Major events in Caspian countries' oil and gas industry for last week (Jan. 1-5)
Czech Republic eyes to buy petroleum products from Azerbaijan
The Czech Republic intends to purchase petroleum products of Azerbaijan's petrochemical plants, the Secretary for Economic Affairs and Trade of the Czech Embassy in Azerbaijan Jan Jindrich told Trend.
"Presently, we purchase only raw materials from Azerbaijan, which are further processed in our Czech petrochemical plants, but at the same time we are following with great interest the nomenclature of oil products produced in Azerbaijan and absent in the Czech Republic. In this regard, the Czech Republic intends to purchase from Azerbaijan not only raw materials, but also refined oil products," Jindrich said.
He added that the purchase of oil products from Azerbaijan will start, approximately, in 2019.
Trade turnover between the two countries increased by more than 100 percent in January-October 2017 as compared to the same period of the previous year, amounting to $924 million in 10 months of 2017, of which $846 million accounted for the export of Azerbaijani products to the Czech Republic, while the import of Czech products by Azerbaijan totaled $78 million.
The main product exported from Azerbaijan to the Czech Republic is crude oil, the volume of which totals 2-2.5 million tons per year, making up a third of the oil consumed in the Czech Republic.
SOCAR to expand filling stations’ network in Romania
Azerbaijan's state oil company SOCAR plans to increase the number of its gas filling stations in Romania, Romanian media reported.
Reportedly, the new 38th gas filling station under the brand name of SOCAR will be opened in Romania's Satu Mare city.
"SOCAR has already submitted the necessary documents to Satu Mare City Hall. It is planned to build the filling station on the way out of the city towards Petea. SOCAR has already purchased a land plot covering an area of 5,400 square meters. The filling station will have three MPD pumps. It is also planned to have a fast food restaurant, a parking lot and a consumer goods store there," said the report.
The project for construction of gas filling stations is a part of SOCAR's strategy for developing its filling stations' network in the areas of heavy traffic. The first phase of public debates on issuing permission for construction of the filling station will be held in Satu Mare City Hall Jan.8.
Currently, SOCAR has filling stations in 18 regions of Romania.
SOCAR is the sole producer of petroleum products in Azerbaijan. The company also has filling stations in Azerbaijan, Georgia, Ukraine, Romania and Switzerland.
First batch of Chinese oil output materials delivered to Azerbaijan
The first consignment of Chinese oil production materials have been delivered to field operations in Azerbaijan, said Canada's Zenith Energy company, which is the operator of Azerbaijan's largest onshore block of oil fields Muradkhanli-Jafarli-Zardab.
The materials were delivered via 23 trucks, according to the company.
Azerbaijan's state oil company SOCAR and Zenith Aran Oil Company signed a Rehabilitation, Exploration, Development and Production Sharing Agreement (REDPSA) in March 2016 for a block that includes the Muradkhanli, Jafarli and Zardab oilfields. These fields cover an area of 642.2 square kilometers. Production under the agreement began in August of 2016.
Zenith holds a 80-percent participating interest in the three fields within the contract area, while SOCAR retains the remaining 20 percent. The duration of the agreement is 25 years, with a potential extension of five additional years.
Which factors to push oil prices up in 2018?
Prospects for 2018 oil market are rather bullish but there is a big question mark, Francis Perrin, Senior Fellow at the OCP Policy Center (Rabat) and Senior Research Fellow at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.
He pointed out that non-OPEC oil supply will increase this year as it was the case in 2017.
"In fact this increase will be more important in 2018 than last year. Once more the US will be the main driver with a rise in its national production of more than 1 million barrels per day. This increase is the main obstacle this year to the rebalancing of the world oil market to which OPEC and several non-OPEC countries have significantly contributed since the end of 2016," added the expert.
On the other hand, Perrin noted that oil prices are now at their highest level since December 2014.
"Apart from the situation in Iran, the recent closure of the Forties pipeline in the North Sea (it was reopened at the beginning of 2018), an attack against a pipeline in Libya and a severe winter in several OECD (Organization for Economic Co-operation and Development) countries there are other factors explaining the rise in world oil prices. World economic growth is solid; oil demand is increasing; emerging and developing countries need more and more oil; OPEC has reduced its output in 2017 and these cuts have been extended until the end of 2018; ten non-OPEC countries, including Russia and Azerbaijan, are cooperating with OPEC; and crude and refined products stocks in OECD countries are being reduced. The oil market is near a state of balance between supply and demand," he concluded.
Plans on drilling wells at Azerbaijan’s West Absheron field in 2018 revealed
KTIB Holding, based in Baku, plans to drill nine more wells at Azerbaijan's West Absheron oil field in 2018, Trend learned from KTIB.
"In 2018, we will continue turnkey construction of wells at #54 platform at West Absheron field, as well as gas injection wells in Garadag and Kalmaz site for the gas storage facility," said the source in KTIB.
The company will wrap up the work at the platform #54 approximately by June 15, 2018.
Aside from drilling, KTIB also provides well completion services, noted the source.
"By late 2018, we plan to start work on a new platform at Chilov field," added the source.
KTIB carries out geophysical survey in real time regime at each well on the customer's request.
West Absheron field is owned by SOCAR's Absheronneft Oil & Gas Extraction Department.