BAKU

Azerbaijan produced 610,100 barrels per day (bpd) of oil in June, up from 586,000 bpd in May 2021 and in line with the country’s obligations under the OPEC+ deal, the Energy Ministry said.

Production of oil and condensate totalled 705,100 barrels in June, up from 674,000 barrels in May.

The ministry said that oil production in June declined from 718,000 bpd produced in October 2018, when members of OPEC+ agreed to reduce oil production gradually.

As the COVID-19 pandemic disrupted production as well as demand for oil, OPEC+, a group of the Organisation of the Petroleum Exporting Countries (OPEC) and allied producers of which Azerbaijan is a member, cut output by a little more than 7 million bpd to support prices and reduce oversupply. Members of the group agreed to ease cuts gradually by 350,000 bpd in May, another 350,000 bpd in June and around 450,000 bpd in July.

Azerbaijan was scheduled to increase its oil output gradually from May under a fresh deal agreed in April at a ministerial meeting of the OPEC+. The country’s quota under OPEC+ obligations in May was 603,000 bpd and 610,000 bpd in June.

“Azerbaijan fulfilled its obligations on oil production within the framework of the OPEC + deal in June by 100 percent,” the ministry said.

Azerbaijan is expected to produce 620,000 bpd in July.

OPEC+ regular ministerial meeting initially scheduled on July 5 did not take place amid ongoing UAE opposition to extending the deal from its original April 2022 expiry until the end of next year without adjusting the Mideast country’s production baseline to better reflect its increased capacity.

Saudi Arabia’s oil minister Abdulaziz bin Salman told reporters that the OPEC+ coalition’s next meeting could take place no sooner than August, as an ongoing clash with the UAE stalled the group’s output policy past July.

Most of Azerbaijan’s oil production comes from the giant offshore Azeri-Chirag-Guneshli (ACG) oilfields, developed by a BP-led consortium. The country uses the Baku-Tbilisi-Ceyhan (BTC) pipeline via Georgia and Turkey to export oil from the ACG. It also exports oil through the Baku-Novorossiisk pipeline via Russia, the Baku-Supsa pipeline via Georgia and by rail in Georgia.

BP said in April that oil output at its projects in Azerbaijan declined to 484,000 bpd in the first quarter of 2021 from 524,000 bpd a year earlier.

BP said that in the first quarter, ACG completed three oil producer and two injector wells.

The consortium spent more than $142 million in operating expenditure and more than $463 million in capital expenditure on ACG activities in the first three months of 2021.

In 2020, Azerbaijan produced 34.585 million tonnes of oil and gas condensate, while natural gas output was 36.713 billion cubic metres (bcm).