Azerbaijan To Focus on Developing Gas
Azerbaijan has said its peak oil production has passed and so it will now put its effort on exploring and developing gas and condensate.
"We are talking about phase 2 of Shah Deniz development, which will be followed by phase 3 of this development. There are plans for further exploration and development of natural gas reserves in Azeri-Chirag-Guneshli (ACG) below the oil productive strata. We have prospects for new gas as well as condensate discoveries in Azerbaijani part of Caspian too,” the country's energy minister Natig Aliyev told the 'Caspian Basin and Central Asia: Trade, Logistics, Oil Processing and Oil and Chemistry' conference in Baku on April 25.
Peak oil production period in Azerbaijan passed after reaching 51mn tons (372mn bbls) in 2010 and now is in natural decline, the minister acknowledged.
“The production decline is a natural process in the oil and gas industry with ageing fields. We aim to keep oil production levels stable by fostering use of technology and new methods as well as putting efforts on increasing gas production in Azerbaijan,” he said .
Socar’s first vice-president Khoshbakht Yusifzade told the conference that about 70bn m3 has been extracted from the BP-operated giant Shah Deniz gas and condensate field in the Caspian Sea to date, between its production start up in December 2006 and this month.
Recoverable reserve estimates for Shah Deniz differ: Socar estimates them at 1 trillion m3 and increasing; BP more cautiously puts them at 750bn m3.
Shah Deniz had produced 18mn tons of condensate over this period. Yusifzade said that the field produces 30mn m3 of gas and 7,000 t condensate per day.
Shah Deniz's stage 1 cost $6bn to develop; currently only stage 1 is being produced, with maximum production of 10.4bn m3/yr (28.5mn m3/d).
Total oil production from BP-operated Azeri-Chirag-Guneshli (ACG) oilfields in Caspian from the start in November 1997 until April 1, 2016 had been 393mn metric tons of crude (2.89bn bbls), Yusifzade said. Of that 218mn tons was profit oil for Azerbaijan. Also during this period, ACG produced 118bn m3 of associated gas. He added that daily ACG production is 90,000t oil and 36mn m3 of associated gas.
Kama Mustafayeva