SOCAR reduces oil and gas output
Not only has the State Oil Company of Azerbaijan Republic (SOCAR) reduced oil and gas output, but has failed to meet the 2016 projections- reads the Azerbaijani government’s annual report that will be submitted to Milli Majlis (Parliament) on March 17, 2017.
As it is pointed out in the report, in 2016, Azerbaijan produced only 41 million tons of oil, including 35 million tons that were exported. 33,5 million tons of extracted oil fall to the International Consortium’s share, while 7,5 mln. tons are accounted for SOCAR, which produced by 685,5 thousand tons less than last year.
There was also a drop in gas output rates. Last year, Azerbaijan produced 29,3 billion tons of gas, including 23,1 billion – produced by the International Consortium, whereas 6,2 billion – by SOCAR. At the same time, SOCAR’s gas output dropped by 12,7% compared with 2015 – Modern.az news agency reports.
The government attributes a drop in SOCAR’s output rates to the ‘man-made processes’, which, as it presumes, ‘should be investigated and additional measures should be taken for stable and safe activity’. Under the ‘man-made causes’ the government probably implies a number of serious accidents in the Caspian Sea. The most large-scale one occurred on Gunashli offshore platform, end of 2015.
Toghrul Veliyev, a journalist-economist, commented on SOCAR’s oil and gas output drop:
“Oil production in Azerbaijan has been naturally declining for several years in a row. This is due to both, the objective factors –country’s oil reserves are reducing and there are no new developments, as well as subjective factors – an average oil price has been dropping from year to year, and that doesn’t allow to invest necessary funds in updating the infrastructure and increasing efficiency (though our people try to do it). Gas is given more priority nowadays. However, the outdated infrastructure there doesn’t allow to produce necessary volumes either.”