Thursday July 25 2024

Production at Shah Deniz gas condensate field to increase in 2021

12 January 2021 12:18 (UTC+04:00)
Production at Shah Deniz gas condensate field to increase in 2021

By Ayya Lmahamad

Production at the Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea is expected to increase in 2021, Azertag reported with reference to the draft budget of the State Oil Fund for 2021.

According to the draft budget, 21.3 billion cubic meters of natural gas and 32.5 million barrels of condensate are expected to be produced from Shah Deniz field this year. It should be noted that these figures resulted to 18.4 billion cubic meters and 29.2 million barrels, respectively, last year.

Moreover, oil production in the Azeri-Chirag-Guneshli block of fields is expected to decline to 171.6 million barrels in 2021. Oil production at these block of fields amounted to 174.6 million barrels and 195 million barrels in 2020 and 2019 respectively.

Furthermore, revenues of the State Oil Fund are projected at $446.9 million in 2021. The expected figure is by AZN 369.4 million ($217.2M) more than the forecast for 2020, and by AZN 2.8 billion ($1.6bn) less than in 2019.

In the meantime, planned bonus payments to investors in connection with the signing or implementation of oil and gas agreements are expected to amount to $465.5 million.

Additionally, in 2021, the share of assets in the State Oil Fund's investment portfolio in U.S. dollars is projected at 65 percent, 20 percent in euros, 5 percent in British pounds and 10 percent in other currencies.

SOFAZ was established in December 1999 by the Presidential Decree and is a sovereign wealth fund of Azerbaijan, which accumulates and preserves the nation's oil and gas revenues for future generations. The fundamental mission of SOFAZ is to ensure intergenerational equality with regard to the country's oil wealth and to accumulate and safeguard the oil revenues for generations to come.

The Fund accumulates income from the sale of oil contracts, and in 2003 it started to make transfers to the state budget of Azerbaijan. As for now, SOFAZ contribution to the country’s GDP is over 80 percent.

The contract on development of Shah Deniz gas field was signed in 1996. Shareholders of Shah Deniz project are: BP (operator, 28.8 percent), TPAO (19 percent), SOCAR (16.7 percent), Petronas (15.5 percent), LUKOIL (10 percent) and NICO (10 percent).

The contract for the development of the ACG oil fields was signed on September 20, 1994, and entered force in December. The contract for the development of the ACG block was extended to 2050 in September 2017. The shareholders in the ACG project are BP (operator, 30.37 percent), SOCAR (25 percent), American Chevron (9.57 percent), ExxonMobil (6.79 percent), Indian ONGC (2.31 percent), Japanese Inpex Corp. (9.31 percent), ITOCHU Oil (3.65 percent), Norwegian Statoil (7.27 percent) and Turkish TPAO (5.73 percent).


Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad

Follow us on Twitter @AzerNewsAz

Latest See more