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Review of oil and gas operations in Azerbaijan (January-September 2016)

Analysis Materials 14 November 2016 14:58 (UTC +04:00)

1. FEC

а) Oil and Gas Production

Some 31.27 million tons of oil and gas condensate were produced in Azerbaijan in January-September 2016, which is 0.3 percent less than in the same period of 2015, the Azerbaijani State Statistics Committee said in a report.

The country produced 41.69 million tons of oil and gas condensate in 2015, as compared to 41.9 million tons in 2014.

The main oil output in Azerbaijan currently comes from the Azeri-Chirag-Gunashli field.

The tank gas production in Azerbaijan stood at 13.77 billion cubic meters in January-September 2016, or 1.6 percent less than in the same period of 2015.

This is while the country produced 19.72 billion cubic meters of tank gas in 2015, as compared to 18.7 billion cubic meters in 2014.

Some 6.51 billion manat was invested in Azerbaijan's oil and gas sector in January-September 2016, the report said.

Azerbaijan’s state oil company SOCAR produces oil at Azerbaijani onshore and offshore fields at its own expense. Some oil is supplied for processing to the Baku refineries, other part is exported via the Baku-Novorossiysk and Baku-Tbilisi-Ceyhan pipelines.

SOCAR produced 5.68 million tons of oil at Azerbaijani onshore and offshore fields in January-September 2016, as compared to 6.21 million tons in the same period of 2015.

SOCAR produced 4.71 billion cubic meters (bcm) of gas from the country’s offshore and onshore fields using its own funds in January-September 2016 as compared to 5.16 bcm in the same period of 2015.

In addition to its own production, SOCAR also gets gas from Shah Deniz and Azeri-Chirag-Gunashli (associated gas) fields by developing these fields in cooperation with foreign partners.

The total volume of gas produced from those fields and independently developed ones was 22.29 bcm in January-September 2016 versus 21.55 bcm in January-September 2015.

SOCAR drilled 86,580 meters in January-September 2016 versus 80,550 meters in the same period of 2015.

Some 84,518 meters of the figure accounted for production drilling and 2,065 meters accounted for exploration drilling.

SOCAR commissioned 46 new wells in January-September 2016.

Azneft, a production unit of Azerbaijan’s state oil company SOCAR, produced 4.7 million tons of oil in three quarters of 2016, Azneft said.

During the reporting period, the company produced 4.2 billion cubic meters of gas, which exceeds the planned level by 0.9 percent.

“Seventy-seven inactive wells were brought back to operation since early 2016, making it possible to produce additional 39,500 tons of oil, which exceeds forecasts by 2.3 times,” said Azneft.

SOCAR’s production unit also carried out 469 geological operations, which allowed additionally producing 146,000 tons of oil. The technical work carried out by Azneft resulted in the additional production of 39,800 tons of oil.

Azneft also said it expanded the drilling works. Forty-three wells were drilled and commissioned in January-September 2016 in accordance with an order from Azneft.

Some 78,000 tons of oil was extracted from those wells.

b) Processing

Azerbaijan produced 4.02 million tons of oil products in January-September 2016 compared to 4.14 million tons in the same period of 2015, said the report.

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

During the reporting period, Azerbaijan produced 831,800 tons of gasoline, or 8.3 percent less than in January-September 2015.

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

Oil products

Jan.-Sept. 2016 (1,000 tons)

Compared to Jan.-Sept. 2015 (%)

Gasoline

831,8

91,7

Naphtha

131,5

92,5

Kerosene

473,8

92,5

Diesel fuel

1720,9

80,9

Fuel oil

435,3

165

Lubricants

7,7

42,3

Oil bitumen

138,5

111

Oil coke

280

94,1

The Heydar Aliyev Baku Oil Refinery has resumed the manufacture of oil products, reads a message from SOCAR.

The refinery suspended the manufacture of oil products in August due to the scheduled repair work.

Catalytic cracking, primary processing, coking and catalytic reforming facilities have been commissioned after the successful repair work.

Modernization of the Heydar Aliyev Baku Oil Refinery will be completed by 2020. The refinery’s production capacity will increase from 6 million tons to 7.5 million tons per year after the modernization.

The groundbreaking ceremony for a new bitumen production unit was held as part of the modernization project in September.

2. Chemical complex

Azerbaijan produced 36,600 tons of propylene in January-September 2016, which is nine percent less than in the same period of 2015, the report said.

