BAKU, Azerbaijan, June 29
By Leman Zeynalova – Trend:
To avoid an investment cliff edge in the Caspian Sea, future projects must be made lower-risk, lower-cost, higher-return and lower-carbon, Ashley Sherman, principal analyst on Wood Mackenzie’s Russia and Caspian upstream team, told Trend.
"The Caspian region – home to 6 million barrels of oil equivalent per day of liquids and gas production – has been near the forefront of the global energy sector since the 19th century. It is core to most of the majors and has a resource base that should be primed for longevity, he said.
Sherman noted that the landlocked region risks facing an upstream investment crisis in the 2020s. "This could shape the strength of hydrocarbon-dependent economies like Azerbaijan and Kazakhstan for decades to come. In our base-case view, marketed oil and gas production in the Caspian region will grow in the 2020s. This is largely because of phases that are commissioned or under execution at the dominant megaprojects. However, 2030 upstream development capital expenditure looks set to be less than half its 2019 level of almost US$20 billion (in 2021 terms)."
Prospective volumes remain high thanks to the quality of the subsurface, according to the analyst. "But the largest such opportunities face their own obstacles to commercialisation. This includes BP and SOCAR’s new, potentially giant, Shafag Asiman deepwater gas find in Azerbaijan."
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