OPEC forecasts increase of Azerbaijan’s oil output

By Aynur Jafarova

The Organization of the Petroleum Exporting Countries (OPEC) predicts Azerbaijan's oil production to increase by 20,000 barrels per day (bpd) and reach 0.9 million bpd in 2014.

In its Monthly Oil-Market Report for September published on Sept.10, OPEC said that the highest level of Azerbaijan's oil production in 2014 will be observed in the fourth quarter and amount to 0.93 million bpd.

The country's oil production will amount to 0.9 million bpd in the first quarter of the next year, 0.89 million bpd in the second quarter, and 0.9 million bpd in the third quarter.

OPEC predicts Azerbaijan's oil production to stand at 0.88 million bpd in 2013, which is 20,000 bpd less than in 2012. This is an upward revision of 10,000 bpd compared to the previous OPEC's Oil Market Report.

OPEC's estimations shows that during the first half of 2013, Azerbaijan's oil supply averaged 0.87 million bpd, a decline of 70,000 bpd compared to the same period a year earlier.

Production is expected to remain relatively steady in the second half of 2013 compared to the first half.

On a quarterly basis, Azerbaijan's oil supply in 2013 is seen to average 0.87 million bpd, 0.87 million bpd, 0.88 million bpd and 0.88 million bpd, respectively.

According to BP, the proven oil reserves of Azerbaijan amounted to 7 billion barrels as of early 2012. Oil production in the country amounted to 0.931 million bpd in 2011.

The main volume of oil produced in Azerbaijan falls on the ACG offshore field. This area produces Azeri Light oil with a sulfur content of 0.15 percent (35 degrees API).

The giant ACG block of oil fields has been producing since 1997. The production started from the Chirag section of the field and it still continues successfully, this was followed by Azeri Project - Central Azeri production started in February 2005, West Azeri started in December 2005, and East Azeri came on stream in October 2006 with the Deepwater Gunashli section starting production in April 2008. The next step of ACG development - Chirag Oil Project (COP) is expected to begin production later this year. To date the field has produced about 2.2 bn barrels of oil.

Equity participation in the contract on ACG is distributed as follows: BP (operator) - 35.78 percent, Chevron - 11.27 percent, Inpex - 10.96 percent, AzACG - 11.65 percent, Statoil - 8.56 percent, Exxon - 8 percent, TPAO - 6.75 percent, Itochu - 4.3 percent, and ONGC - 2.72 percent.