According to the report, the country produced 66,900 tons of polyethylene in January-September 2016, or 6.8 percent less than in the same period of 2015.

Some 46,000 tons of barium sulfate was produced in Azerbaijan during the period, which is 3.9 percent more than in the same period of 2015.

According to the report, 7,530 tons of isopropyl alcohol was produced in the country in January-September, which is 3.9 percent less than in the same period of 2015.

Azerbaijan saw a decrease in the production of major types of chemicals in January-September 2016.

Below are the figures for output of major chemicals in Azerbaijan:

Products

Jan.-Sept. 2016

Compared to Jan.-Sept. 2015

(%)

Barium sulfate (1,000 tons)

46

103.9

Polyethylene (1,000 tons)

66.9

93.2

Propylene (1,000 tons)

36.6

91

Isopropyl alcohol (1,000 tons)

7.53

96.1

Paint products (tons)

5.15

133

Iodine (tons)

156.4

82.8

Argon (1,000 cubic meters)

146.8

86.8

Beauty aids (1,000 manat)

1040

5.3

Ethylene (1,000 tons)

71.1

96.2

Detergents (tons)

205.8

2.8 times

3. Electricity

­

Azerbaijani power plants generated 16.79 billion kilowatt hours of electricity in January-September 2016, which is by 2.3 percent less than in the same period of 2015, the country’s State Statistics Committee said in a message.

According to the message, some 16.05 billion kilowatt hours of the total electricity generation accounted for commercial electricity in January-September 2016, which is two percent less than in January-September 2015.

Thermal power plants generated 14.43 billion kilowatt hours of the total commercial electricity generation in January-September 2016, or 4.7 percent less than in the same period of 2015.

Azerbaijan’s hydro-power plants generated 1.56 billion kilowatt hours of commercial electricity in January-September 2016, which is 26.1 percent more than in January-September 2015. Wind farms produced 11.8 million kilowatt hours of electricity, while solar power plants - 50.1 million kilowatt hours of electricity in the reporting period.

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 10 hydro power plants and 14 thermal power plants.

At present, the generation capacity of Azerbaijan's power supply system is 7,200 megawatts. This allows generating around 24 billion kilowatt hours of electricity annually and enables the country to annually export 2.1 billion kilowatt / hours of electricity.1. FEC

а) Oil and Gas Production

Some 31.27 million tons of oil and gas condensate were produced in Azerbaijan in January-September 2016, which is 0.3 percent less than in the same period of 2015, the Azerbaijani State Statistics Committee said in a report.

The country produced 41.69 million tons of oil and gas condensate in 2015, as compared to 41.9 million tons in 2014.

The main oil output in Azerbaijan currently comes from the Azeri-Chirag-Gunashli field.

The tank gas production in Azerbaijan stood at 13.77 billion cubic meters in January-September 2016, or 1.6 percent less than in the same period of 2015.

This is while the country produced 19.72 billion cubic meters of tank gas in 2015, as compared to 18.7 billion cubic meters in 2014.

Some 6.51 billion manat was invested in Azerbaijan's oil and gas sector in January-September 2016, the report said.

Azerbaijan’s state oil company SOCAR produces oil at Azerbaijani onshore and offshore fields at its own expense. Some oil is supplied for processing to the Baku refineries, other part is exported via the Baku-Novorossiysk and Baku-Tbilisi-Ceyhan pipelines.

SOCAR produced 5.68 million tons of oil at Azerbaijani onshore and offshore fields in January-September 2016, as compared to 6.21 million tons in the same period of 2015.

SOCAR produced 4.71 billion cubic meters (bcm) of gas from the country’s offshore and onshore fields using its own funds in January-September 2016 as compared to 5.16 bcm in the same period of 2015.

In addition to its own production, SOCAR also gets gas from Shah Deniz and Azeri-Chirag-Gunashli (associated gas) fields by developing these fields in cooperation with foreign partners.

The total volume of gas produced from those fields and independently developed ones was 22.29 bcm in January-September 2016 versus 21.55 bcm in January-September 2015.

SOCAR drilled 86,580 meters in January-September 2016 versus 80,550 meters in the same period of 2015.

Some 84,518 meters of the figure accounted for production drilling and 2,065 meters accounted for exploration drilling.

SOCAR commissioned 46 new wells in January-September 2016.

Azneft, a production unit of Azerbaijan’s state oil company SOCAR, produced 4.7 million tons of oil in three quarters of 2016, Azneft said.

