BAKU

Azerbaijan projects a decline in oil production from its Azeri-Chirag-Guneshli (ACG) oilfields and a rise in gas output from the Shah Deniz fields, boosted by access to European markets in 2022.

Oil and condensate production at the ACG block is projected at 170.1 million barrels (around 23 million tonnes) next year, 1.5 million barrels down from the output expected this year, the State Accounts Chamber said in its report.

In January-October this year, oil and gas condensate production declined 0.3 percent year-on-year to 28.8 million tonnes, while natural gas output increased 17 percent to 35.8 billion cubic metres (bcm) in the same period.

The bulk of Azerbaijan’s oil output comes from the 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.

In 2020, oil production at the ACG amounted to 174.6 million barrels.

Total oil and condensate production in Azerbaijan is projected at 34.83 million tonnes, almost unchanged from the amount expected this year and 0.24 million tonnes more than in 2020. The output can be adjusted depending on the OPEC + deal on restricting oil production, which includes Azerbaijan.

As for gas production, Azerbaijan forecasts production of 22.8 bcm in 2022 at the Shah Deniz offshore field, which is 7 percent more than the output expected by the end of 2021. It is also expected to increase the extraction of condensate from this field by 4.7 percent to 33.3 million barrels.

In total, the country forecasts production of 43.514 bcm of gas in 2022, up from around 41 bcm expected this year and 37 bcm produced in 2020.

The BP-led consortium, which is developing 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.