Azerbaijani President urges bp to fulfill its commitments
Harsh mistakes of the bp-operated international consortium [the Azerbaijan International Operating Company] have led to a sharp decline in oil production on the Azeri and Chirag fields, Azerbaijani President Ilham Aliyev said at a meeting of the Cabinet of Ministers on the results of the country's socio-economic development in the first nine months of 2012.
President Aliyev noted that reaching the peak in oil production and its subsequent decline is a natural process, but the problem itself is in failure to fulfill the presented forecasts.
According to the President, a production sharing agreement (PSA) was signed under the Azeri and Chirag field development project.
"Big investments were made in the first stage, and the share of foreign investors was higher - 75 to 25 percent in favor of foreigners. After the investments were returned to their investors, share distribution began to change and comprised 50 to 50 percent," the president said.
President Aliyev noted that given the effectiveness of Azeri and Chirag and the terms of the contract, the share distribution changed in mid-2008 and since then it has comprised 75 to 25 percent in favor of Azerbaijan. That is, 75 percent of the profit oil produced here is the share of Azerbaijan.
"I want to reiterate that oil production in Azeri and Chirag fields for some reason began to decline after the share distribution was changed in accordance with the terms of the contract," the president said.
The Head of State underscored that big investments have been put in the Azeri and Chirag oil fields and Azerbaijan is grateful to all investors for it.
"I believe that all promises and presented forecasts should be fulfilled. I should note that this unexpected drop occurred only due to harsh mistakes by bp, which leads the consortium that operates the Azeri and Chirag fields. We have cooperated with bp for many years. At all times we have supported their activity. We supported them in their most difficult days. We expected adequate treatment. These erroneous forecasts given to us are unacceptable. The false promises given to the State Oil Company are unacceptable. In the business world, there is no place for such relationship, it is impossible," the President said.
Last month bp has officially promised the Azerbaijani leader that these negative facts will be eliminated in a short time.
"All mistakes were admitted. It was admitted that the situation is not so encouraging. The promises given to me were that in a short period, significant changes would be made, working program would be amended, specific measures would be taken to maintain production at a stable level, and, most importantly, the people who have committed these mistakes would be replaced. Almost a month has passed from that time, but I do not see the implementation of these commitments.
On the contrary, I believe, there is a process of playing for time. Therefore, I believe that this is totally unacceptable. The State Oil Company has been instructed to raise the issue officially and to take the necessary measures. Investors who are unable to perform their duties and the terms of the contract should draw conclusions, the strict measures should be and will be taken," the Head of State underscored.
Azerbaijan reconsiders oil price forecast for 2013
The Azerbaijani government increased its price forecast up to $100 amid the global processes and variability in the world oil prices. The forecasts of the state budget and the consolidated budget for 2013 have been formed on its basis, the government said. At present macro-economic parameters and indices of the state budget for 2013 are adjusted according to this oil price forecast.
The budget package for 2013 and the next three years will be submitted to parliament up till October 15.
According to the situation on the world markets, the oil price as a result of adjustments to the forecast for 2012 was increased from $80 to $100. The Economic Development Ministry originally fixed the oil price at $80 within the macroeconomic forecasts for the next year.
Nabucco West negotiating with Shah Deniz partners on equity participation in project
Nabucco West is in close and frequent negotiations with Shah Deniz consortium on a cooperation agreement, the Managing Director of the Nabucco Gas Pipeline International GmbH, Reinhard Mitschek said.
Mitschek noted that this agreement foresees an equity participation of certain Shah Deniz partners in Nabucco West.
"We have already opened a data room some weeks ago. Shah Deniz consortium started its due diligence process," he said.
BP works with SOCAR to address Azeri-Chirag-Guneshli production issues as quickly as possible
The company BP is fully committed to Azerbaijan and working with the State Oil Company of Azerbaijan (SOCAR) to address Azeri-Chirag-Guneshli production issues as quickly as possible, BP Azerbaijan said.
Addressing a meeting of the Cabinet of Ministers to discuss the results of the country's socio-economic development in nine months of 2012, and outline further priorities, President of Azerbaijan Ilham Aliyev said that serious mistakes of international consortium (Azerbaijan International Operating Company), operator of which is the company BP, led to a sharp decline in oil production on the Azeri and Chirag fields.
The Head of State said the oil production forecast from the Azeri and Chirag fields presented to Azerbaijan, was 46.8 million tons in 2009, whilst only 40.3 million tons were extracted.