During the reporting period, the company produced 4.2 billion cubic meters of gas, which exceeds the planned level by 0.9 percent.

“Seventy-seven inactive wells were brought back to operation since early 2016, making it possible to produce additional 39,500 tons of oil, which exceeds forecasts by 2.3 times,” said Azneft.

SOCAR’s production unit also carried out 469 geological operations, which allowed additionally producing 146,000 tons of oil. The technical work carried out by Azneft resulted in the additional production of 39,800 tons of oil.

Azneft also said it expanded the drilling works. Forty-three wells were drilled and commissioned in January-September 2016 in accordance with an order from Azneft.

Some 78,000 tons of oil was extracted from those wells.

b) Processing

Azerbaijan produced 4.02 million tons of oil products in January-September 2016 compared to 4.14 million tons in the same period of 2015, said the report.

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

During the reporting period, Azerbaijan produced 831,800 tons of gasoline, or 8.3 percent less than in January-September 2015.

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

Oil products

Jan.-Sept. 2016 (1,000 tons)

Compared to Jan.-Sept. 2015 (%)

Gasoline

831,8

91,7

Naphtha

131,5

92,5

Kerosene

473,8

92,5

Diesel fuel

1720,9

80,9

Fuel oil

435,3

165

Lubricants

7,7

42,3

Oil bitumen

138,5

111

Oil coke

280

94,1

The Heydar Aliyev Baku Oil Refinery has resumed the manufacture of oil products, reads a message from SOCAR.

The refinery suspended the manufacture of oil products in August due to the scheduled repair work.

Catalytic cracking, primary processing, coking and catalytic reforming facilities have been commissioned after the successful repair work.

Modernization of the Heydar Aliyev Baku Oil Refinery will be completed by 2020. The refinery’s production capacity will increase from 6 million tons to 7.5 million tons per year after the modernization.

The groundbreaking ceremony for a new bitumen production unit was held as part of the modernization project in September.

2. Chemical complex

Azerbaijan produced 36,600 tons of propylene in January-September 2016, which is nine percent less than in the same period of 2015, the report said.

According to the report, the country produced 66,900 tons of polyethylene in January-September 2016, or 6.8 percent less than in the same period of 2015.

Some 46,000 tons of barium sulfate was produced in Azerbaijan during the period, which is 3.9 percent more than in the same period of 2015.

According to the report, 7,530 tons of isopropyl alcohol was produced in the country in January-September, which is 3.9 percent less than in the same period of 2015.

Azerbaijan saw a decrease in the production of major types of chemicals in January-September 2016.

Below are the figures for output of major chemicals in Azerbaijan:

Products

Jan.-Sept. 2016

Compared to Jan.-Sept. 2015

(%)

Barium sulfate (1,000 tons)

46

103.9

Polyethylene (1,000 tons)

66.9

93.2

Propylene (1,000 tons)

36.6

91

Isopropyl alcohol (1,000 tons)

7.53

96.1

Paint products (tons)

5.15

133

Iodine (tons)

156.4

82.8

Argon (1,000 cubic meters)

146.8

86.8

Beauty aids (1,000 manat)

1040

5.3

Ethylene (1,000 tons)

71.1

96.2

Detergents (tons)

205.8

2.8 times

3. Electricity

­

Azerbaijani power plants generated 16.79 billion kilowatt hours of electricity in January-September 2016, which is by 2.3 percent less than in the same period of 2015, the country’s State Statistics Committee said in a message.

According to the message, some 16.05 billion kilowatt hours of the total electricity generation accounted for commercial electricity in January-September 2016, which is two percent less than in January-September 2015.

Thermal power plants generated 14.43 billion kilowatt hours of the total commercial electricity generation in January-September 2016, or 4.7 percent less than in the same period of 2015.

Azerbaijan’s hydro-power plants generated 1.56 billion kilowatt hours of commercial electricity in January-September 2016, which is 26.1 percent more than in January-September 2015. Wind farms produced 11.8 million kilowatt hours of electricity, while solar power plants - 50.1 million kilowatt hours of electricity in the reporting period.

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 10 hydro power plants and 14 thermal power plants.

At present, the generation capacity of Azerbaijan's power supply system is 7,200 megawatts. This allows generating around 24 billion kilowatt hours of electricity annually and enables the country to annually export 2.1 billion kilowatt / hours of electricity.

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