Baku, Azerbaijan, May 18
By Leman Zeynalova – Trend:
Gas will replace oil as Azerbaijan’s main export, Trend reports citing Moody’s Investors Service.
“The mix of hydrocarbon production and exports will shift towards gas, with total hydrocarbon revenue likely to decline when oil reserves are eventually exhausted,” reads a report released by Moody’s.
Moody’s expects hydrocarbon production to remain significant in Azerbaijan for at least another two to three decades.
“Based on estimates by the Organization of the Petroleum Exporting Countries (OPEC), Azerbaijan has roughly 25-30 years of oil production and 70 years of gas production left at current levels of production. These estimates may change, with new discoveries in the energy-rich Caspian Sea, or if reinvestment and progress in drilling technology allow producers to extract more hydrocarbons from a reservoir,” said the report.
Moody’s believes oil production has peaked with the Azeri-Chirag-Gunashli field in decline, even with ongoing reinvestment and the construction of a new platform with the extension of the production sharing agreement through 2049.
“While we think Azerbaijan can continue to ramp up gas production over the medium term, we do not think that lost oil revenue will ever be fully replaced by gas production and exports, given that oil currently accounts for more than 90 percent of total hydrocarbon exports, and gas margins are generally lower compared to oil,” said the report.
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