Azerbaijan expects no sensational decisions by OPEC
Baku, Azerbaijan, Nov. 27
By Maksim Tsurkov - Trend:
Azerbaijan doesn't expect any sensational decisions from the upcoming December meeting of the Organization of the Petroleum Exporting Countries (OPEC), the country's energy minister Natig Aliyev told reporters Nov.27.
The OPEC meeting will be held December 4 in Vienna.
"No decisions can be expected in terms of oil production level, most likely, it [the production] will remain unchanged," Aliyev said. "The currently declared quota for production of 30 million barrels of oil per day significantly exceeds its daily consumption. In order for the oil prices to rise, OPEC should cut production, but it won't happen."
Due to the prolonged fall in oil prices things reached the point when OPEC asks countries outside the cartel to reduce production while leaving its own one at the same level. Saudi Arabia has openly stated that it doesn't want to lose its market position and invites all those who are not part of OPEC to reduce oil production in order to strengthen prices.
Since the beginning of the last fall in oil prices, some OPEC member countries have repeatedly asked their colleagues in the cartel to reduce production, because they incur huge losses due to sharp and prolonged twofold decrease of commodity prices.
"Even if Azerbaijan reduces oil production, it won't affect prices on the global market," the minister said. "In addition, such a decision will be made not by the state, but an international consortium of companies that develop the Azeri-Chirag-Guneshli block of fields.
The main oil output in Azerbaijan comes from Azeri-Chirag-Guneshli field. This offshore block produces Azeri Light oil with 0.15 percent sulfur and 35 degrees API.
The contract for the Azeri-Chirag-Guneshli development, with proven reserve of nearly 1 billion tons of oil, was signed in 1994. Shares in the contract are as follow: 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.