Falling oil prices increase investments in well drilling in Azerbaijan

Oil&Gas Materials 11 April 2016 19:13 (UTC +04:00)

Baku, Azerbaijan, Apr. 11

By Maksim Tsurkov - Trend:

Continuous decline in oil prices is causing more drilling works at Azerbaijan's offshore oil and gas fields thanks to reduction in the contract works' costs, a source in the oil and gas industry told Trend Apr. 11.

Prices for services of the companies engaged in drilling have declined by 3 to 4 times recently, which caused favorable conditions for increasing the volume of drilling, said the source.

"Often customers refuse to purchase services from contractors at the previous - high - prices. Fearing to lose the customer's order, the service companies are forced to accept the low prices," added the source. "For example, the drilling work within such largest projects as Shah Deniz and Azeri-Chirag-Guneshli has increased noticeably."

Oil prices began to decline globally in July 2014, falling from $110 per barrel by almost three times and now the prices don't exceed $42 per barrel. In January 2016, prices for Brent oil fell to $27.72 per barrel against the backdrop of sanctions removal on Iran.

Azerbaijan produced 10.5 million tons of oil in Q1 2016, versus the forecasted 9.9 million tons.

Eighty-two percent of the produced oil accounted for the Azeri-Chirag-Guneshli block of oil and gas fields and the Shah Deniz gas and condensate field.

Azerbaijan produced 7.5 billion cubic meters of gas in Q1 2016, exceeding the forecasts by 197 million cubic meters.


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