AZERBAIJAN: GAS LEAK SLASHES OIL PRODUCTION IN

C O N F I D E N T I A L BAKU 000883 SIPDIS STATE FOR OPSCENTER E.O. 12958: DECL: 08/16/2018 TAGS: AJ CASC ENRG PGOV PREL SUBJECT: AZERBAIJAN: GAS LEAK SLASHES OIL PRODUCTION IN OFFSHORE ACG FIELD Classified By: Polecon Chief Robert Garverick, reasons 1.4 (b,d) ¶1. (C) According to BP Azerbaijan Vice-President for Communications and External Affairs Seymour Khalilov, at 0820 hours Baku local time Central Azeri Offshore oil platform workers noticed gas bubbles "about one-third the size of soccer balls" coming to the water's surface around the platform. Subsequently the platform's gas detection system signal went off, signaling abnormal levels of underwater gas. At 0900 hours the Offshore Installation Manager decided to evacuate the platform, sounding the "muster" alarm at 0900 hours. The 211 workers aboard the platform immediately deployed to lifeboats, subsequently moving to an offshore vessel to be transported to shore. ¶2. (C) BP Azerbaijan then shut in production at the Central Azeri field and also shut down all pipes coming into and out of Central Azeri, forcing a shut-in of production for the Western Azeri Platform too (note: these two platforms are the two major ones in the ACG field, designed for a combined total of approximately 600,000 barrels per day). Khalilov told Econoff that with Central Azeri and Western Azeri platforms shut down there would be a production decrease of approximately 540,000 barrels per day. He said the Eastern Azeri platform was still producing, albeit at reduced rates, the Deep Water Gunashli platform was also continuing production at approximately 90,000 bpd, and the Chiraq platform was still flowing at approximately 120,000 bpd. Operations at the offshore Shah Deniz gas field were not affected. ¶3. (C) Khalilov said it was too early for BP to have an idea of the cause of the underwater gas leak. BP was dispatching a remotely operated vehicle (ROV) to Central Azeri to conduct an underwater survey of the subsea structure. BP was also reviewing the results of last year's ROV underwater inspection of Central Azeri, conducted approximately September 2007, to see if there were any clues as to what might have happened. Khalilov said that BP Azerbaijan would not restart production at these two wells until and unless it understood the cause of the leak. BP Azerbaijan has set up a "BP Business Support Team," meeting every few hours, to manage this production disruption. ¶4. (C) In a subsequent conversation with Econoff, BP Azerbaijan President Bill Schrader confirmed that the ACG field had been running at about 900,00 bpd until these two wells went offline. It was now producing "at around forty percent," with the goal to be producing at approximately 400,000 bpd until BP can restart these two wells. Schrader stressed that "this was definitely not sabotage or an accident . . . this has to do with geology (i.e. underwater seismic activity) and/or the well itself." ¶5. (C) Schrader also stressed that there will be no oil supply disruption to the Ceyhun terminal in Turkey, as the oil storage tanks at the Sangachal terminals were full. In a subsequent conversation, a Sangachal executive told Econoff that the approximately three million barrel storage at Sangachal was approximately 75 percent full, and that the BTC pipeline could run at current levels for "a couple of days" before volumes would have to decrease. He added that BP Azerbaijan hoped to know more tomorrow, after the ROV had been deployed. ¶6. (C) COMMENT: This incident, coming as it does after the BTC explosion in Turkey in early August and the subsequent Russian aggression in Georgia, is bound to spark rumors of Russian subsea foul play. BP Azerbaijan states that there is currently no indication of any such sabotage, although it also points out that it doesn't yet know the cause of the gas leak. ¶7. (C) COMMENT (CONTINUED): From an ACS viewpoint, some of the 212 Central Azeri workers who had to evacuate the platform in a hurry are American citizens, and they left the platform without their passports. If there is a prolonged work disruption, BP will seek to have them leave the country. In that instance, BP Azerbaijan will work with Embassy Consular section towards seeking exit documents for those American citizens seeking to leave. END COMMENT. DERSE