BAKU, Azerbaijan, April 27. The Deepwater Gunashli production platform has been suspended for 15 days from April 25, bp (the operator of production on the Azerbaijani block of fields Azeri-Chirag-Deepwater Gunashli) said this week, Trend reports.
The suspension was due to scheduled maintenance work on the platform and the absence of hydrocarbon production during this period.
This week, the same production platform marked its commissioning anniversary. Production from the Gunashli Deepwater in the Caspian Sea has been ongoing since April 22, 2008, as part of the Azeri-Chirag-Gunashli (ACG) project.
The State Oil Company of Azerbaijan (SOCAR) said that over the entire operation period of this platform, it helped extract 638 million barrels of oil and 18.2 billion cubic meters of gas.
The average oil production rate on this platform in 2023 was 67,300 barrels per day.
One of the participants in the ACG project since autumn 2019 has been the Hungarian MOL oil and gas company, which has invested around $2 billion in Azerbaijan's energy sector over four years, the Managing Director of MOL Azerbaijan Attila Somfai noted during the 10th meeting of the Azerbaijani-Hungarian Intergovernmental Commission held on April 25 in Baku.
He mentioned the company's desire to expand its business in Azerbaijan and discussed potential projects with SOCAR.
MOL holds a 9.57 percent stake in the Azeri-Chirag-Gunashli project (acquired from American Chevron in 2019) and an 8.9 percent stake in the Baku-Tbilisi-Ceyhan pipeline (also acquired from Chevron).
An informed source said that MOL has begun negotiations with Azerbaijan regarding the possible acquisition of a portion of its share in the Shah Deniz project.
Azerbaijan is represented in this project through the Southern Gas Corridor (SGC) company, with a total stake of 21.02 percent.
The outcome of the negotiations depends on commercial aspects.
Other participants in the Shah Deniz project include bp (29.99 percent, production operator), LUKOIL (19.99 percent), the Turkish TPAO (19 percent), and the Iranian NICO (10 percent). These companies also hold the same shares in the South Caucasus Pipeline (SCP).
Another source, a participant in the Azerbaijani-Hungarian negotiations, reported that SOCAR plans to involve the Hungarian group of companies, MOL, in oil and gas production projects in third countries. The projects' geography includes Europe and Africa, and their commercial feasibility will be studied.
It has also been revealed that the largest Hungarian wholesale natural gas trader, MVM CEEnergy Zrt, began using gas supplied to it by SOCAR Trading in April 2024, delivered to them in the summer of 2023. This involves a volume of 50 million cubic meters. Hungary relies on gas exports for 80–90 percent of its needs. About 70 percent of its annual requirement of eight to nine billion cubic meters is met by Russia, while the rest comes from its own gas production, as well as gas from Qatar, Algeria, Azerbaijan, and other sources.
A source at MVM CEEnergy Zrt said that Hungary is not concerned about gas supply for 2024, as its gas storage is already filled to over 60 percent. Additionally, advantageous gas procurement contracts are in place.
During negotiations in Baku on April 25, MVM CEEnergy Zrt and SOCAR agreed to discuss gas storage and trading for the medium and long term.
Gas production in Azerbaijan is increasing, particularly from the Caspian fields of Shah Deniz and Absheron.
The International Energy Agency (IEA) noted in its latest report on the world gas market that gas production in Azerbaijan is increasing by an average of three to four percent.
This week, it was exclusively revealed that the final investment decision (FID) for the second phase of development of the Caspian Absheron gas condensate field has been postponed from autumn 2024 to mid-2025 due to the need for more time for discussions among the project's participating companies.
The participants in the Caspian Absheron project are SOCAR (35 percent), TotalEnergies (35 percent), and the national company ADNOC from Abu Dhabi (30 percent). The official deal for ADNOC's entry into the project was confirmed in February 2024.
Gas extraction from Absheron began on July 10, 2023, as part of the first phase of field development. The peak production for phase 1 may occur in 2024, reaching an annual production of 1.5 billion cubic meters of gas.
The second phase of Absheron aims to increase the total gas production at this field to five-six billion cubic meters per year, providing Azerbaijan with additional gas for export.
SOCAR also announced plans to search for gas in other regions of the world. Having won a tender in October 2023 for exploration work in the "I-6" cluster in the Israeli economic zone of the Mediterranean Sea (where gas reserves are located), it is not abandoning this project and is awaiting resolution of the complex geopolitical situation in the region along with project partners bp and NewMed.
It has also been revealed that Azerbaijan aims to establish oil and gas cooperation with Algeria (one of the world's leading countries in liquefied natural gas production).
During a meeting between the Minister of Energy of Azerbaijan and an Algerian delegation, it was announced that both sides recognized the potential for cooperation between the relevant ministries of the two countries, as well as between SOCAR and Sonatrach.
This week, the Speaker of the Armenian Parliament, Alen Simonyan, stated that it would be positive if Armenia were to purchase gas from Azerbaijan. Azerbaijan reacted to this by stating that "potentially Armenia could be a recipient of Azerbaijani gas, considering the geographical proximity and infrastructure.".
President of SOCAR (State Oil Company of Azerbaijan) Rovshan Najaf met in St. Petersburg with Chairman of the Board of Russian PJSC Gazprom Alexey Miller, and the parties discussed issues of interaction between companies in the gas sector.
To note, Najaf held discussions with Miller in Moscow in late February.
In 2022, Azerbaijan handled a deal with Russia for the purchase of gas and seasonal supplies.
Azerbaijan's revenues from oil and gas export operations are accumulated in the State Oil Fund of Azerbaijan (SOFAZ), established in 1999. As of the beginning of April 2024, the assets of SOFAZ, essentially its investment portfolio, amounted to $57.373 billion.
This week, SOFAZ provided information on the distribution of its investment portfolio: 69.5 percent in US dollars, 19.4 percent in euros, 4.9 percent in British pounds, 0.7 percent in Australian dollars, 1.5 percent in Japanese yen, 1.1 percent in Chinese yuan, and 3.6 percent in other currencies.
The fund's data shows that bonds and money market instruments comprised 55.3 percent of its asset portfolio, stocks accounted for 25.7 percent, real estate for 5.8 percent, and investments in gold (104.6 tons) for 13.2 percent.
Besides, 30.3 percent of its investment portfolio funds are invested in Europe and 14.4 percent in the Asia-Pacific region.
It has also been revealed that Azerbaijan is prepared to commence oil product deliveries to Kyrgyzstan and is exploring the possibility, through its subsidiary SOCAR Trading, to supply the new oil refinery "Junda" (with a capacity of over 1 million tons per year) in Kyrgyzstan with certain volumes of oil from third countries.
ELECTRIC POWER INDUSTRY
It became known that in Azerbaijan, in the first quarter of 2024, electricity production amounted to 7.1 billion kWh, of which 360.3 million kWh were exported. It should be noted that from January through March 2023, electricity generation in the country amounted to 7.7 billion kWh, with exports totaling 1.2 billion kWh.
Additionally, it has been revealed that in the period mentioned this year, enterprises in Uzbekistan produced around 20.1 billion kilowatt-hours of electricity (a 0.9 percent increase compared to the first quarter of 2023). This information was provided by the Uzbekistan Statistical Agency.
This week, it was announced that the total nominal capacity of power plants in Iran reached 92,841 megawatts (MW), with the country's electricity production capacity increasing by 2,036 MW over the past two years.
