BAKU, Azerbaijan, February 26. An informed source in the State Oil Company of Azerbaijan (SOCAR) spoke last week about possible annual decrease in SOCAR's oil production at existing fields by five percent, and gas production - by seven percent by 2030, Trend reports.
In light of such a possible scenario, SOCAR has planned to drill new wells to potentially identify new productive horizons.
By the end of 2024, bp and SOCAR may have established a plan to prevent a steep fall in output in the major Azeri-Chirag-Gunashli (ACG) oil-bearing block, bp's vice president for external relations and communications in the Caspian region Bakhtiyar Aslanbayli said.
"The rate of fall in ACG production exceeded our expectations a few years ago. But we must solve these difficulties. Discussions with SOCAR are still ongoing. I expect that during 2024, these conversations will come to a particular end and a certain program will be devised to avert a dramatic decrease in production at ACG," Aslanbayli noted.
In 2023, production at ACG fell by almost 13-14 percent.
The Azeri Central East (ACE) platform will produce oil from three wells in 2024, Aslanbayli also said.
"A total of 48 production wells will be drilled from the ACE platform over the next few years, which will reduce the rate of oil production decline in the ACG block of Caspian fields," he pointed out.
Azerbaijan has emerged as one of the top 10 oil exporters to Europe in 2023, the Azerbaijani Oil Research Center said. The exported volume amounted to 20.3 million tons (2.6 percent more than in 2022) for $13.4 billion.
Eurostat data showed that overall, last year, Azerbaijan exported energy resources to the EU for a total of 18.8 billion euro.
Azerbaijan also supplied 306,900 tons of petroleum products to
the eurozone (EZ), totaling 186.5 million euro. The quantity of
petroleum products supplied increased by 17.4 fold, while sales
revenue increased by 12.3 times.
On natural gas, the EU as a whole acquired 492,900 terajoules
(increasing 2.5 percent by 2022) at a cost of 6.2 billion euro.
Of the total volume of urea produced in Azerbaijan in 2023, one-third was exported to EU countries.
EU countries purchased 148,800 tons of urea from Azerbaijan out of the total production volume of SOCAR Carbamide of 454,000 tons.
Over the course of five years, the SOCAR Polymer facility produced 256,460 tons of high-density polyethylene. Of these, 229,585 tons were exported, while 17,500 tons were used to meet domestic demand.
Kazakhstan is analyzing the possibility of using the Baku-Supsa pipeline, which has a throughput capacity of five million tons per year, the Minister of Energy of Kazakhstan Almassadam Satkaliyev told the Romanian Adevural.
Earlier, a source in the Ministry of Energy of Kazakhstan reported that the issue of considering the possibility of transporting Kazakh oil via the Baku-Supsa oil pipeline in the amount of up to three million tons per year is being discussed with the Azerbaijani side.
SOCAR is assessing the feasibility of transporting approximately 2.2 million tons of Kazakh oil per year through the Baku-Tbilisi-Ceyhan (BTC) pipeline, informed sources said.
"SOCAR is employing the following model in commercial negotiations: whether the additional transit revenue from the additional Kazakh oil through BTC can offset the losses from the deterioration in quality, as Kazakh oil has a higher sulfur content than the BTC Blend (the basis of this oil mix through BTC is the high-quality Azeri Light oil). Negotiations on the volume of 2.2 million tons are ongoing, but the outcome will depend on commercial calculations," noted one of the sources.
AD Ports Group (Abu Dhabi), a vertically integrated group of companies, is considering investment opportunities in SOCAR projects related to logistics and transportation of products of oil refining and petrochemicals, an informed source said.
The Atlantic Council's Global Energy Center in Washington hosted Azerbaijani-American discussions on Azerbaijan's role in global energy processes, Azerbaijani Energy Minister Parviz Shahbazov wrote on X.
"At the meeting organized by Landon Derentz, director of the Atlantic Council's Global Energy Center, we had interesting discussions on Azerbaijan's strategic role in global processes related to energy, energy security, and energy transition," the publication said.
Shahbazov also said that the partnership between Azerbaijan and the US is of special importance in implementing Azerbaijan's energy security initiatives and delivering Caspian Sea oil and gas resources to global markets.
During the debates, the Southern Gas Corridor's vital role in
ensuring Europe's energy security was highlighted. Azerbaijan, the
COP29 host, presented its policies on accelerating the energy
transition at the national and global levels, decarbonization,
methane emissions reduction, and climate finance, as well as the
path for renewable energy development.
"Azerbaijan and the US have reached an agreement to hold
discussions aimed at aligning energy security and climate
objectives," noted the Azerbaijani Energy Ministry, following a
meeting between the head of the ministry Parviz Shahbazov, and US
Special Assistant to the President Sarah Ladislaw.
The meeting delved into the significance of sustained collaboration for executing regional and global energy security initiatives. Additionally, discussions covered the role of the Southern Gas Corridor (SGC) amidst the complex energy crisis in the European Union.
