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Azerbaijan celebrates Oil Workers Day â€“ REVIEW

Azerbaijan celebrates Oil Workers Day â€“ <font color=red>REVIEW </font>

20 September 2011 10:12 (UTC +04:00)

â€œContract of the Centuryâ€ considers joint development of deep-water part of Azeri-Chirag-Gunashli oil field. By the order of Heydar Aliyev, September 20 is marked as a Day of Oil Workers in Azerbaijan since 2001.

Primarily, the contract was signed by 8 countries (Azerbaijan, US, Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) and 13 companies (Â«AmokoÂ», BP, Â«McDermottÂ», Â«UnocalÂ», ARDNÅž, Â«LUKoilÂ», Â«StatoilÂ», Â«ExxonÂ», TPAO, Â«PenzoilÂ», Â«ItochuÂ», Â«RamkoÂ», Â«DeltaÂ»). Thereafter, as a result of the changes among participants, BP (34,14%), Â«ChevronÂ» (10,28%), ARDNÅž (10,00%), Â«InpexÂ» (10,00%), Â«StatoilÂ» (8,56%), Â«ExxonmobilÂ» (8,00%), TPAO (6,75%), Â«Devon EnergyÂ» (5,63%), Â«ItochuÂ» (3,92%), Â«HessÂ» (2,72%) have also joined the contract.

3 years later after the signing of â€œContract of the Centuryâ€, on November 12, 1997, first oil was extracted. For the export of the first oil, Baku-Novorossiysk pipeline was launched since October 25, 1997.

Georgian Supsa port in the Black Sea was selected as the second direction for oil transportation. Since April 17, 1999, Azeri oil started to be transported via Baku-Supsa pipe. The biggest advantage of this route â€“ Azerbaijani oil was approached a world market in a clean form â€“ as Azeri Light.

Taking the plans on reaching oil production up to 45-50 mln tons, as well as perspective of transportation of oil reserves of Kazakhstan and Turkmenistan via Azerbaijan into account, the idea on realization of Main Export Pipeline was kicked off. And in September of 2002, the presidents of Azerbaijan, Turkey and Georgia held groundbreaking ceremony for Baku-Tbilisi-Jeyhan pipeline. Construction began in April 2003 and was completed in 2005. The Azerbaijan section was constructed by Consolidated Contractors International of Greece, and Georgia’s section was constructed by a joint venture of Franceâ€™s Spie Capag and UK Petrofac International. The Turkish section was constructed by BOTAÅž. Bechtel was the main contractor for engineering, procurement and construction. Pumping began on 10 May 2005 and reached Ceyhan in 28 May 2006. The first oil was loaded at the Ceyhan Marine Terminal (Haydar Aliyev Terminal) onto a tanker named British Hawthorn. The tanker sailed away from the port on 4 June 2006 with about 600,000 barrels (95.000 m3) of crude oil.

Shareholders of the BTJ are - BP (30.1%), Â«AzBTCÂ» (25.00%), Â«ChevronÂ» (8.90%), Â«StatoilÂ» (8.71%), TPAO (6.53%), Â«ENÄ°Â» (5,00%), Â«TotalÂ» (5.00%), Â«ItochuÂ» (3.40%), Â«InpexÂ» (2.50%), Â«ConokoPhillipsÂ» (2.50%) and Â«HessÂ» (2.36%).

169 mln tons of crude oil was transported via this pipeline so far, 1,624 tankers were pumped from Jeyhan.

Up to this day, the highest indicator of BTJ for one day was 1,044 barrels. In Q1 of 2011, nearly 18.2 mln tons or 135.7 mln barrels of oil was exported via BTJ. Currently, mainly Azeri-Chirag-Gunashli oil and Shahdeniz condensate is transported via BTJ from Azerbaijan. Besides, Turkmenistan oil is transported via this pipeline too.

Oil strategy revealed gas potential of Azerbaijan as well. The development of Shahdeniz deposit became Azerbaijan into big gas exporter. Shareholders of Shahdeniz are - BP (operator â€“ 25.5%), Â«StatoilÂ» (25.5%), ARDNÅž (10%), Â«LUKoilÂ» (10%), NICO (10%), Â«TotalÂ» (10%) and TPAO (9%).

Baku-Tbilisi-Erzurum project has been realized for the transportation of gas to Georgia, Turkey and Europe. This pipe allows transporting Azerbaijani gas to Turkey and South European countries. Shareholders of the project are - BP (technical operator -25.5%), Â«StatoilÂ» (commercial operator â€“ 25.5%), Â«AzÉ™rbaycan CQBK Ltd.Â» (10%), Â«LUKoilÂ» (10%), NICO (10%), Â«TotalÂ» (10%) and TPAO (9%).

Gas Project â€œShahdeniz, Phase-1â€ is sold to GOGC (Georgia), BOTAS and the BTC Company. In the first half of 2011 from the field were produced 3.07 billion cubic meters (108.4 billion cubic feet) of gas and 0.8 million tons (6.5 million barrels) of condensate, or approximately 17 million cubic meters (approximately 600 million cubic feet) of gas and 35.8 thousand barrels of condensate per day. In general, 7.13 million tons (about 56.3 million barrels) of condensate were exported from the deposit to the world market.

The production is expected to increase in future as new wells will be drilled during the coming years. Since the beginning of the operation in the future new wells will increase production. At the present time, the highest stable level of production with the â€œPhase 1â€ will be at 9 billion cubic meters of gas and approximately 50 thousand barrels of condensate per day.

Development of â€œShahdenizâ€ in its full capacity is a major project, aimed to increase the diversification of sources of gas and electricity in Europe, through the supply of Azeri gas to Europe via Turkey and the new Southern Gas Corridor. This project is considered to add approximately 16 billion cubic meters of gas on 9 billion cubic meters of gas produced with the â€œPhase 1â€. New South gas corridor will greatly enhance the security and diversification of gas imports to Europe. Engineering works are underway for providence of production of first gas in 2017.

In general, the â€œContract of the Centuryâ€ opened the way for agreements on other oil and gas fields of Azerbaijan. Thus, about $ 40 billion were invested in oil and gas sector of Azerbaijan in 1994-2010 years. During this period, 32 agreements on production sharing were signed foreign oil companies. It is projected that within the framework of these agreements, the volume of investments will reach $ 60 billion. Currently, 34 companies representing 15 countries are operating in oil and gas operations on land and in 30 fields located in the Azerbaijan sector of the Caspian Sea.

The development of oil sector, the growth potential of SOCAR allowed Azerbaijan to carry out exploration and drilling operations in the fields. During recent years, as a result of these works, two major gas-condensate fields were discovered only in the Azerbaijani sector of the Caspian Sea. Hydrocarbon reserves of â€œUmidâ€ are estimated at 200 billion cubic meters of gas and 30-40 million tons of condensate, and â€œAbsheronâ€ - 350 billion cubic meters of gas and 45 million tons of condensate. Strong results are forecasted to get on â€œNakhchivanâ€, â€œBabakâ€, â€œShafag-Asimanâ€ projects.

Note that, currently 91.8% of Azerbaijani export fall on share of oil and oil products.