BP Starts Drilling 5th Well In Azerbaijan

British oil giant BP PLC (BP) has started drilling the fifth well at its Shah Deniz gas condensate development in the Azerbaijan sector of the Caspian Sea, the company said Monday.

The drilling, which is expected to go to 6,500 meters and last 300 days, marks the start of stage 2 of the deposit.

BP and StatoilHydro (STL.OS) each hold a 25.5% stake in the Shah Deniz field. Azerbaijan 's state oil company SOCAR, OAO Lukoil (LKOH.RS), NICO, Total S.A. (TOT) and TPAO share the other 49%.

In 2007, the field's stage 1 produced a total of 3.1 billion cubic meters of gas, and 0.8 million metric tons of condensate. That is expected to rise to 7.7 billion cubic meters of gas and 1.9 million tons of condensate this year.

In total, the deposit holds proven reserves of 1.2 trillion cubic meters of gas and 240 million tons of condensate.