The Washington Post

Tuesday, July 6, 2010

By AIDA SULTANOVA

BAKU, Azerbaijan -- BP's embattled chief executive on Tuesday visited oil-rich Azerbaijan in a bid to assuage fears that his company may sell assets in the country to help pay for the clean-up of the Gulf of Mexico oil spill.

The one-day visit comes a week after Tony Hayward, who has been criticized for his handling of the devastating oil spill, traveled to Moscow to reassure Russia that the British energy company is committed to investments there.

While in Baku, Hayward met with President Ilkham Aliyev and "reiterated BP's commitment to Azerbaijan and continuing successful cooperation" with the government and the state-owned oil and gas company SOCAR, the British oil company said in a statement.

Hayward also oversaw the signing of an agreement defining the key commercial principles of a product-sharing deal between BP and SOCAR on two new offshore gas fields in the Caspian Sea.

The two fields, Shafag and Asiman, are estimated to contain up to 500 billion cubic meters of gas combined.

BP and SOCAR will operate the project on a parity basis, SOCAR's investment chief Vagif Aliyev told reporters in Baku. Exploration will take at least four years.

BP's three major projects in the Azerbaijan comprise an offshore oil field in the Caspian Sea; a 30 percent share in an export oil pipeline which goes to Turkey; and 25 percent in Shah Deniz, a massive Caspian Sea gas field.

Russia's Gazprom voiced an interest last month in BP's share in Shah Deniz, but the British company has so far ruled out any sale.

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AP Business Writer Nataliya Vasilyeva contributed to this report from Moscow.

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