BAKU

Azerbaijan slightly increased oil and gas condensate production, while its natural gas output was boosted by access to European markets, emerging as one of the country’s most lucrative exports in 2021.

Oil and gas condensate production rose by 0.1 percent last year from a year earlier to 34.581 million tonnes, while natural gas output increased 18.1 percent to 43.864 billion cubic metres (bcm), the State Statistics Committee said.

The volume of marketable oil was 34.513 million tonnes, 0.1 percent up from 2020. The production of commercial gas rose to 32.574 bcm in 2021, 22 percent up from 2020.

The bulk of Azerbaijan’s oil output comes from its Azeri-Chirag-Guneshli (ACG) oilfields, operated by British oil major BP. The country uses the Baku-Tbilisi-Ceyhan (BTC) pipeline via Georgia and Turkey to export oil from the ACG. It also exports oil with the Baku-Novorossiisk pipeline via Russia, the Baku-Supsa pipeline via Georgia and by rail in Georgia.

Azerbaijan mainly produces natural gas at the Shah Deniz field. The BP-led consortium, which develops the Shah Deniz project, has been pumping gas from the offshore field’s first phase since 2006, delivering more than 10 bcm a year of gas to Azerbaijan, Georgia and Turkey. The second phase started output in 2018, adding 16 bcm of gas production capacity at its peak to bring total capacity to 26 bcm. There are other oil and gas fields in the country, although their output is mainly used for domestic consumption.

In 2020, Azerbaijan produced 34.585 million tonnes of oil and gas condensate, while natural gas output was 36.713 bcm.  The country exported 17.878 million tonnes of oil and 13.396 bcm of gas.

The country projects stable oil production and rising gas output in the next four years.

Oil and condensate production in 2022 is projected at 34.83 million tonnes, slightly up from the output expected this year and 0.24 million tonnes more than in 2020, the government said in its forecasts for 2022-25. The government acknowledges that oil production is unlikely to exceed 34 million tonnes after 2025. The country’s confirmed reserves are estimated at 1.45 billion tonnes.

As for gas production, Azerbaijan forecasts to produce 43.514 bcm of gas in 2022.