BAKU

Azerbaijan increased oil shipments via Russia in the first nine months of this year despite a decline in oil production, making up for the period last year when maintenance works forced it to suspend shipments through its northern neighbour’s territory to fulfil its contractual obligations.

Azerbaijan shipped 754,000 tonnes of oil via Russia in January-September, up from 330,000 tonnes shipped in the same period last year, Russia’s Central Dispatch Office of the Fuel and Energy Complex, said in a report.

In September this year, oil shipments totalled 85,000 tonnes, it said. Shipments in October are expected at 170,000 tonnes.

Azerbaijan’s state energy firm SOCAR stopped supplies to Russia’s Black Sea’s port of Novorossiisk in March 2019, citing planned maintenance on the Baku-Novorossiisk pipeline. The company diverted crude flows to its own Baku-Tbilisi-Ceyhan pipeline after the suspension of transit via Russia. Shipments resumed on July 15 last year and the total transit of oil from Azerbaijan via Russia amounted to 613,029 tonnes in 2020.

Shipments were suspended again in January 2021, but SOCAR this year signed a contract with Russian oil pipeline operator Transneft to transport more than one million tonnes of oil through the Baku-Novorossiisk pipeline.

SOCAR said in March it planned to boost its oil transit via Russia by 1.8 times year-on-year in 2021. The rise in shipments this year is explained by the absence of supplies in the first six months of 2020. In 2020, SOCAR exported 613,290 tonnes of oil via the Baku-Novorossiisk oil pipeline.

In 2022, SOCAR plans to transport 1.209 million tonnes of oil via Russia, up from 1.09 million tonnes that is planned to be shipped this year.

Azerbaijan pumps oil through a 1,330-km pipeline from the capital Baku to Novorossiisk, a port on Russia’s Black Sea coast, a route it has used since 1997. It also exports oil via Georgia and Turkey through the Baku-Tbilisi-Ceyhan (BTC) pipeline and via Georgia by rail and through the Baku-Supsa pipeline.

Measures to contain the spread of the COVID-19 pandemic last year, impacting mobility and production across the world, significantly affected global demand for oil,  forcing oil producers to eventually cut their production levels. In Azerbaijan, oil production is falling due to declining oil resources at its main offshore Azeri-Chirag-Guneshli (ACG) oilfields. The block is developed by an international consortium led by British oil major BP. SOCAR is a shareholder of the consortium.

Azerbaijan reduced total oil exports by 9.5 percent year-on-year to 18.771 million tonnes in January-August. The total value of oil exported during the first eight months of this year amounted to $8.499 billion, 25.1 percent more than in the same period last year. The share of oil in the total export structure in January-August amounted to 65.7 percent.