Azeri Oil Export Significantly Down in 2011

Azeri Oil Export Significantly Down in 2011

Azerbaijan’s overall export of oil products dropped by 21.6% in 2011. SOCAR exported 155.663 thousand tons of crude oil through Novorossiysk port (Black sea, Russia), 161.697 thousand tons – through Supsa port (Black sea, Georgia), 1,645.230 thousand tons – Jeyhan port (Mediterranean sea, Turkey). Compared to December, 2010, oil export through Novorossiysk port dropped 6%, through Jeyhan port decreased by 49% last month.

SOCAR says 1,988.429 thousand tons of crude oil was exported through Novorossiysk port, 2,652.111 thousand tons through Supsa port, 22,969.480 thousand tons through Jeyhan port in 2011 in total.

The volume of oil exported in Novorossiysk direction decreased by 11.2% in comparison with last year, the volume of oil exported from Jeyhan port decreased by 38.4% .

Reminded that CESD stated in its November 16, 2011 report that the latest forecasting confirm that oil boom in Azerbaijan is doomed to end in a few years. Azerbaijan’s high dependence on oil exports poses a potential threat to the economy given the potential volatility in the international oil market. Oil reserves, however, started decreasing in 2011 and last year was pick in oil production. In long term, decreasing of oil output will cause tax revenues decline and budget deficits increase, driving up interest rates.

CESD assessment model also include tendency of decreasing of oil production in Azerbaijan. State Oil Company of Azerbaijan (SOCAR) produced 50 million ton oil in 2010. SOCAR targets 46 million ton for 2011 which 4 million ton less than last year’s output. Meanwhile, the latest predictions confirm that oil production will be decreased to about 33 million ton in 2015. Even with current prices of crude oil in the world market, SOFAZ’s assets will be totally spent within the budget lines if current unbelievable transfers’ level kept. Keeping such fantastic transfers can result in negative consequences because of theatrical cutting of budget expenditure lines due to potential lack of financial resources.

BTC pipeline extends to 1768km, including 443 km in Azerbaijan, 248 km in Georgia and 1076 km in Turkey. The shareholders of the BTC Co company are  BP (30.1%), SOCAR (25%), Chevron (8.9%), Statoil (8.71%), TPAO (6.53%), Itochu (3.4%), Amerada Hess  (2.36%), ENI (5%), ConocoPhilliрs (2.5%), Inрex (2.5%), Total (5%).

© CESD, 2012


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