BAKU, Azerbaijan, April 13. The International Energy Agency (IEA) shared forecasts and information on oil production this week, Trend reports.
According to estimates, Azerbaijan's oil production could hit 620,000 barrels per day next year.
The IEA predicts that Azerbaijan's oil output will reach 620,000 barrels per day in 2024: 600,000 barrels per day in the first quarter, 610,000 barrels per day in the second quarter, 620,000 barrels per day in the third, and 630,000 barrels per day in the fourth quarter. In 2023, the average daily production rate was 620,000 barrels.
In March of this year, Azerbaijan's average daily oil production was 480,000 barrels, compared to projections of 550,000 barrels. At the same time, the March indicator remained unchanged from February, according to the IEA.
Furthermore, the US Energy Information Administration (EIA)
predicted that Azerbaijan's oil production will reach 640,000
barrels per day in 2025, with an average of 600,000 barrels per day
in 2024.
According to EIA predictions, Azerbaijan's oil output will hit
600,000 barrels per day in the first quarter of 2024, then
stabilize around 610,000 barrels per day in the fourth quarter.
The same week, OPEC revealed its projection for Azerbaijan's liquid
hydrocarbon production in 2024, which will increase by nearly
14,000 barrels per day to 700,000 barrels per day.
This expansion is expected to be driven in part by projects such as
Shah Deniz, Absheron, and Umid Babek, as well as increased
production from the Azeri-Chirag-Gunashli (ACG) block of oil fields
following the commissioning of the seventh ACG platform.
Azerbaijan's Ministry of Energy announced this week that average daily oil and condensate output in Azerbaijan will grow to 605,000 barrels in March 2024, up from 598,000 in February.
This output included 481,000 barrels of crude oil (476,000 barrels in February) and 124,000 barrels of condensate.
According to an agreement agreed at the 36th meeting of OPEC Plus ministers, Azerbaijan's crude oil output limit for 2024 is 551,000 barrels per day.
According to Ministry of Energy data, 588.9 million tons of oil were produced over the full development period at the ACG field block from November 1997 to April 1, 2024 (the total forecast reserves of ACG are estimated to reach one billion tons).
The Shah Deniz field produced approximately 45.6 million tons of condensate between December 2006 and April 1, 2024 (the development era). In general, Shah Deniz's condensate reserves could surpass 200–240 million tons.
The Ministry of Energy also reported that 7.3 million tons of oil (including condensate) were produced in Azerbaijan from January to March 2024, 5.2 percent less than the same period in 2023 (7.7 million tons). SOCAR oil outside international contracts accounts for 1.9 million tons of the stated volume (the number has not changed), and the ACG block has seen a decrease.
Due to a decline in oil output, the amount of crude oil refining at Heydar Aliyev Baku Oil Refinery in the first quarter of 2024 decreased by 5.9 percent compared to the same time in 2023, reaching 1.6 million tons.
Geopolitical risks strongly influence global oil prices and supplies, Acting Chief Trading Officer at SOCAR Trading (the trading house of the State Oil Company of Azerbaijan), Taghi Taghi-Zada said on the sidelines of a meeting of global trading companies (Commodities Global Summit 2024) in Lausanne.
"The oil market is expected to remain tense in the short term due to world conflicts, geopolitical pressure, and logistical disruptions. There are many uncertainties (regarding crude oil)," noted Taghi-Zada.
The unstable situation with oil prices is affecting a number of takeover deals around the world. Thus, this week it became known that the ADNOC state-owned company (UAE) discussed the possibility of taking over bp and consulted with investment banks about a potential deal but postponed it for commercial reasons.
As for the gas market, the situation with gas production, for example, in Azerbaijan is positive; growth for the quarter was 3.3 percent to 12.6 billion cubic meters.
At the same time, during the reporting period, 6.9 billion cubic meters of gas were produced from the Shah Deniz field (an increase of 3 percent), 400 million cubic meters of natural gas from the Absheron field (there is no comparison since production has been carried out since July 2023), and 3.3 billion cubic meters of associated gas from the ACG block (at the level of the first quarter of 2023).
According to the Ministry of Energy, 216 billion cubic meters of natural gas were produced from the key Shah Deniz field over the entire period of its operation (from December 2006 to April 1, 2024).
From 2007 (beginning of exports) until April 1, 2024, 153.4 billion cubic meters of gas were exported to world markets from this field.
It also became known that the JOCAP company (Joint Operating Company of Absheron Petroleum B.V.) produced 400 million cubic meters of gas and 140 thousand tons of condensate from the Absheron gas condensate field in the Caspian Sea in January–March 2024. Let us remind you that hydrocarbon production at this field has been ongoing since July 10, 2023. In 2023, JOCAP produced 800 million cubic meters of natural gas and 300,000 tons of condensate from Absheron.
Azerbaijani Energy Minister Parviz Shahbazov wrote on his X page that Azerbaijan exported 6.4 billion cubic meters of gas from January through March 2024, compared to 6.5 billion cubic meters for the same period in 2023. Of the total volume in the first quarter of 2024, 3.2 billion cubic meters of gas were exported to Europe, 2.3 billion cubic meters to Türkiye and 900 million cubic meters to Georgia.
At the Budapest Liquefied Natural Gas (LNG) Summit on April 9–10, Deputy Vice President of the State Oil Company of Azerbaijan (SOCAR) Vitaly Beglyarbekov stated that Azerbaijan intends to increase gas exports to Europe by about 17 percent by 2026 compared to current levels.
According to him, supplies to Italy, Greece, and Bulgaria will increase even more, while in general, Azerbaijan plans to export about 14 billion cubic meters of gas to the countries of South-Eastern Europe in two years, compared to 12 billion cubic meters last year.
The same week, it was revealed that Vladimir Malinov became the new Minister of Energy of Bulgaria, leaving his previous post as General Director of Bulgartransgaz, which he had held since 2018.
Malinov named the development of gas infrastructure, together with neighboring Greece, as one of his priorities.
It has been revealed that the new liquefied natural gas (LNG) terminal in Alexandroupolis, Greece, will begin commercial operations at the end of April 2024. This LNG terminal, with a capacity of 5.5 billion cubic meters of gas per year, will be the second in Greece after the Revithoussa terminal. Its shareholders include companies from Bulgaria and the US.
The European Commission (EC) is focusing its attention on gas supplies to the EU, which announced another survey on April 11 regarding the prospects for the development of a mechanism for joint procurement of energy resources, which is designed to assess market participants' interest in the development and procurement of long-term products, specifically gas and low-carbon products.
Gas is a raw element used to make fertilizer. Azerbaijani companies involved in fertilizer production and transportation will attend Argus Media's international conference Fertilizer Caspian, Black Sea, and Eastern European Markets, which will be held in Istanbul on September 18–20 and will attract over 400 participants from more than 40 countries.