Russian oil firm Lukoil will acquire a 9.99% percent in the Shah Deniz offshore gas field in the Azerbaijan sector of the Caspian Sea from Malaysia’s Petronas and not 15.5% as agreed originally in October, as other partners in the field, BP and Socar, decided to exercise pre-emptive rights.

“In accordance with the new arrangements, the share acquired by LUKOIL is reduced from 15.5% to 9.99% with proportional decrease in the transaction value from $2.25 billion to $1.45 billion,” Lukoil said Friday. This means that Lukoil’s stake in the project will increase to 19,99% and not to 25,5% as previously expected.

“The conclusion of the amendments resulted from negotiations with the Shah Deniz project partners on the implementation of pre-emptive rights. The deal is expected to be closed in January 2022,” Lukoil said.

In a separate statement on Friday, Socar said it had agreed to buy a 4.35% stake from Petronas, increasing its total stake to 14.35%. Azeri news website said that BP, the operator of Shah Deniz, had also decided to acquire a 1.16% interest from Petronas for $168 million, increasing its ownership to 29.96%.

The transactions will mean Petronas’ exit from Shah Deniz field, in which it had bought its 15,5 percent stake from Statoil (now Equinor) in 2014.

The other parties in the project are TPAO (19%), NICO (10%), and SGC (6.7%).

The Shah Deniz field is located 70 kilometers southeast of Baku. Commercial production there began in 2006. In 2020, the Shah Deniz consortium extracted 18.1 bcm of gas and 3.6 million tonnes of gas condensate.

In 2018, the second stage of the project was launched, with annual production expected to reach 26 bcm of gas and 5 million tonnes of gas condensate. The gas is sold on the markets of Azerbaijan, Georgia, and Turkey. Since December 2020, gas from Shah Deniz is also delivered to Europe via a pipeline system.

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