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BAKU, Azerbaijan -- SOCAR (the State Oil Company of the Republic of Azerbaijan) and AIOC (the Azerbaijan International Operating Company) have signed a Letter of Intent (LoI) for the future development of Azeri-Chirag-Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea.

The agreement will cover the development of the field until 2050 and will add significant resource development potential to the middle of the century. Today, ACG produces circa 620,000 boed. The shareholders in AIOC are BP, Chevron, INPEX, Statoil, Exxon Mobil, TPAO, ITOCHU and ONGC Videsh.

The LoI was signed in Baku by Rovnag Abdullayev, president of SOCAR, on behalf of the Republic of Azerbaijan, and by Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey, on behalf of the AIOC partnership.

The LoI agrees the key commercial terms for the future development of ACG field and enables the parties to conclude negotiations and finalize fully-termed agreements in the next few months.

Abdullayev said, “We have been in negotiations with ACG’s foreign partners for some time. We will complete fully-termed agreements in the near future. ACG is known as the “Contract of the Century”. It is very important to Azerbaijan—it is the symbol of our oil industry. It has opened up a whole new era for the country’s development. The Letter of Intent we signed today with ACG’s foreign partners signifies that we can now look ahead to many more years of ACG’s success.”

Birrell added, “As operator of ACG we are pleased to have the opportunity to continue to lead this world-class field development safely and efficiently. Today’s signing allows us to look ahead to the next chapter in ACG’s success and indeed in Azerbaijan’s energy story. We believe together we will be able to build on this success by continuing to combine the country’s potential and experience with leading technology.”