Identifier
Created
Classification
Origin
06BAKU1840
2006-12-20 14:09:00
CONFIDENTIAL
Embassy Baku
Cable title:  

AZERBAIJAN: BP ELABORATES ON SHAH DENIZ DELAYS

Tags:  ENRG PGOV PREL AJ TU GA 
pdf how-to read a cable
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PP RUEHAG RUEHDBU RUEHROV
DE RUEHKB #1840 3541409
ZNY CCCCC ZZH
P 201409Z DEC 06
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 2013
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES PRIORITY
C O N F I D E N T I A L BAKU 001840 

SIPDIS

SIPDIS

DEPT FOR EUR DAS BRYZA

E.O. 12958: DECL: 12/19/2016
TAGS: ENRG PGOV PREL AJ TU GA
SUBJECT: AZERBAIJAN: BP ELABORATES ON SHAH DENIZ DELAYS


Classified By: Charge Jason P. Hyland, Reasons 1.4 (b,d)

C O N F I D E N T I A L BAKU 001840

SIPDIS

SIPDIS

DEPT FOR EUR DAS BRYZA

E.O. 12958: DECL: 12/19/2016
TAGS: ENRG PGOV PREL AJ TU GA
SUBJECT: AZERBAIJAN: BP ELABORATES ON SHAH DENIZ DELAYS


Classified By: Charge Jason P. Hyland, Reasons 1.4 (b,d)


1. (C) SUMMARY: According to BP Azerbaijan, a leak in the
first Shah Deniz well, which started production on December
14, has caused production to cease. It will be early January
2007 at the earliest before the leak's cause is known, with
subsequent production hinging on the cause of the leak. BP
has also pushed back the start dates for the second and third
Shah Deniz wells, such that best case the second Shah Deniz
well will begin production "early to mid-February at the
earliest." END SUMMARY.


2. (C) In a December 20 telephone conversation BP Azerbaijan
Commercial Vice-President Dr. Phil Home (protect),acting as
BP Azerbaijan head in the absence of Bill Schrader, confirmed
to EnergyOff reports of production delays with the SD01, the
first Shah Deniz production well.


3. (C) Home said that BP had informed Azerbaijani Energy
Minister Natiq Aliyev on December 18. Home said there is a
leak from the tubing around the first well into the 'annulus'
(note: the tube-shaped void between the drill string and the
formation). This leak was causing a pressure build-up which
had to be continually bled off. Home explained that this
problem was common, but when it occurred with a high-pressure
gas well it was not safe to continue production, hence the
decision by BP to shut in the well (i.e. stop production).


4. (C) Home said that BP was sending for 'production logging
tools' to be sent to Azerbaijan, so that the source of the
leak could be found. These tools will arrive in Azerbaijan
the early part of next week (Dec 25-29). Home said that with
these tools, the necessary testing will be finished in early
January. At that time BP will know what to do next. He said
that BP would not flow the well until the cause of the leak
was known.
At best, if there is just a leak at a joint, the leak will
simply need to be patched. However, if the testing shows a
design flaw, then BP would have to "pull the completion," a
much longer process.


5. (C) Home also confirmed reports of delayed openings of the
second Shah Deniz well from mid-January to "early to
mid-February at the earliest," and the third well from
mid-February until early March at the earliest. He explained
that the drilling rig currently drilling the second well will
have to be moved back to the first well for the required
testing, a process which takes ten or so days. He added that
if the tests show design flaws were the cause of the leak in
SD01, then the start dates for the second and third Shah
Deniz wells might well be pushed back much further in an
attempt to avoid similar problems.
HYLAND