BAKU

Azerbaijan is set to increase oil production by 7,000 barrels per day (bpd) in October to 647,000 bpd under a fresh decision made by the OPEC+ group of oil-producing nations that Baku has welcomed.

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. Other former Soviet oil-producing countries, Russia and Kazakhstan, are also OPEC+ members.

In April 2021, 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.

In July, OPEC+ ministers decided to increase total production from August by 400,000 bpd every month and later by another 400,000 bpd from October. It has been made amid a rising number of COVID-19 infections across the world and firm prices on oil markets.

The new deal agreed on Monday envisages a further increase by another 400,000 bpd “until the parties agree to lift the restrictions”.

Azerbaijan’s Energy Ministry welcomed the decision and is now scheduled to produce 647,000 bpd in October.

Kazakhstan is set to increase oil production to 1.524 million bpd in October, up from 1.508 bpd in September.

Azerbaijan reduced total oil and gas condensate production by 1.6 percent year-on-year to 23.05 million tonnes in the first eight months of this year.

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 August that oil output at its projects in Azerbaijan declined to 468,000 bpd in the first half of 2021 from 498,000 bpd a year earlier.

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