SOCAR Oil Export Declined by 7 % in the first quarter of 2012

SOCAR Oil Export Declined by 7 % in the first quarter of 2012

The State Oil Company of Azerbaijan exported 5,2 million tonnes of oil via all routes including Baku-Novorossiysk, BTC and Baku-Supsa pipelines in the first quarter of 2012 which is 7,2  % lower than compare with the same period last year. SOCAR exported 5,6 million tonnes in the first three months of 2011 . Sources at the SOCAR mentioned that Baku-Novorossiysk exported 496,8 thousand tonnes of oil in the first 3 months. BTC and Baku-Supsa pipelines exported the profit Azeri Light oil, produced within the framework of the Azeri-Chirag-Guneshli fields development.

SOCAR source added that the oil export by the Baku-Supsa pipeline made 888 thousand tonnes. The BTC pipeline exported 5,1 million tonnes of profit oil in the same period. Profit oil is distributed among shareholders depending on their share in the project of Azeri-Chirag-Guneshli fields development.

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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