BAKU, Azerbaijan, Jan. 22
By Leman Zeynalova - Trend:
This week in the Azerbaijani energy sector has been mainly remembered for the oil production forecasts in the country for 2022-2023.
Azerbaijan’s oil production in 2022 is expected to stand at 590,000 barrels per day, as compared to 594,000 barrels per day in 2021, the US JP Morgan Bank forecasts.
The bank expects the country’s oil output at 590,000 barrels per day in all four quarters of 2022, while these figures were equal to 593 bpd, 598 bpd, 596 bpd, 591 bpd in four quarters of 2021, respectively.
JP Morgan forecasts Azerbaijan's oil output at 583 bpd in 2023. The quarterly production in 2023 is expected as follows: 593 bpd in Q1, 588 bpd in Q2, 576 bpd in Q3 and 577 bpd in Q4.
OPEC expects that the production of liquid hydrocarbons in Azerbaijan in 2022 will grow by 0.08 million barrels per day up to an average of 0.82 million barrels per day.
The International Energy Agency (IEA) expects Azerbaijan’s oil production to stand at 0.72 million barrels per day in 2022, as compared to 0.70 million barrels per day in 2021. The agency forecast the country’s oil output at 0.71 million barrels per day in Q1 and 0.72 million barrels per day in Q2 and Q3 each. No data is available for Q4 2022.
This week, the Ukrainian and Turkish subsidiaries of the State Oil Company of Azerbaijan (SOCAR) have disclosed the plans for 2022.
Ukrainian subsidiary of Azerbaijan’s state oil company SOCAR plans to continue expanding its network in 2022.
The company plans to continue the organic growth of our network by constructing two or three new complexes during the year. The company also plans to open the socially significant, multifunctional complex with a service infrastructure in Chongar, the Kherson region. This is a joint innovative project in collaboration between the government of Ukraine and the state-owned Azerbaijani company SOCAR Energy Ukraine.
Moreover, the company stressed that sales volumes of fuel reached the pre-crisis level. The sales volume increased by 16 percent in 2021 compared to 2020.
SOCAR Turkey, a subsidiary of Azerbaijan’s state oil company plans to bring the production capacity of its STAR Refinery to 13 million tons by increasing its effectiveness with the existing infrastructure.
The refinery, which is able to process 37,500 tons of crude oil per day, has obtained the necessary licenses to increase its capacity, which rose to 11 million tons as of 2021.
SOCAR Turkey, a subsidiary of Azerbaijan’s state oil company, is evaluating its final investment decision on the Merkury project, the second petrochemical plant taking into account the conditions emerging in the period of the COVID-19 pandemic.
The company is in talks with partners on this important investment.
SOCAR Turkey was planning to conduct a field survey for this petrochemical facility in 2020 and to make a final decision based on the results. However, it had to change business plans due to the COVID-19 pandemic.
The budget for the Ighdir-Nakhchivan gas pipeline project for 2022 has been also disclosed this week.
It is planned to invest 100 million Turkish liras ($7.4 million) in the Ighdir-Nakhchivan gas pipeline in 2022.
The rest of the total 185 million Turkish liras ($13.7 million) will be allocated in 2023.
The construction of the pipeline that will transport natural gas to Nakhchivan via Ighdir will begin this year. The daily capacity of the pipeline is 1.5 million cubic meters.
Moreover, a metering station will be built in Dilucu, Ighdir as part of the project. The station, which will cover an area of 20,000 square meters, will provide the flow balance of the pipeline. Thus, natural gas will reach Nakhchivan in the safest way.
Moreover, the timely construction of the Greece-Bulgaria gas interconnector (IGB) continues to be on the agenda.
If the construction of the gas interconnector between Greece and Bulgaria (IGB) is delayed even further, Bulgargaz will have to hold new negotiations for an alternative route for gas from Azerbaijan.
Currently, Azerbaijani gas is delivered to Bulgaria via an alternative route due to the delays in IGB’s construction. Bulgaria receives about 350 million cubic meters of gas per year from Azerbaijan, although the supply of 1 billion cubic meters has been agreed. The terms of the agreement with Azerbaijan will expire on June 30, 2022.
Bulgargaz notes that negotiations were held with the Azerbaijani supplier to change the route after a "long in-depth professional analysis and assessment" carried out jointly with the Bulgarian Energy Holding (BEH) and the Ministry of Energy. The decision to change was not taken solely by the management of the gas company.
The discussions have been held between the leadership of SOCAR and the Norwegian Equinor company this week.
Seismic surveys carried out at the "Aypara" area in the Azerbaijani sector of the Caspian Sea give grounds to assume a high probability of the presence of commercial reserves of oil and gas there.
According to SOCAR, the sides also discussed the implementation of the project to develop the Karabakh field, implemented by companies on a parity basis, and the planning of exploration drilling at the promising Dan Ulduzu-Ashrafi-Aypara area.
The sides exchanged views on other areas of cooperation, including the Azeri-Chirag-Deepwater Gunashli block of fields.
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