SOFAZ: Production cuts at Azeri Chirag Guneshli lead to reduction of profit oil volumes
Azerbaijan, Baku, Oct. 16 /Trend E.Ismayilov/
Cuts in profit oil volumes at the Azeri Chirag Guneshli oil and gas field block in the Azerbaijani sector will lead to a profit decrease of the State Oil Fund of Azerbaijan (SOFAZ), SOFAZ reported to Trend on Tuesday.
"In this regard, revenues from oil and gas are the main source of income for SOFAZ. A fall in production volumes at Azeri Chirag Guneshli will lead to a decrease in profit oil volumes distributed between the states and contractors on development and exploration of this field," SOFAZ noted.
SOFAZ stated that cuts oil volume profit within the project is linked directly with the decrease in income from profitable oil which falls to the government share (considering that the most part of the income belongs to the government).
The fund emphasised that due to the failure of the Azerbaijan International Operating Company (AIOC)'s forecast for oil production, the State Oil Fund underpaid 8.1 billion dollars.
Previously during his speech at a meeting of Cabinet of Ministers on the results of social and economic development in the republic for the first nine months of 2012, Azerbaijani President Ilham Aliyev said that serious mistakes by the international consortium (AIOC) with BP as an operator led to a sharp decline in oil production at the Azeri and Chirag fields. As a result, the volume of summary underpaid income of Azerbaijan amounted to $8 billion.
The contract on the Azeri-Chirag-Guneshli full field development was signed in 1994.
Participants of the project to develop Azeri-Chirag-Guneshli are: BP (operator - 35.83 per cent), Chevron (11.27 per cent), Inpex (10.96 per cent), AzACG (11.6 per cent), Statoil (8.56 per cent), Exxon (8 per cent), TPAO (6.75 per cent), Itocu (4.3 per cent) and Hess (2.72 per cent). Hess has sold its share to Indian ONGC and the transaction will be completed in the first quarter of 2013.