BP 'not under threat' of contract termination

The Azerbaijan government has reportedly denied that there is any threat to BP's contract following remarks made by the head of state about disappointing production figures.

Azerbaijan News Agency reported on Monday, October 15th that there was "no threat of termination of contracts with foreign oil companies in Azerbaijan."

It cited as its source the Azerbaijan Minister of Industry and Energy, Natiq Aliyev, who said: "The statements of the head of state about the need to take measures and adoption of these measures voiced in relation to BP over the drop in oil production on Azeri-Chirag-Guneshli field do not contain any threat in relation to foreign oil companies.

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"There is no threat of termination of the contracts with the companies. In this case, the matter is about measures that must be taken to stabilise oil production on Azeri-Chirag-Guneshli field," he concluded.

This follows a report in The Telegraph of a dramatic televised attack on the company last week by the President of Azerbaijan, Ilham Aliyev. He said, that the oil major made "grave mistakes" that had resulted in an $8.1bn (£5bn) shortfall in the government's revenues and went on to threaten "serious measures."

The embattled company was accused of failing to meet its output targets at the giant Azeri-Chirag-Guneshli oil field in the country, which accounts for 4% of its global oil production.

The spat highlights the political risk of dealing with repressive regimes in the hunt for oil.

CM