"Over the past three years, the Southern Gas Corridor has supplied Europe with over 31 billion cubic meters of natural gas. Currently, Azerbaijan is spearheading the expansion of SGC and the enhancement of gas deliveries to Europe," the ministry added.
During the meeting with Ladislaw, emphasis was also placed on Azerbaijan's abundant renewable energy potential, which is directed towards achieving the country's energy transition goals and diversifying energy supplies to Europe.
The parties also discussed preparations for COP29 in Baku.
On February 21, Shahbazov discussed prospective forms of Azerbaijani-US cooperation on energy and decarbonization issues during a meeting with his counterpart Jennifer Granholm in Washington.
"The meeting discussed the development of bilateral energy cooperation at a new stage, natural gas supplies to the EU, development of green energy, and issues related to COP29 in Baku in November," the ministry noted.
The Azerbaijani minister informed the head of the US Energy Department about the progress in the development of green energy corridors Caspian-Black Sea-Europe and Central Asia-Azerbaijan-Europe.
"The importance of these corridors is assessed in terms of interregional integration, energy security, and energy transition," the ministry noted.
Shahbazov also said Azerbaijan plans to integrate two GW of capacity from renewable energy sources into the energy system by 2027, which will raise the share of renewable energy sources in the country's total installed capacity to 33 percent.
The US expresses interest in regional and international projects of Azerbaijan, Shahbazov said during a working visit to the US.
"During the meetings at the White House, State Department, and US Department of Energy in the discussion of energy cooperation between the US and Azerbaijan, the interest in regional and international projects implemented by Azerbaijan, as well as those planned was noted," he added.
The European Commission won't pursue the Trans-Caspian Gas Pipeline (TCG) project, admitting missing this opportunity 10-15 years ago, the Caspian Policy Center's (CPC) Advisory Board Member Richard Hoagland (who earlier worked as a diplomat in the Caspian region) said commenting on recent meetings with EU officials in Brussels.
Azerbaijan intends to cooperate with the US in the process of expanding the Southern Gas Corridor (SGC), similarly to the first stage of the creation of the corridor, said Shahbazov during a meeting in Washington with US Assistant Secretary of State for Energy Resources Geoffrey Pyatt.
"Expanding gas supplies necessitates enhancing the capacity of both the Southern Gas Corridor and the Solidarity Ring project," the Azerbaijani Ministry of Energy noted.
European Commissioner for Energy Kadri Simson will visit Azerbaijan on March 1 to participate in the 10th Ministerial Meeting of the Southern Gas Corridor Advisory Council and the 2nd Ministerial Meeting on green energy issues, s source in the European Commission (EC) said.
The European Bank for Reconstruction and Development (EBRD) is considering the possibility of providing a guaranteed long-term loan by the government to the company "NOMAGAS" in North Macedonia, amounting to up to 98.59 million euros for the construction of pipeline sections for the supply of gas and hydrogen to North Macedonia, a source in the EBRD said.
This involves the construction of a connecting natural gas pipeline with Greece (66 km; interconnection), gas pipelines Gostivar – Kicevo (34 km; section 1), and Sveti Nikole – Veles (28 km; section 2) in North Macedonia. The project aims to diversify gas supplies to North Macedonia through the Trans-Adriatic Pipeline (TAP - European part of the Southern Gas Corridor) and LNG terminals in Greece, while also providing the opportunity for gas supply to neighboring Serbia, the source emphasized.
Kadri Simson said that European Commission encourages EU companies to engage in gas supply agreements with Azerbaijan.
The expansion of the Interconnector Greece-Bulgaria (IGB) will be in focus of the upcoming Southern Gas Corridor Advisory Council’s meeting to be held in Baku March 1, Teodora Georgieva, Executive Officer of ICGB, the pipeline operator, said.
According to her, ICGB will be focusing on topics that are also of relevance to a much wider international audience – the pipeline’s capacity expansion from three to five billion cubic meters per year and the impact this will have in the region, joint work under the Vertical Gas Corridor initiative.
“We’ve also been working hard with other TSOs within the Vertical Gas Corridor to better plan and coordinate the development of the existing infrastructure in the region for improved security and diversification of supplies. Just recently Moldova, Ukraine and Slovakia joined the initiative (EU project),” the executive director added.
The Azerbaijan Energy Regulatory Agency (AERA) and the Georgian National Energy and Water Supply Regulatory Commission (GNERC) signed a Memorandum of Understanding in the Field of Energy Regulation on February 21.
The preliminary results of the energy efficiency market evaluation for the formulation of the National Building Renovation Program were addressed during a seminar in Baku with the participation of World Bank (WB) and EU representatives, as well as Azerbaijani experts on February 22.
According to the Azerbaijan Ministry of Energy, the event was part of the "Energy Efficiency and Climate" technical aid initiative, which was carried out by the World Bank and the EU via the Azerbaijan Rapid Technical Assistance Facility (AZTAF).
