BAKU, Azerbaijan, February 19. Caspian Drilling Company (CDC, main shareholder - SOCAR) has purchased a semi-submersible drilling rig (SSDR) "Explorer" from Noble International Oilfield Services Corporation, an informed source told Trend.
According to him, this SSDR will be delivered to Azerbaijan by the end of the year and will be involved in Caspian projects.
CDC will prepare the Satti jack-up rig for operations in the Caspian Sea's Turkmen section, an informed source exclusively told Trend. The Satti rig, leased by the CDC from the Kazakh KMG Drilling & Services company for exploratory drilling in the Azerbaijani sector of the Caspian for bp from 2020 through 2023, will undergo minor adjustments and will be sent to drill in the Turkmen sector of the Caspian this summer.
According to the forecasts of Rystad Energy, a leading analytical consulting group, in 2024 Azerbaijan may export 25-25.5 bcm of gas against 23.8 bcm in 2023, of which more than 12 bcm is intended for EU consumers, with about 10 bcm addressed to Italy.
Total Azeri-Chirag-Gunashli (ACG) production for the full 2023 was on average about 363,000 bpd (about 133 million barrels or 18 million tonnes in total) compared to 415,400 bpd in 2022, Trend reports, referring to bp.
In 2023, bp and its co-venturers spent about $504 million in operating expenditure on the Azeri-Chirag-Gunashli (ACG) block of fields offshore Azerbaijan, as compared to $470 million in 2022, as said bp. This is while capital expenditure on ACG activities last year stood at $1.518 billion, as compared to $1.624 billion, showing a percent 6.5 decrease year-on-year.
During 2023, the Sangachal terminal exported about 230 million barrels of oil and condensate, while in 2022, the Sangachal terminal exported more than 232 million barrels of oil and condensate, as Trend reports, referring to bp. This included about 229 million barrels through Baku-Tbilisi-Ceyhan (BTC) and around 1 million barrels through the Western Route Export Pipeline (WREP).
In 2023, Baku-Tbilisi-Ceyhan (BTC) Co. spent about $120 million in operating expenditure and $46 million in capital expenditure, as compared to $100 million and $27 million in 2022, according to bp.
In 2023, the Shah Deniz field produced about 26 billion standard cubic meters of gas and more than 4 million tonnes (about 35 million barrels) of condensate in total from the Shah Deniz Alpha and Shah Deniz Bravo platforms. In 2022, the field produced about 25 billion standard cubic meters (bscm) of gas and more than 4 million tonnes (about 36 million barrels) of condensate.
In 2023, bp and its co-venturers spent around $2.194 billion in operating expenditure and around $892 million in capital expenditure on Shah Deniz activities, the majority of which was associated with the Shah Deniz 2 project. This is while in 2022, Shah Deniz spent around $2.281 billion in operating expenditures and around $463 million in capital expenditures.
In 2023, the South Caucasus Pipeline (SCP) spent around $77.7 million in operating expenditure and about $13.8 million in capital expenditure in total, as compared to $72 million and $5 million in 2022, respectively, as bp states.
On average, 71 million standard cubic meters (about 2,515 million standard cubic feet) of Shah Deniz gas was sent from the Sangachal terminal daily during the year 2023, as compared to 68 million standard cubic meters (about 2,416 million standard cubic feet). Gas is exported via the South Caucasus Pipeline (SCP), including the SCP expansion system, and via Azerbaijan’s pipelines connecting the terminal’s gas processing facilities with Azerigas’s national grid system.
"The daily capacity of the terminal’s processing systems is currently 1.2 million barrels of crude oil and condensate, and about 81 million standard cubic meters of Shah Deniz gas, while overall processing and export capacity for gas, including ACG-associated gas is around 100 million standard cubic meters per day," bp's report reads.
During 2023, the Azeri-Chirag-Gunashli (ACG) delivered an average of around 5.5 million cubic meters per day of ACG-associated gas to the state of Azerbaijan (2 billion cubic meters in total), primarily at the Sangachal terminal but also to SOCAR’s Oil Rocks facility. This is while in 2022, ACG delivered an average of around 7 million cubic meters per day of associated gas to the state of Azerbaijan (2.6 billion cubic meters in total).
