BAKU

Azerbaijan increased oil shipments via Russia in the first half 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 498,550 tonnes of oil via Russia in January-June, Russia’s Central Dispatch Office of the Fuel and Energy Complex, said in a report. Oil exports via the Baku-Novorossiisk pipeline increased 16.9 times compared with the first half of 2020.

In June this year, oil shipments totalled 84,900 tonnes, it said.

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.

Azerbaijan pumps oil through a 1,330-km pipeline from the capital Baku to Novorossiisk, a port on Russia’s Black Sea coast. The oil-rich country has used this pipeline 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. BP said in May that oil output at its projects in Azerbaijan declined to 484,000 barrels per day (bpd) in the first quarter of 2021 from 524,000 bpd a year earlier.

Oil and gas condensate production declined 6.2 percent from January to May from a year earlier to 14.309 million tonnes, the State Statistics Committee said.

The volume of marketable oil was 14.282 million tonnes from January to May, 5.9 percent down from the same period last year.

Most of Azerbaijan’s oil is produced at the giant off-shore Azeri-Chirag-Guneshli (ACG) oilfields, through a BP-led consortium in which Azerbaijan’s state energy firm SOCAR is a shareholder.