfolio under the international SEC settlement system.

“According to international projects, gas production in 2023 increased by 0.6 per cent and amounted to 17 billion cubic metres due to an increase in LUKOIL’s share in the Shah Deniz project in Azerbaijan in 2022, as well as the effect of Production Sharing Agreements (PSA) in conditions of lower gas prices in 2023,” Trend reports, citing the LUKOIL report noted.

Gas production from Shah Deniz has been conducted since December 2006 based on a contract signed in 1996.

Currently, the project participants are bp (29.99 per cent), SOCAR (21.02 per cent), LUKOIL (19.99 per cent), NICO (10 per cent) and TPAO (19 per cent).

Shah Deniz reserves are estimated at 1.2 trillion cubic metres, and a sixth of the reserves have been extracted.