In January 2024, Azerbaijan increased gas production by 30 million cubic meters, said Minister of Energy of Azerbaijan Parviz Shahbazov. During this period, 2.3 billion cubic meters of gas were exported out of a total of 4.3 billion. In addition, the minister stressed that oil production for January amounted to 2.5 million tons, of which 2.1 million tons were sent for export. In January, gas exports increased by about 4.5 percent compared to January 2023. At the same time, 1.1 billion cubic meters were exported to Europe, 0.8 billion cubic meters to Türkiye, and 0.4 billion cubic meters to Georgia. During this period, 0.4 billion cubic meters of gas was delivered to Türkiye via the Trans-Anatolian Pipeline.
The Azerbaijani Ministry of Energy released the Caspian Sea fields where gas was generated and the level of production as of January 2024. Thus, 2.4 billion cubic meters (bcm) of gas were produced from the Shah Deniz field, 1.1 bcm from the Azeri-Chirag-Gunashli (ACG) block of fields, 130 million cubic meters from the Absheron field, and 700 million cubic meters were extracted by oil and gas production departments and joint ventures of the State Oil Company of Azerbaijan (SOCAR).
Since the Shah Deniz field was commissioned, a total of 211.4 billion cubic meters of gas have been extracted. In terms of associated gas from the ACG, the total volume produced during the development of this block of fields (since 1997) was 217.4 billion cubic meters. Gas production from the Absheron field started on July 10, 2023.
Azeri-Chirag-Gunashli (ACG) block of fields offshore Azerbaijan has produced 4.3 billion barrels of oil since the start of commercial development in November 1997 till the end of 2023, Trend reports, referring to bp.
Shah Deniz giant gas and condensate field in Azerbaijan has produced 209 billion cubic meters of gas since the start of commercial development in 2006 till the end of 2023
The field’s condensate production during this period stood at 45 million tons.
Azerbaijan's Energy Ministry has published data on oil production and exports together with condensate. Thus, in January 2024, out of more than 2.5 million tons of oil produced together with condensate, 1.4 million tons of oil was produced from Azeri-Chirag-Guneshli (ACG) block of Caspian fields, 0.7 million tons of oil together with condensate was produced by oil and gas producing departments and SOCAR JV, 0.4 million tons of condensate was produced from Shah Deniz field and 50,000 tons of condensate was produced from Absheron field. Out of the mentioned total production in January 2024, 2.1 million tons of oil together with condensate were exported (1.8 million tons - by the consortium led by bp, 0.3 million tons - by SOCAR), and the remaining volume was sent for refining.
A total of 631 million tons of oil and condensate have been extracted from the key Caspian Sea fields - Azeri-Chirag-Gunashli (ACG) block of fields and the Shah Deniz field since their commissioning until February 1, 2024. The Azerbaijani Ministry of Energy data showed that 586 million tons of oil have been produced from the ACG since the autumn of 1997. Besides, 45 million tons of condensate have been produced from the Shah Deniz field since December 2006. Of this volume of liquid hydrocarbons from these key international projects in Azerbaijan, as of February 1, 2024, 629 million tons of oil and condensate were exported. The main route for the export of these hydrocarbons is the Baku-Tbilisi-Ceyhan oil pipeline.
OPEC forecasts Azerbaijan's liquid supply to increase by around 20,000 b/d, reaching an average of 0.7 mb/d. According to the latest forecast from OPEC, this growth is expected to be driven, in part, by the Shah Deniz, Absheron, and Umid-Babek gas condensate projects. Additionally, the introduction of a seventh Azeri-Chirag-Gunashli (ACG) platform is anticipated to boost production in Azerbaijan's ACG oil fields during the year, the organization noted.
In Azerbaijan's average daily production of hydrocarbons in oil equivalent, gas will account for 60 percent and oil for 40 percent in 2030, Trend reports, referring to Rystad Energy.
"If in 2010 gas accounted for less than 300,000 barrels per day in oil equivalent (less than 15 percent of total hydrocarbons), this figure will more than double in 2030," the company reckons.
Meanwhile, a considerable rise in gas production began in 2018 and is expected to reach an average daily peak of 600,000 barrels of oil equivalent in 2029-30. Rystad Energy attributed the increase in Azerbaijan's gas production to an increase in gas exports. According to this company's predictions, Azerbaijan's oil and condensate production will likely be between 500 and 600,000 barrels per day by 2030.
Gas production from the Caspian Shah Deniz field peaked at 26 billion cubic meters per year in 2023, and bp will try to maintain this level for several years, the company's Vice President for the Caspian region, Communications and External Affairs Bakhtiyar Aslanbayli told an Azerbaijani TV channel.
