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UPDATE 1-Azeri oil output seen not rising before 2014
November 8, 2012 / 12:25 PM / in 5 years

UPDATE 1-Azeri oil output seen not rising before 2014

* Oil production seen falling 6 pct in 2012
    * BP in trouble over falling Azeri oil production
    * Gas output seen steadily rising

    By Lada Evgrashina
    BAKU, Nov 8 (Reuters) - Azerbaijan expects its oil production to fall 6
percent to 42.9 million tonnes this year and start rising only in 2014, despite
efforts by BP efforts to stem falling output, a government forecast
obtained by Reuters showed on Thursday.
    Oil output is seen at 40.82 million tonnes (826,500 barrels per day) next
year and 43.22 million tonnes in 2014.
    Falling production at the Azeri, Chirag and Guneshli (ACG) oilfields, the
biggest in Azerbaijan and one of BP's largest global projects, has raised
concerns in the ex-Soviet republic and prompted its president to accuse the
British major of making "false promises". 
    The new data is likely to put more pressure on BP, which had to reshuffle
its staff in Baku to support a focus on crude production.
    A source at state oil company SOCAR told Reuters that the falling oil
production is explained by "increasing geological and technological difficulties
of developing onshore depleted oilfields".
    Azerbaijan had expected stable crude production at the BP-led consortium
until the end of the contract in 2024. 
    Plans had called for ACG to produce over 1 million barrels per day (bpd)
after a third phase was completed in 2008. But after hitting 823,000 bpd in
2010, output has fallen to an average of 684,000 bpd in the first half of this
    Oil executives and diplomats told Reuters last month that BP would have to
invest billions of dollars more than previously planned in order to slow the
output decline.
    Unlike oil, natural gas output in Azerbaijan is expected to rise 5.5 percent
to 27.12 billion cubic meters (bcm) this year. Production is seen further rising
to 28.82 bcm in 2013. Azerbaijan is already a major gas exporter in the region. 
    Following is the table of the Azeri government forecasts of oil and gas
                     2011     2012    2013    2014    2015    2016
 oil output, mln T   45.6     42.9   40.82   43.22   43.08   42.92
 gas output, bcm     25.7    27.12   28.82   29.76   29.88   30.27

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