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Expert opinion: BP must make official statement on reduction of oil extraction in the projects in Azerbaijan

12 October 2012 10:19 (UTC +04:00)

Remind that, during the meeting of the Cabinet of Ministers on the outcomes of the socio-economic development within 9 months of 2012, Azerbaijanâ€™s President Ilham Aliyev strictly criticized BP company and declared that unexpected recession in oil extraction was caused by the gross mistakes of BP that is leading the consortium on Azeri, Chirag fields.

To Bagirov, reduction of extraction is a fact and its reasons, as well as, if this reduction is connected with some objective factor, BP company must make official statement.

At the same time, economist Ogtay Hagverdiyev told APA that sharp decline in oil extraction during 2011-2014 within the framework of â€˜Contract of the Centuryâ€™ has even been reflected in the mid-1990s in the forecast chart. After 2014, oil extraction is expected from Deep Gunashli and it will stop the reduction. Hagverdiyev thinks it is very natural that the government, society and experts are worry about the recent reduction of oil extraction, decline in the share of oil in GDP.

Experts of APA-Ekonomist magazine note that during the last meeting of Cabinet, the President also brought to notice the statistical figures, which prove the reduction of extraction in Azeri and Chirag fields: â€˜In 2009 production forecast for Azeri, Chirag fields was 46.8 million tonnes. Actually, 40.3 tonnes of oil was produced. In 2010 the forecast was 42.1 million tonnes, while actually it was 40.6 million tonnes. In 2011 the forecast was 40.2 million, real production was 36 million tonnes. The forecast for 2012 is 35.6 million tonnes. Taking into account the current production, we can guess that BP will be unable to produce more than 33 million tonnes of oil from Azeri, Chirag fields by the end of the yearâ€™. Thus, this means that in recent years, BP company could not meet forecast production and make any statement on the matter.

It is interesting that the figures, reflected in the companyâ€™s reports, do not confirm the reduction: â€˜In Q1 this year, a total of 684 thousand barrels per day, or a total of 124.5 million barrels (16.8 mln. tons) of oil for 6 months were extracted from Chirag, Central Azeri, Western Azeri, Eastern Azeri and Deep Water Gunashli platformsâ€™.

But in Q1 last year, a total of 775.7 thousand barrels per day, or a total of 140.4 million barrels (19 mln. tons) of oil for 6 months were extracted from Chirag, Central Azeri, Western Azeri, Eastern Azeri and Deep Water Gunashli platforms. So, the reduction in annual comparison made 2.2 mln tons or 12%. The notable point here is the number of wells in most fields has decreased. Thus, it dropped from 18 to 16 in Central Azeri, from 20 to 16 in Western Azeri, from 20 to 15 in Eastern Azeri and it only increased in Chirag and Deep Water Gunashli fields. At the same time, it should be taken into account that the highest daily extraction was recorded in Azeri field and now, the most serious reduction is also being observed here. Thus, daily extraction in the Central Azeri has dropped from 216.1 thousand barrels to 161 thousand, in the Western Azeri â€“ from 218.6 thousand to 186 thousand, in the Eastern Azeri â€“ from 131.9 thousand 144 thousand.

Analysts of APA-Ekonomist consider that BP company must make official statement on the situation, decrease of the amount of extraction and number of wells, unfulfillment of forecast and factors that cause the countryâ€™s lagging in oil sector. But now, BP-Azerbaijan company is satisfied with a statement like â€˜We are fully loyal to Azerbaijan and in order to solve the issues connected with Azeri-Chirag-Gunashli extraction in a short time, we are working with SOCARâ€™, that does not explain anything.