Azerbaijan economy: Production at ACG dips again

12:32 | 02.12.2013
Azerbaijan economy: Production at ACG dips again

Azerbaijan economy: Production at ACG dips again

The Azeri-Chirag-Guneshli (ACG) oilfield, whichaccounts for 75% of Azerbaijan's output, produced on average 663,200barrels/day (b/d; 24.5m tonnes in total) in January-September 2013, according tothird-quarter results released by BP, the operator of the field, on November13th.ACG produced 8.1m tonnes of oil in the third quarter, a year-on-year declinefrom the equivalent period of 2012, when output totalled 8.4m tonnes. Oilproduction from the field over the first three quarters of 2013 was down by3.2% year on year. This is puzzling, as the initial figures from the State StatisticsCommittee (SSC) indicate a year-on-year decline in total oil production of just0.9%, to 32.54m tonnes. Other fields may have outperformed ACG; alternatively,it is possible that the SSC's initial output figures will be revised down inthe light of ACG data.

BP has been battling to stabilise oil production at the ACG field since a sharpdrop in output in the first half of 2012 led to public criticism of the companyfrom the president of Azerbaijan,

Ilham Aliyev. The latest figures mean that ACG has recorded year-on-yeardeclines in output in ten of the past 12 quarters. Capital expenditure has beenrising steadily, totalling US$2.04bn in the first nine months of 2013, compared with US$1.8bn in the equivalentperiod of 2012, and US$1.35bn in 2011.

Although production tends to be lower in the final quarter owing to seasonalfactors, we expect output to recover in year-on-year terms in October-December.Initial SSC figures for October show a year-on-year rise in total oil output inthat month of 11%. Nevertheless, ACG is unlikely to match total annual 2012output of 32.9m tonnes this year, as the Azerbaijani authorities have promised. Hitting this total would require production of around 8.4m tonnes ofoil in the final quarter, a level of output that ACG has not achieved in such aperiod since 2010.

We expect ACG production to rise in 2014, which will push up Azerbaijan's totaloil output to around 900,000 b/d (44.8m tonnes). In June 2013 Platts, an energyintelligence outlet, quoted Gordon Birrell, BP's regional president forAzerbaijan, as saying that output would rise from the current average of660,000 b/d this year to 700,000 b/d in 2015.

(Economic Intelligence Unit)ANN.Az

0
Follow us !

REKLAM