Azernews.Az

By Kamila Aliyeva

The decisions to reduce oil production by both OPEC and non-cartel nations were reasonable, said Natig Aliyev, Azerbaijan’s Energy Minister.

“Three months passed since the beginning of the year and we already feel stability of oil prices in the global market. We will continue this way,” he said adding that “a monitoring group was established and it analyzes how the decision is being fulfilled.”

In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

Non-OPEC producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 bpd starting from January 1, 2017 for six months, extendable for another six months, to take into account prevailing market conditions and prospects.

The participation of Azerbaijan in joint oil production cuts is defined at 35,000 barrels per day.

The Joint Technical Committee was created January 22 under the OPEC Monitoring Committee, designed to monitor the implementation of countries’ obligations to cut oil production.

The minister added that relatively stable prices are observed in the global oil market this year. “We can compare this with 2016, when oil prices in the world market dropped to $30 per barrel. We knew that this would cause a serious harm to the economy,” Report quoted the minister as saying.

Aliyev noted that big fluctuations in oil prices will not benefit anyone and thus “we want oil prices to remain stable.”

The price of $60 per barrel satisfies both consumers and producers, according to the minister.

Aliyev also stressed importance of predictability of upward and downward trends in oil prices although it depends on economic factors.

“New decisions based on reports of the Monitoring Group may be taken after Vienna meeting of OPEC and non-OPEC countries in May,” the minister stated, noting that new proposals such as keeping oil output at the same level or taking additional measures may be voiced.

“As an oil producing country we are interested in the stability of oil prices,” he said noting that oil $60 will bring a significant benefit to Azerbaijan.

Energy-rich Azerbaijan produces three grades of crude oil - Azeri BTC, Azeri Light, and Urals. The price of a barrel of Azeri Light crude oil increased $0.31 to stand at $54.71 on the world markets on April 6.

The country’s oil output in March 2017 amounted to 733,300 barrels, 40,000 barrels of which accounted for condensate.

The volume of daily production in February amounted to some 776,400 barrels, while the volume of daily export at 604,100 barrels of oil with some 50,000 barrels accounting for condensate and 26,800 barrels fall to a share of oil products. This January, the volume of daily production amounted to some 793,900 barrels, while the daily export was 617,000 barrels.

Prior to the landmark deal, the volume of production in the country was at the level of 37.72 million tons of oil, while daily output stood at 829,100 barrels. Oil production of the country in 2017 is forecasted to stand at 39.797 million, while average daily oil production will amount to 800,000-807,000 barrels.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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