“In 2023, 26 billion cubic meters of gas (72 million cubic meters per day) and four million tons of condensate were produced at the Shah Deniz field. Now this is actually the maximum limit of possibilities, that is, we have reached the peak of gas resource production. In the following years we'll try to maintain this level,” Aslanbeyli noted.
Azerbaijan has significant gas potential, and bp, along with other gas producers operating in the country, hopes that Azerbaijan will conclude new contracts with European buyers to supply new volumes of gas within a "reasonable timeframe", Aslanbeyli said.
Azerbaijan's gas production in January 2024 amounted to 4.253 bcm, which is 0.6 percent more than in January 2023, Trend reports, referring to the State Statistics Committee. Marketable gas (gas for consumer use) represented 3.27 billion cubic meters of this amount, a 4.2 percent increase over the January 2023 level. Whereas Azerbaijan generated 48.497 billion cubic meters of gas in 2023, 3.8 percent higher than in 2022. At the same time, marketable gas production reached 36.414 billion cubic meters (a 4.2 percent increase). Azerbaijan's gas production in 2024 is expected to reach 49.1 bcm, with 36.8 bcm potentially marketable.
In January 2024, Azerbaijan's oil and condensate production reached 2.468 million tons, reflecting an 8.3 percent decrease compared to January 2023. Data from the State Statistics Committee indicates that, of the mentioned volume, 2.463 million tons comprised marketable oil, including condensate, marking an 8.3 percent decrease compared to January 2023. In 2023, oil and condensate production in Azerbaijan totaled 30.19 million tons, which is 7.5 percent less than in 2022. A target of 29.5 million tons is set for the year 2024.
In January 2024, the Baku-Tbilisi-Ceyhan (BTC) pipeline transported 2.486 million tons of oil, representing a 1.9 percent decline from January 2023. Based on the above committee's figures, Azerbaijani oil accounted for 82.7 percent of the transported volume, or 2.055 million tons, representing a 5 percent decline. In January 2024, the BTC pipeline permitted the transportation of 430,800 tons of oil from Kazakhstan and Turkmenistan combined, representing a 16.2 percent increase over the same time in 2023. In 2023, the BTC pipeline transported 30.192 million tons of oil, a 1.5 percent increase, with transit oil from Kazakhstan and Turkmenistan accounting for 5.24 million tons, a 2.7 percent increase.
Gas exports from the Shah Deniz field in January 2024 amounted to 1.878 bcm, which is 0.9 percent less than in January 2023. According to the State Statistics Committee of Azerbaijan, gas exports from Shah Deniz field accounted for 48.5 percent of the total volume of gas transported through main gas pipelines.
Azerbaijan generated 2.4 billion kWh of power in January 2024, Trend reports, referring to the Ministry of Energy. This number is 13 percent lower than the figure from January 2023. Azerenerji OJSC, the country's largest electrical power producer, generated 2.166 billion kWh, while power plants overseen by Azerbaijan's State Energy Service of the Nakhchivan Autonomous Republic produced 30.4 million kilowatt-hours of total output. Thermal power plants generated 2.23 billion kWh of the country's total electricity production, representing a 62.2 million kWh increase from January 2023.
In January 2024, Azerbaijan decreased electricity exports by 77.3 percent compared to January 2023, reducing it to 116.3 million kWh, Trend reports, referring to the Ministry of Energy. At the same time, power imports rose by 75.9 percent to 19 million kWh. Azerenerji OJSC, the country's largest power producer, stated that in January, there was a seasonal energy exchange between Azerbaijan and neighboring countries in accordance with existing agreements, which impacted electricity export-import data.
Azerbaijan's oil production reached 0.47 million bpd in January 2024 versus 0.48 million bpd in December 2023, according to the International Energy Agency (IEA).
bp's Vice President for the Caspian region, Communications and External Affairs Bakhtiyar Aslanbayli revealed the details of the decision to conduct four-dimensional (4D) seismic exploration on the Azeri-Chirag-Gunashli (ACG) block of fields, unprecedented for the Caspian Sea.
"The wells in the ACG block, where extraction has been ongoing since 1997, have become outdated, and the oil production rate is gradually decreasing. The productivity of the new reservoir (formation) of Fasila in the ACG was lower than anticipated. All this situation has made us conduct a more detailed study of the reservoir geology through the implementation of 4D seismic surveys during 2024–2028—a first for the Caspian region," Aslanbayli told an Azerbaijani TV channel.
