Review of oil and gas operations in Azerbaijan (january-july 2015)

1. FEC

а) Oil and Gas Production

The total volume of oil and gas condensate produced in Azerbaijan in January-July 2015 hit 24.5 million metric tons, or 2.1 percent less than in the same period of 2014, the country's State Statistics Committee said in its report.

The commercial gas production in Azerbaijan stood at 11.9 billion cubic meters in January-July 2015, or 10.6 percent more than in the same period of 2014.

The State Oil Company of Azerbaijan (SOCAR) (excluding the joint enterprises and operating companies) carried out drilling work in the volume of 62,624 meters in January-July 2015 or by 22.8 percent less than in the same period of 2014 (81,123 meters), SOCAR said.

This is while the development drilling accounted for 61,624 meters of the total volume of drilling work carried out by SOCAR in January-July 2015, and exploration drilling accounted for the remaining 1,000 meters.

SOCAR has commissioned 42 new wells since early 2015.

BP company has competed work on drilling a new well at Azeri-Chirag-Guneshli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea.

"The depth of the J04Z well is a little more than 4,000 meters," said the source.

The drilling was carried out on West Chirag platform under the Chirag Oil Project that envisages increasing the oil production at ACG block.

SOCAR continued the implementation of the program to stabilize and increase the oil production volume. SOCAR is drilling and overhauling onshore and offshore fields.

SOCAR has put into operation the well No. 122 on the third platform at Guneshli field after overhaul.

The average daily production rate of the well is 48 metric tons of oil.

- a new well on the Oil Rocks field was put into the operational fund. The well No 2206 was put into operation after the geological and technical work in the range of 2,349-2,334 meters. Its daily debit is 30 metric tons of oil;

- a new well is being drilled in the Oil Rocks field. Daily debit of the well No 2594 is 30 metric tons of oil and its design depth is 2,330 meters.

b) Processing

Azerbaijan produced 1.75 million metric tons of diesel fuel in January-July 2015, or 13.1 percent more than in the same period of 2014, the country's State Statistics Committee said in its report.

Currently, the State Oil Company of Azerbaijan (SOCAR) is modernizing its processing facilities, as the fuel consumption has increased in the country.

Almost 3.67 million metric tons of petroleum products were produced in Azerbaijan in January-July 2015, compared to over 2.7 million metric tons in the same period of 2014.

Below is the summary table of petroleum products' output in Azerbaijan:

2. Chemical complex

Azerbaijan produced 56,000 metric tons of polyethylene in Jan.-July of 2015, or 16 percent more than in the same period of 2014, the country's State Statistical Committee said in its report on Jan.-July 2015.

Moreover, 31,600 metric tons of polypropylene was produced in Azerbaijan in Jan.-July, or 6.8 percent more than in the same period of 2014.

During the reporting period, Azerbaijan produced 32,900 metric tons of barium sulfate, or 26.2 percent more than in Jan.-July of 2014.

The report said that the country produced 4,870 metric tons of isopropyl alcohol, or 2.9 times more than in the same period of 2014.

In general, the report said that Azerbaijan saw growth in the production of majority of main chemical products in the first seven months of 2015.

Output of main types of chemical products:

The country produced 8,000 metric tons of solid polyethylene pipes, tubes, hoses in Jan.-July, or 17.6 percent less than in Jan.-July of 2014.

3. Electricity

­Azerbaijan produced 13.6 billion kilowatt hours of electricity in January-July 2015, or 2.9 percent more than in the same period of 2014, the country's State Statistical Committee said in its report on Jan.-July 2015. Of the total volume of electricity production, 13 billion kilowatt hours accounted for commercial electricity, which is 2.9 percent more than in the same period of 2014.

Moreover, of the total volume of commercial electricity produced in Jan.-July 2015, around 12.5 billion kilowatt hours accounted for thermal electricity (91.96 percent of the total volume of electricity production), which is 1.5 percent more than in the same period of 2014. Azerbaijan's hydro power plants produced 1.089 billion kilowatt hours of commercial electricity in Jan.-July, which is 21.7 percent more than in the same period of 2014. Wind power generation facilities produced 4.1 million kilowatt hours of electricity in Jan.-July 2015 or by 2.5 percent more than in the same period of 2014.

Azerbaijan produced 23.11 billion kilowatt hours of electricity in 2014, or 6.7 percent more than in 2013. Azerenergy JSC is the main producer of electricity in Azerbaijan. It has over 200 substations with a capacity of 500, 330, 220 and 110 kilovolt amperes, as well as ten hydro power plants and 14 thermal power plants.

The generation capacity of Azerbaijan's power supply system has increased by 30 percent over the last five years. Currently, its capacity is 7,105 megawatt. This generates around 24 billion kilowatt hours of electricity and export 2.1 billion kilowatt hours of electricity annually. Today, Azerbaijan is implementing the flow of electricity with Georgia, Iran and Russia.

Azerbaijan exported 210.76 million kilowatt hours of electricity in accordance with the customs declaration in January-July 2015 versus 383.45 million kilowatt hours in the same period of 2014, the country's State Customs Committee said in its report.

Azerbaijan exported some $12.8 million worth of electricity in January-July 2015 versus $18.6 million in the same period of 2014, according to the committee.

The country exported 588.32 million kilowatt hours of electricity in accordance with the customs declaration in 2014 compared to over 595.67 million kilowatt hours in 2013.

Azerbaijan is working on a feasibility study of two projects in the field of renewable energy. Together with the German KfW Development Bank, the work on a wind farm project with a capacity of up to 80 megawatts is underway. Together with the Asian Development Bank, the work on a construction project of two power plants is underway in Oguz and Aghjabadi districts.