Review of oil and gas operations in Azerbaijan (2015)

1. FEC

а) Oil and Gas Production

Azerbaijan produced 41.69 million tons of oil and gas condensate in 2015, or 0.8 percent less than in 2014, the State Statistics Committee's report as of 2015 said.

This is while 41.9 million tons of oil and gas condensate were produced in Azerbaijan in 2014, compared to 43.1 million tons in 2013.

The major part of oil production accounts for the Azeri-Chirag-Guneshli block of oil and gas fields and Shah Deniz gas and condensate field which are developed jointly with foreign partners.

The commercial gas production in Azerbaijan totaled 19.72 billion cubic meters in 2015, or 5.5 percent more than in 2014, the report said.

This is while the commercial gas production in the country stood at 18.7 billion cubic meters in 2014, compared to 17.9 billion cubic meters in 2013.

The State Oil Company of Azerbaijan (SOCAR) produced 8.16 million tons of oil from the country's offshore and onshore fields in 2015, compared to 8.32 million tons in 2014, said the company on its website.

SOCAR produced 6.87 billion cubic meters (bcm) of gas in 2015 from the country's offshore and onshore fields using its own funds, compared to 7.22 bcm produced in 2014, a message on the company's website said.

The drilling work carried out by SOCAR reached 105,410 meters in 2015 or 17.2 percent less than in 2014.

Over 104,400 meters of the total volume of drilling work carried out by SOCAR in 2015 accounted for development drilling, while the remaining part - exploration drilling.

Some 7.16 billion manat was invested in the oil and gas sector of Azerbaijan in 2015, which is 20.1 percent more than in 2014, according to a report.

Azerbaijan produced 41.69 million tons of oil and gas condensate in 2015 compared to 41.9 million tons of oil and gas condensate in 2014. SOCAR continued implementing a program to stabilize and increase oil production in 2015.

According to the program, carried out by SOCAR independently (without taking into account the operating companies and joint ventures), SOCAR continued repairing existing wells and drilling new wells. More than seventy wells were put into operation during the year. However, there was an 8.16 million ton-decline (compared to 8.32 in 2014). This affected the total production rate.

The depletion of deposits and outdated equipment are objective reasons for the decline of SOCAR's production, despite the efforts to keep its volumes at the level of the previous years. Azerbaijani Minister Natig Aliyev said that the fire, which occurred in early December on one of the platforms on the Oil Rocks did not affect the production.

b) Processing

Some 5.45 million tons of oil products were produced in Azerbaijan in 2015 compared to 5.31 million tons in 2014, the report said.

Currently, SOCAR is modernizing its processing facilities, as the fuel consumption has increased in the country.

Some 1.22 million tons of gasoline were produced in Azerbaijan in 2015 or by 1.1 percent less than in 2014.

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

Oil products

2015 (thousand tons)

Compared to 2014 (%)










Diesel fuel



Fuel oil






Oil bitumen



Fuel consumption, in particular gasoline greatly increased in Azerbaijan by late 2013 compared to the previous years.

The process of modernization of the Heydar Aliyev Baku Oil Refinery named will be completed by late 2018.

After the completion of the reconstruction, the processing capacity of the refinery will increase from 6 million to 7.5 million tons of oil per year.

SOCAR and Austrian Pörner Group have signed a contract for the construction of a bitumen unit as part of the modernization of the Heydar Aliyev Baku Oil Refinery.

SOCAR and the French company Axens signed a contract for the construction of the diesel fuel and gasoline hydro-treating units as part of the modernization of the Heydar Aliyev Baku Oil Refinery.

SOCAR has signed a contract with the US UOP (formerly known as Universal Oil Products) LLC on licensing the construction of a number of units within the framework of modernization of the Baku Oil Refinery named after Heydar Aliyev.

SOCAR and the US Fluor company concluded a contract. According to the contact, Fluor will manage the implementation of the project on establishing the Oil and Gas Processing and Petrochemical Complex (OGPC) near Baku.

Fluor has been chosen as a contractor for managing the projects of constructing the gas processing and petrochemical plants, the statement said.

Fluor will control the implementation of the stages of design, procurement and construction of the gas processing and petrochemical plants, as well as a plant-wide economic system. The US company will assist SOCAR in managing the contractors chosen for the project implementation.

2. Chemical complex

Azerbaijan produced 103,500 tons of polyethylene in 2015, which is 2.4 percent more than in 2014, the Azerbaijani State Statistics Committee said in its report.

The country produced 56,400 tons of propylene in 2015, or 0.2 percent more than in 2014.

Some 61,000 tons of barium sulfate were produced in Azerbaijan during the reporting period, which is 12.78 percent more than in 2014.

Around 12,250 tons of isopropyl alcohol were produced in the country in 2015, which is 15.9 percent more than in 2014, the report said.

However, Azerbaijan saw an increase in the production of other major types of chemical products in 2015.

The table below shows the production volume of major types of chemical products:



Compared to 2014

( %)

Barium sulfate (1,000 tons)



Polyethylene (1,000 tons)



Propylene (1,000 tons)



Isopropyl alcohol (1,000 tons)



Paint products (tons)



Iodine (tons)



The country produced 12,400 tons of solid polyethylene pipes, tubes and hoses, which is 32 percent less than in 2014.

Some events occurred in the Azerbaijani chemical area in 2015:

Azerbaijan's state oil company SOCAR signed a contract with Italy's Maire Tecnimont SpA for execution of an engineering procurement construction (EPC) contract to build a polyethylene plant.

The plant is to be built as part of the SOCAR Polymer project.

The contract is worth $350 million.

The contract stipulates provision of full technical services, logistics, installation and construction works before the plant's commissioning, as well as conducting performance tests.

The SOCAR Polymer project is being implemented at the Sumgait Chemical Industrial Park.

SPCAR has commissioned a laboratory at the ethylene-polyethylene plant in the country's Sumgait city after the overhaul.

The ethylene-polyethylene plant is owned by Azerkimya production association of SOCAR.
The laboratory has also been provided with the modern equipment of Russia and German production.

Moreover, the work on constructing a facility for purifying gas from sulfur compounds and a facility for hydrogenation of gas fractions continues at the plant.

At the same time, the work on modernization in the sphere of generation of steam and electricity is underway.

President of the Republic of Azerbaijan Ilham Aliyev has attended the groundbreaking ceremony of the High Density Polyethylene Plant, which will be built as part of the "SOCAR Polymer" project.

It was noted that the annual capacity of the two units of the company will be 180,000 tons of polypropylene and 120,000 tons of high density polyethylene. These units will be commissioned in 2018.

3. Electricity


Azerbaijan produced 22.9 billion kilowatt hours of electricity in 2015 or by 0.7 percent less than in 2014, the country's State Statistics Committee's report said.

Of the total volume of electricity production, 21.81 billion kilowatt hours accounted for commercial electricity or by 0.6 percent less than in 2014.

This is while of the total volume of commercial electricity produced in 2015, around 20.26 billion kilowatt hours (88.5 percent) accounted for the thermal power plants, or 1.5 percent less than in 2014.

The hydro power plants in the country generated 1.54 billion kilowatt hours of commercial electricity in 2015, or 25.3 percent more than in 2014.

The wind power generating facilities produced 5.7 million kilowatt hours of electricity in 2015, while the solar energy facilities generated four million kilowatt hours of electricity.

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 eight hydro power plants and 13 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 7,200 megawatt. This allows to generate around 24 billion kilowatt hours of electricity and export 2.1 billion kilowatt hours of electricity annually.

Today, Azerbaijan is transferring the flow of electricity to Georgia, Iran and Russia.

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