Lukoil to enter the exploration project on the Azerbaijani shelf of the Caspian Sea

Alexey Belogoryev, Deputy Principal Director on Energy Studies at the Institute for Energy and Finance, commented to the newspaper Vedomosti on acquiring a stake by Lukoil in the Shallow Water Absheron Peninsula (SWAP) exploration project in the Azerbaijan sector of the Caspian Sea.

Lukoil signed an agreement with BP on acquiring a 25% participating interest in the Shallow Water Absheron Peninsula (SWAP) exploration project in the Azerbaijan sector of the Caspian Sea, the Russian company informed on September 29. The deal is expected to complete before the end of 2021, following its approval by the government of Azerbaijan. Its amount has not been disclosed. BP will remain the project operator, holding a 25% interest. The third party to the project is SOCAR, the State Oil Company of the Azerbaijan Republic, with a 50% share.

Alexey Belogoryev, notes that Lukoil's production volumes would not have shown significant positive dynamics even without taking into account the impact of the OPEC + deal to reduce production.

“This is especially true for the traditional oil-bearing regions of the company, such as Western Siberia. In the absence of prospects for building up the resource base here, Lukoil is forced to look for growth points abroad,” the expert says.