The current capacity of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline allows it to transport oil from third countries, but the correct balance of the oil mixture is needed to prevent a negative impact on the high quality of BTC Blend - Azeri Light oil, Aslanbayli said.
The volume of transportation of Kazakh oil from the port of Aktau for export amounted to 287,000 tons in January 2024, which is 76,000 tons more compared to the same period last year, KazTransOil JSC told Trend. In particular, the volume of oil transportation towards the port of Baku from the port of Aktau increased by 60,000 tons and amounted to 116,000 tons. In addition, 171,000 tons of Kazakh oil were shipped toward the port of Makhachkala from the port of Aktau, which is 17,000 tons more compared to the same figure for January 2023.
The State Oil Company of Azerbaijan (SOCAR) will assist in the launch and supply of raw materials to the Tajik TK-Oil refinery, located in the Dangara Free Economic Zone in the Khatlon region of Tajikistan, Tajikistan's First Deputy Minister of Economic Development and Trade Zavki Zavkizoda said.
The Baku Oil Refinery, named after Heydar Aliyev, kept gasoline production constant, boosted jet fuel and bitumen production, and decreased production of gas oil, petroleum coke, and lubricating oils in January 2024, the State Statistics Committee of Azerbaijan said.
Azerbaijan provides an energy source that signifies diversification and security, said US Ambassador to Azerbaijan Mark Libby during a press conference. According to him, there is a lot of work to be done to extend the current infrastructure, notably in terms of Azerbaijan's role in facilitating the transit of energy resources from central Asia.
"Green and renewable energy sources, such as wind and hydrogen power, show potential, demanding investment, legal changes, and strategic planning—all areas where the US government and commercial sector may engage with Azerbaijan," the ambassador said.
Gas exports from Azerbaijan in January 2024 amounted to almost 1.932 bcm, which is 7.6 times more than in January 2023, said the Azerbaijani State Customs Committee. Azerbaijan's revenue from the export of declared gas in January 2024 amounted to $739.7 million (an increase of 5.3 times compared to the figure for January 2023). Gas supplies in the reporting period accounted for 40.12 percent of Azerbaijan's total exports.
Azerbaijan exported more than 1.46 million tons of oil in January 2024 (nomenclature code 2709), a 34.9 percent less year on year, Trend reports via the data from the State Customs Committee (SCC), based on customs declarations. Revenue from the export of declared volumes of oil made up $863.45 million in the reporting month (a 38.2 percent decrease from January 2023).
Azerbaijan's daily crude oil production in January 2024 (excluding condensate) averaged 474,000 barrels against the target of 551,000 barrels per day set for the country within the framework of the OPEC+ international deal, Trend reports, referring to the Azerbaijani Energy Ministry. Overall, the average daily oil production in the country in January (including condensate) amounted to 598,000 barrels, of which condensate accounted for 124,000 barrels per second.
The European Commission (EC) published the first medium-term tender under the AggregateEU platform for joint gas procurement, allowing purchasers to apply for gas for many six-month periods from April 2024 through October 2029, Trend reports via the EC statement. Following the short-term crises that Europe experienced in the previous two winters, the EC introduced a new service to pick buyers and sellers: the medium-term tender.
Supplies of natural gas from Azerbaijan through Türkiye will start in April this year, said Minister of Foreign Affairs of Hungary Péter Szijjártó in an interview with Turkish Anadolu Agency news company. When discussing natural gas deliveries from Azerbaijan to Hungary via Türkiye, Szijjártó stressed the signing of a contract for 275 million cubic meters.
Türkiye has become the largest customer of Azerbaijani gas in 2023. According to the State Customs Committee (SCC) of Azerbaijan, in 2023 gas exports to Türkiye amounted to 10.854 bcm, which is 58.4 percent more than the figure of 2022. Revenue from Azerbaijani gas exports to Türkiye in 2023 amounted to $3.68 billion, 66.7 percent more than the same figure for 2022.
Representatives of the State Oil Company of Azerbaijan (SOCAR) and its Trading House - SOCAR Trading will participate in the annual oil and gas conference for Middle East countries (Middle East Petroleum & Gas Conference, or MPGC), which will take place on May 21-22 in Dubai, Trend reports via an informed source.
SOCAR's drilling company SOCAR AQS will deploy new drilling rigs at sites in onshore Bibi Heybat and Gurgan-Deniz fields, an informed source told Trend.