Azerbaijan Strategic Performance Unit BP Azerbaijan Strategic Performance

Azerbaijan Strategic Performance Unit BP Azerbaijan Strategic Performance Unit Sangachal Terminal Presentation July, 2009

Azerbaijan Country Context • Area • Population 86, 600 km 2 (33, 774 sq miles) 8. 5 million Oil history – Famous Azerbaijan Oil Firsts: • First oil well in the world was drilled (not dug by hand) in 1848 in Baku in Bibi Heybat oil field • In 1897 -1907 the 1 st largest oil pipeline in the world was built from Baku to Batumi - 883 km x 20 sm • In 1900 Azerbaijan produced more than 50% of world’s oil – 11. 4 million tons • About 80% of oil production during 2 nd world war in former USSR was made in Baku (peak production – 23, 5 million tons in 1941) • First offshore oil production in the world started in Azerbaijan (1924 – Bibi Heybat beach, 1947 – Oily Rocks in open sea) 2

150 year of hydrocarbon production 3

BP and Co-Venturers’ Interests in Azerbaijan Projects 4

BP and Co-Ventures' Interests in Azerbaijan Projects ACG Devon 5. 6% Itochu 3. 9% BTC Hess 2. 7% Itochu 3. 4% Chevron 8. 9% 8. 7% Statoil. Hydro 2. 5% Conoco. Phillips TPAO 6. 7% BP 34. 1% Exxon. Mobil 8. 0% 6. 5% TPAO SOCAR 25% Alov 5% Total 5% Eni Statoil. Hydro 8. 6% BP 15% 2. 5% Inpex SOCAR 10. 0% Chevron Hess 2. 4% 10. 3% Inpex 10. 0% SOCAR 40% BP 30. 1% Statoil. Hydro 15% Shah Deniz Statoil. Hydro SCPC BP 25. 5% TPAO SOCAR 9. 0% 10. 0% NICO 10. 0% Total 10. 0% Statoil. Hydro BP 25. 5% TPAO SOCAR 9. 0% 10. 0% LUKOil NICO 10. 0% LUKOil Total 10. 0% En. Cana 5% TPAO 10% Exxon. Mobil 15%

ACG Early Oil Project First oil Nov 1997 Current production 130 mbd gross Total investment $2. 2 bn Chirag platform Sangachal EOP terminal 6

ACG Full Field Development 5. 4 bn bbl gross • Peak production 1 mmbd gross • Total capital cost $25 bn gross • 2009 production forecast 701. 7 mmbd • Project start-up dates: – – – EOP Central Azeri West Azeri Gas injection East Azeri Phase 3 (DWG) ACG gross production 1200 1000 mbd • Recoverable volumes 800 Deepwater Gunashli 600 Nov 1997 Feb 2005 Dec 2005 May 2006 Oct 2006 Apr 2008 400 Azeri 200 0 2005 3 Chirag 2008 2011 2 2014 2017 1 2020 2023 2 7

BP Azerbaijan Vision Baseline: 2004 NREP, WREP End 2007 The Future Sangachal NREP, WREP, SCP, BTC, Rail Sangachal Chirag West Azeri Chirag Shah Deniz 1 East Azeri DWG Chirag COP Central Azeri / CWP GROWTH Capital Spend 2007: $9 m/day East Azeri Central Azeri / CWP Shah Deniz 1 GROWTH Capital Spend 2004: $12 m/day West Azeri Inam Alov Shah Deniz 2 Offshore: Chirag, CA/CWP, WA, SD, EA 10 operating platforms + projects People: 3000 BP staff + Agency 4000 BP staff + agency 2000 BP staff Infrastructure: • 2 export pipelines • Sangachal EOP Terminal • 4 export pipelines and rail • Expanded Sangachal terminal • 3 export pipelines • One of the biggest terminals in the world Production: 130 mbd • Oil over 600 mbd • Gas start-up • Oil 701. 7 mmbd in 2009 • Gas 415 mmscf/day in 09; peak 822 mmscf/day • Condensate peak of 58 mbd 8

Shah Deniz • • • Recoverable volumes (total) - 27. 1 tcf of gas (1050 mmbbl of condensate) Stage 1 peak production - 830 mmscfd (142 mboed) Total capital cost - $4 bn 2009 gas production forecast - 415 mmscfd 2008 condensate production forecast - 35 mbd • Project start-up dates : − − TPG 500 platform installed: First gas to Georgia: First gas to Turkey: April 2006 Dec 2006 Jan 2007 Jul 2007 BOTAS Stage 1 BTC SPA Decline Sales Georgia SPA Azerbaijan SPA 9

Sangachal Terminal 1992 2000 Sangachal Terminal 2002 2004 2005 2007 2001 2003 10

A Strategic Hub for the Caspian: HP-SD going to Azerbaijan BTC SCP ACG going to Azerbaijan Western Export Route LP going to Azerbaijan Third party export oil Northern Export Route SANGACHAL TERMINAL Potential (Oil) Operational (Oil) Third party Potential (Gas) Operational (Gas) 4” Produced Water 12 SD Phase I 26” SD Phase II 30” Oil from Azeri Inam Alov COP Deepwater Gunashli 24” Oil from Chirag 30” Oil from Azeri 11

Azerbaijan, Georgia, Turkey Pipelines Project Baku-Tbilisi-Ceyhan Pipeline Full capacity (2008) 1 mmbd BLACK SEA Length 1768 km Diameter 46/42/34” Gross Capex $3. 9 bn First tanker departed 4 th June 2006 Current BTC export capacity 750 mbd BLACK SEA South Caucasus Pipeline First gas Dec ‘ 06 Ultimate Capacity 20 bcma Length 690 km CASPIAN SEA Diameter 42” Gross Capex $1. 1 bn GEORGIA TBILISI CASPIAN SEA AZERBAIJAN BAKU TURKEY BAKU Sangachal TURKEY Erzurum CEYHAN MEDITERRANEAN SEA Turkey Azerbaijan Georgia 3000 m 2000 m 1700 1701 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 BTC Pipeline Route Profile (Distance in km) 400 300 200 1000 m Sea Level 12

Istanbul - the big issue behind BTC Black Sea Istanbul • Oil volumes shipped through Bosporus increasing every year (pipeline oil would have increased volume by 50%) • Oil tanker traffic increasing as a percentage of total transits through Bosporus Mediterranean Sea 13

Platforms Central Azeri West Azeri Shah Deniz TPG 500 East Azeri 14

BTC Ro. W Reinstatement Ceyhan Marine Terminal Georgia Pump Station Georgia The official inauguration BTC The official inauguration of of. BTC 15

First Tanker Loading 4 th June 2006: First Tanker Loading at Ceyhan Terminal was successfully completed. “British Hawthorn” sailed away with 592, 000 barrrels on board. 16

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