BAKU

Azerbaijan is set to increase oil production by 7,000 barrels per day (bpd) from October under a fresh decision made by the OPEC+ 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 the 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, the OPEC+ ministers decided to increase total production from August by 400,000 bpd every month and to hold monthly consultations for assessing the market and the feasibility of increasing production.

The new deal envisages further increase by another 400,000 bpd from October. It has been made amid a rising number of the COVID-19 infections across the world and developments on the oil markets.

Azerbaijan’s Energy Ministry welcomed the decision. The resource-rich ex-Soviet country is now scheduled to produce 640,000 bpd from the next month.

Azerbaijan reduced total oil and gas condensate production by 2.6 percent year-on-year to 20.096 million tonnes in the first seven 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).