Review of oil and gas operations in Azerbaijan (Jan.-Aug. 2012)

Analysis Materials 15 October 2012 12:36 (UTC +04:00)

1. FEC

а) Oil and gas

Azerbaijan produced about 29.41 million tons of oil and gas condensate in January-August, which is 6.9 percent less than last year, the State Statistics Committee said.

Azerbaijan produced 45.37 million tons of oil in 2011compared to 50.83 million tons in 2010.

The bulk of oil in January-August fell to Azeri-Chirag-Guneshli and Shah Deniz, which are developed in cooperation with foreign partners.

Gas production amounted to 11.41 billion cubic meters in January-August, which is 5.7 percent more compared to the same period last year.

The country produced about 26 billion cubic meters of gas in 2011 compared to 26.23 billion cubic meters in 2010.

Geophysics and Geology Management of State Oil Company of Azerbaijan (SOCAR) and the Russian Integra Geophysics completed three-dimensional seismic survey in the area of 70 square kilometers of Hovsan-Zig block of fields and the adjacent coastal zone in August.

The works were carried out by order of the operating company Absheron Operating Company LTD. Materials obtained during field work, currently are being processed and interpreted by Integra Geophysics.

Also Geophysics and Geology Department of the State Oil Company of Azerbaijan (SOCAR) is conducting integrated geophysical studies in the Eldaroyugu-Boyuk Palanteken area of oil and area between the rivers Kur-Gabyrry

State Oil Company of Azerbaijan (SOCAR) has commissioned a new gas well on the onshore field Garadagh, in August. The well supplies 150,000 cubic meters of gas per day from a depth of 3355-3324 m.

The State Oil Company of Azerbaijan (SOCAR) continued three-dimensional geophysical exploration for Bahar Energy Limited on the area between the Bahar-2 perspective structure and Gum Deniz field in the Azerbaijani sector of the Caspian Sea.

SOCAR acquired two new drilling rigs of new generation to improve productivity factor and efficiency of drilling processes.

b) Refinery

Azerbaijan produced 849,500 tons of gasoline in January-August, which is 3.5 percent more compared to the same period of last year.

Azerbaijan produced over 3.18 million tons of main petroleum products in January-August.

Summary table of oil production in Azerbaijan:

Production of petroleum products

January-August 2012

In relation to January-August 2011 (in percent)

Automobile gasoline









Diesel fuel



Lubricating oil



Petroleum bitumen



c) Sale

The State Statistics Committee reported that about 3.13 million tons of oil products were sold in the domestic market of Azerbaijan in January-August 2012 compared to about 2.8 million tons in the same period of 2011

Some 26.4 percent of the total amount of oil products sent to consumers in the country accounted for gasoline, 26 percent - diesel fuel, 10.3 percent - jet fuel, 7.8 percent - fuel oil, 5.8 percent - oil asphalt, 2.5 percent - liquefied gas, 0.3 percent - lubricants and 20.9 percent - other oil products.

In total, over 4.2 million tons of Azerbaijani oil products were sent to consumers (including exports) in January-August.

Some 74.4 percent of the total amount of oil products sent to customers, were sold in the domestic market, while the remaining 25.6 percent - sent for export.

German E.ON completed preparation of feasibility study of the modernization and reconstruction of the gas network of Baku and Absheron peninsula. The reconstruction will be carried out during several years and will require an investment of around one billion euros.

The project provides for the reduction of gas losses to a minimum, the expansion of the existing gas distribution system, its reconstruction and renewal taking into account population growth and sustainable development of industry, as well as meeting the increased demand for gas in the future. Baku and the Absheron Peninsula's gas system is the largest in the country and covers about 650,000 customers. Some 90 per cent of the existing infrastructure will be updated.

2. Chemical complex

Azerkimya Production Unit (production of chemical products) of the State Oil Company of Azerbaijan (SOCAR) produced 20,300 tons of propylene in January-August, which is 47.5 percent more compared to the same period of 2011.

There was a decrease on many kinds of basic chemical products produced by the production association in January-August.

Production of basic chemical products:


January-August 2012

Compared to January-August 2011 (%

Sulfuric acid (thousands tons)



Polyethylene (thousands tons)



Propylene (thousands tons)



Isopropyl alcohol (thousands tons)



Paintwork material (tons)



Caustic soda ( liquid in tons )



Thus, 19,840 tons of solid polyethylene pipes, tubes and hoses were produced in January-August. It is 4.2 times more compared to the same period of last year. Some 336 tons of porous polyurethane plates and strips were produced in the republic. It is 2.4 times more compared to the same period of last year.

Chemical product transportation through SOCAR's Kulevi oil terminal will be possible thanks to a new propylene transportation complex at the oil terminal in Kulevi. The draft of the new complex was prepared by the Neftgazelmitedgigatlayihe Institute. The complex includes compressors, transformers, a nitric station and a pier to supply polypropylene. The production at the terminal will be loaded directly from railway tankers into gas carriers.

3. Power engineering

In January-August, Azerbaijan generated about 14 billion kilowatt-hours of electricity which is 10.2 percent more than the same period of 2011.

In 2011, the country produced more than 20 billion kilowatt hours of electricity, which is 8.4 percent more than in 2010.