Azernews.Az

By Nigar Abbasova

Azerbaijan has so far extracted some 407 million tons of oil and 124.3 billion cubic meters of associated gas from the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields, which lies 120km off the coast of Azerbaijan and is considered to be the largest oilfield in the Azerbaijani sector of the Caspian Sea.

SOCAR’s head Rovnag Abdullayev said that the country intends to extract about 5 billion barrels of oil till the expiration date of the PSA contract, while the production will be provided by means of new investments and increase of oil recovery efficiency.

“The ACG block has been bringing profit for almost 17 years. The volume of profitable oil, which falls to a share of Azerbaijan, is growing steadily. We are planning to reach the level of 60 percent this year. Moreover, within the project, the country receives associated gas free of charge, and the fact is a very important contribution to the economy of the country,” he said.

The country received some 7.2 million cubic meters of associated gas from the field on a daily basis in January-June, while the total volume of extraction stood at 1.31 bcm. The volume of proven oil reserves of Azerbaijan is currently estimated at 2 billion tons, while the volume of gas amounts to 2.6 trillion cubic meters (tcm). The forecasted volume of oil and gas reserves of the country stand at 4.5 billion tons and 5.4 tcm respectively.

A landmark agreement on developing the ACG oil and gas fields, which is also known as the contract of the century was signed in 1994, while production at the field was launched in 1997.

The term of the agreement is 30 years. The signing of the contract marked the beginning of a new phase in the development of Azerbaijan's petroleum industry. The proven oil reserves of the block amounts to approximately one billion tons.

Foreign investments

More than $68.2 million was invested in the oil and gas sector of the country from 1995 to 2016. SOCAR is representing Azerbaijan in 17 PSA-contracts (Production sharing agreement), signed with 23 companies representing 15 countries.

Moreover, the activity of 36 joint ventures, six alliances and subsidiary companies operated by SOCAR in foreign countries cover all spheres of oil and gas industry. Such energy giants as BP, Total, Petronas, TPAO, Chevron, Statoil, LUKoil are among the foreign partners of the company.

Abdullayev said SOCAR has already turned into the company, which meets all modern requirements and is able to compete in the international market.

Economic indices

The budget of the company for the next year will be formed given the price of oil at $40 per barrel. Total assets of the company amounted to 39.95 billion manats ($24.23 billion) as of late 2015 as compared to the rate of 24.07 billion manats ($14.60 billion) in 2014.

SOCAR’s aggregate capital stood at 14.65 billion manats ($8.8 billion) compared the rate of 11.06 billion ($6.70 billion) in 2014.

The company transferred some 788.85 million manats ($481.30) to the state budget in January to July 2016. The payments to the budget decreased by 9.77 percent as compared the same period last year.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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