By Ofeliya Afandiyeva
OPEC (Organization of the Petroleum Exporting Countries) forecasts average daily oil production in Azerbaijan for 2020 at the level of 700,000 barrels, local media reported citing OPEC Monthly Oil Market Report published on April 16.
“For 2020, due to planned maintenance at the Chirag oil field and Shah Deniz gas-condensate field and considering the agreed voluntary adjustment, Azeri production is forecast to decline by 90,000 to average 700,000 barrels per day (bpd),” the statement said.
According to the provided data in the report, Azerbaijan’s liquids output in February fell by 20,000 bpd month to month to average 780,000 bpd, lower 50,000 bpd year-on-year. Crude oil production fell by 11,000 bpd to average 66,000 bpd, while NGLs (natural gas liquids) and condensates also dropped, falling by 8,000 bpd to average 120,000 bpd. For 2019, Azerbaijan’s oil production is estimated to have declined by 20,000 bpd to average 790,000 bpd.
As reported recently, the OPEC and non-OPEC countries on April 12, 2020 during a video conference approved a deal to collectively reduce daily oil production in three stages from May 1, 2020 to April 2022. Along with it, at the first stage (in May-June 2020), the decrease in OPEC + countries will amount to 9.7 million bpd.
Within the framework of the agreements, Azerbaijan undertook to reduce oil production excluding condensate from the indicator of October 2018 – 718,000 bpd.
From May-June 2020, Azerbaijan's oil production will increase by 23 percent or 164,000 bpd - to 554,000 bpd, in July-December 2020 - by 18 percent or 131,000 bpd - to 587,000 bpd, from January 2021 to April 2022 - by 14 percent or 98,000 bpd - to 620,000 bpd.
Earlier, citing BP’s Vice President for Communications, External Affairs and Strategy in Azerbaijan, Georgia and Turkey, Bakhtiyar Aslanbeyli, it was reported that in the second half of 2020, BP plans to shut Alfa platforms in Chirag and Shahdeniz fields in the Azeri-Chirag-Guneshli (ACG) block.
Note that crude oil prices collapsed in March 2020, recording their deepest monthly drop since the global financial crisis in 2008. The ramifications of the COVID-19 pandemic were the main driving force, resulting in unprecedented worldwide oil demand shock and massive sell-offs in the global oil markets, amid a significant crude surplus.
It should be noted that the price of Azeri LT produced at the Azeri-Chirag-Deepwater Gunashli (ACG) oil field amounted to $20.26 per barrel on April 15, which is $2.32 less compared to April 14. At the same time, the price of Azeri LT FOB Ceyhan amounted to $19.16 per barrel on April 15, which is $2.31 less compared to April 14.
Azerbaijan has been producing Azeri LT since 1997 and exporting via the Baku-Tbilisi-Ceyhan (BTC) and Baku-Supsa Western Export Pipeline, as well as by rail, to the Georgian port of Batumi.
Azerbaijan also sells its URALS oil from the Russian Black Sea port of Novorossiysk, delivering through the Baku-Novorossiysk oil pipeline.
The price of URALS with shipment from the port amounted to $15.78 per barrel on April 15, which is $2.68 less compared to April 14.
The cost of a barrel of Brent Dated oil, produced in the North Sea, amounted to $18.08 per barrel, indicating a decrease of $2.58.
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