South Caucasus gas pipeline to be expanded for new gas volumes
The capacity of the South Caucasus gas pipeline can be increased to 60 billion cubic meters a year in case of necessity, SOCAR's high ranking representative said.
At present, Azerbaijan is in the process of choosing a route of gas supplies to the European market. The partners developing Azerbaijani gas condensate field "Shah Deniz" consider two possible projects of transporting Azerbaijani gas to Europe - Nabucco West and Trans Adriatic Pipeline (TAP)
Around 6 billion cubic meters of gas will be exported to Turkey and 10 billion cubic meters to Europe within the second stage of "Shah Deniz" development.
The source said that South Caucasus gas pipeline capacity will be increased by 16 billion cubic meters. At present, the real capacity of the pipeline is 8.8 billion cubic meters.
"Then it will be expanded by 16 billion cubic meters, and if necessary, up to 60 billion cubic meters," a source said. "The pipeline will be more expanded with each additional volume of gas."
The source said that the expansion of the capacity of the South Caucasus gas pipeline will be made by means of looping, which involves laying of parallel pipes connected with the main pipeline.
Work volume revealed in new agreement between SOCAR and BP
Geological models of reservoirs on separate research districts will be established within the framework of an agreement signed between SOCAR (State Oil Company of Azerbaijan) Geophysics and Geology Administration and BP, the report published on the official website of the administration says.
Recurring processing and interpretation of two and three dimensional seismic data, specification of the geological structure of researched territories and construction of three dimension models, construction of geological models of structures lying deep in the Caspian Sea and conduction of research to estimate their oil reserves will be carried out within the agreement.
Implementation of engineering and geological work to research the relief, physical and mechanical features of rocks covering the districts, where hydro technical installations and communications are going to be constructed.
Iran's ICOFC to invest $1.2 billion in oil and gas projects
The Iranian Central Oil Fields Company (ICOFC) will draw out $1.2 billion from the energy fund to invest in related oil and gas projects by the end of the current calendar year (March 20, 2013), the ICOFC managing director stated.
Last year, $1 billion was invested in the projects, Mehdi Fakour told IRIB News.
Four Iranian oilfields, namely Cheshmeh Khosh, Sarvestan, Khesht, and Saa'databad, located in central parts of the country are in the final stages of development and will start production by the end of the current (Iranian) year, Fakour said on September 25.
Some $660 million needed to reverse Kazakhstan's pipeline
According to preliminary data, some 100 billion tenge ($664.5 million) will be required to reverse operations of the "Kenkiyak Atirau" pipeline, the director general of "KazTransOil" Kayrgeldi Kabildin said during an exclusive interview.
"The basic engineering phase is nearing completion. The decision to invest will be made following the presentation of documents. According to preliminary data, the project cost for organizing the reversal of the "Kenkiyak Atirau" pipeline will amount to approximately 100 billion tenge," Kabildin said.
In his words, this volume of investments will be required for construction of new pump stations to increase pipeline capacity.
The general director said that the final decision will be made after consideration of all risks and responsibilities of parties.
Kabildin said the reverse will also operate outside the "Kenkiyak Atirau"area to provide the Chinese market access to Western Kazakh oil.
In his words, the project capacity will be 12 billion tons. The reverse must be completed in 2014.
Romania supports Turkmen gas delivery to European markets
A joint document signed by Turkmen and Romanian presidents Gurbanguly Berdimuhamedov and Traian Basescu in Ashgabat, testifies to the importance of supplying Turkmen energy resources to Europe, the Turkmen government said.
Basescu has paid an official visit to Turkmenistan (Oct. 11-12).
According to the document, the parties agreed to contribute to intensifying the bilateral dialogue on energy security and the projects of natural gas supplies from Turkmenistan to Europe.
According to the government report, the Romanian president said that significant progress has been recently achieved in the Turkmen-Romanian relations, which confirms the mutual willingness to accelerate partnership, as well as within the dialogue with the EU.
The Romanian president appreciated Turkmenistan's readiness to accelerate a constructive dialogue with the European Union and Turkmenistan's initiatives in energy supplies to the European market.
President Basescu has also confirmed Romania's support to speed up ratification of the cooperation treaty between Turkmenistan and the European Union.
Moreover, according to the document, the parties expressed interest in cooperation in the following areas: joint oil operations, purchase of natural gas on the Turkmen market, joint rendering specialized services in the oil and gas sector.