Azernews.Az

Azerbaijan is one of the Caspian region's most important strategic export opening to the West, the U.S. Energy Information Administration (EIA) said in its report.

"Azerbaijan is an important current and future supplier of both oil and natural gas," EIA's Country Analysis Brief says.

According to BP, Azerbaijan's proven gas reserves amounted to 1.3 trillion cubic meters at early 2011.

Azerbaijan's future natural gas production increases are expected to come from the continued development of the gas condensate field Shah Deniz, EIA says.

Since the start of Shah Deniz production in late 2006 till the end of the third quarter of 2011 about 59.3 million barrels (7.49 million tonnes) of Shah Deniz condensate was exported to world markets.

The development consortium of Shah Deniz field which has a volume of reserves standing at 1.2 trillion cubic meters is now considering possible routes for exporting gas to Europe. In particular, the Southern Gas Corridor routes are being looked at.

The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants to the agreement are: BP (operator) - 25.5 percent, Statoil - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent. Peak production is forecast at over 8.6-9 billion cubic meters. Gas production may be brought up to 25 billion cubic meters per year under the second stage of development.

Azerbaijan's proven crude oil reserves are estimated at 7 billion barrels in January 2012, EIA reports with the reference to the Oil and Gas Journal (OGJ).

Oil production in Azerbaijan recorded an increase over the last few years and remained above the 1 million bbl/d mark in 2011, EIA said.

According to the EIA estimates, oil production in Azerbaijan increased from 288,000 barrels per day (bbl/d) in 2000 to 1.1 million bbl/d in 2010.

"Monthly data through December 2011 show that this year's production thus far has decreased slightly," the report said.