Review of oil and gas operations in Azerbaijan (January-October 2012)

Analysis Materials 15 December 2012 15:02 (UTC +04:00)

1. FEC


In January - October 2012, Azerbaijan produced 36.03 million tons of oil and gas condensate, which is 7.5 percent less than in January-October 2011, the Azerbaijani State Statistics Committee said. The bulk of oil production fell to Azeri-Chirag-Guneshli (ACG) offshore fields and Shah Deniz gas condensate field that are developed in cooperation with foreign partners.

Some 14.35 billion cubic meters of gas were produced in January-October which is 6.8 percent more than in the same period of 2011.

Partners of the development of the Azeri-Chirag-Guneshli (ACG) block of fields in the Azerbaijani sector of the Caspian Sea are developing a programme on extraction in 2013, 2014 and 2014-2024 the head of SOCAR (State Oil Company of Azerbaijan) Rovnag Abdullayev said. He said stabilisation of oil production in the field at 33 million tons is projected in 2013. Production will be increased to 35 million tons in 2014. Between 2014 to 2024, the production volume will be stabilised at 33 million tons (700,000 barrels a day).

Earlier 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.

Geophysics and Geology Department of the State Oil Company of Azerbaijan (SOCAR) and BP signed a framework agreement on technical services. As SOCAR First Vice-President on Geology, Geophysics and Mining Khoshbakht Yusifzade said at the signing ceremony, by signing the new agreement SOCAR's opportunities in providing technical services in exploration and evaluation projects, in which BP is the operator, increases

The State Oil Company of Azerbaijan (SOCAR) will present a preliminary version of a new contract on the project to develop deep bedding gas on the block in the Azerbaijani sector of the Caspian Sea to the partners of Azeri-Chirag-Guneshli (ACG). He said work on the draft version of the contract is almost complete. This will be an agreement of a new format, a Risk Service Agreement (contract with a minimum guarantee of compensation).

b) refinery

Azerbaijan produced 1.07 million tons of gasoline in January-October, which is 0.2 percent less compared to the same period of last year, Azerbaijani State Statistics Committee said.

Azerbaijan produced about 4 million tons of main petroleum products in January-October.

Summary table of oil production in Azerbaijan:

Production of petroleum products

January-October 2012

In relation to January-October 2011 (in percent)

Automobile gasoline

1 068,9








Diesel fuel

1 968,2


Diesel fuel



Petroleum bitumen



Azerbaijani state oil company SOCAR is planning to refine 6.6 million tons of oil in 2013, a SOCAR official said. This year, he said, the figure will be 6.3 million tons -- almost unchanged from last year. The plans to increase refining volumes are due to the need for increasing gasoline production. Production of more gasoline is necessitated by consumption growth on this type of fuel in the domestic market, which has increased by 9 per cent.

C) sale

Around 3.9 million tons of oil products were delivered to the Azerbaijani domestic market in January-October compared to over 3.6 million tons in January-October 2011

In particular, supplying petrol, diesel fuel, petroleum bitumen, lubricants and other petroleum products, as well as jet fuel and liquefied gas to the domestic market has increased during this period.

In total, some 5.3 million tons of Azerbaijani oil products were delivered to consumers (including exports) in January-October.

Around 74.2 percent of the total volume of oil products delivered to consumers, were sold in the domestic market, while the remaining 25.38 percent - transported for export.

2. Chemical complex

Azerkimya Production Unit (production of chemical products) of the State Oil Company of Azerbaijan (SOCAR) produced 22,600 tons of propylene during Jan-Oct 2012, which is 46.6 percent more compared to the same period of 2011, the Azerbaijani State Statistics Committee said.

A decrease was observed in all basic chemical products produced by Azerkimya in January - October.

Production of basic chemical products:


January-October 2012

Compared to January-October 2011 (%)

Sulfuric acid (thousands tons)



Polyethylene (thousands tons)



Propylene (thousands tons)



Isopropyl alcohol (thousands tons)



Paintwork material (tons)



Caustic soda ( liquid in tons )



Thus, 21,740 tons of solid polyethylene pipes, tubes and hoses were produced in January-October. It is 3.6 percent more compared to the same period of last year. Some 463 tons of porous polyurethane plates and strips were produced in the republic. It is 92.9 percent more compared to the same period of last year.

3. Electricity

Azerbaijan produced 16.74 billion kilowatt / hours of electricity in January-October, which is 9.6 percent more compared to the same period of 2011.

Azerenergy (production and distribution of electricity in Azerbaijan) conducted work on the installation of radio and tele-mechanical equipment and the laying of fibre-optic cables at the Cenub power plant, commissioning of which is envisaged in the near future, a statement released by Azerenergy reported. Along with a fibre-optic cable network which connects stations and substations, there is also a corporate network covering a regional power supply and distribution networks. All work is being carried out as part of a modern system of supervisory control of power systems (SCADA). Creating a SCADA system will allow response to the situation in the energy network and improve the efficiency of energy supply and reduce losses. The project involves the equipment of all Azerbaijani regions with SCADA system