BP-Led Azeri Caspian Project Cuts Crude Output for a Second Year

The BP Plc-led Azeri-Chirag-Guneshli field in Azerbaijan’s section of the Caspian Sea cut oil output for a second year, extending a drop that prompted criticism from the nation and a pledge by the company to stabilize production.

Output from the largest Azeri deposit fell by 7 percent to 32.9 million metric tons, according to data e-mailed today by BP’s office in the capital of Baku. It didn’t give any reason.

President Ilham Aliyev in October accused BP of “grave mistakes” and demanded the replacement of those responsible for the decline. London-based BP subsequently switched executives in the region and said it planned “long-term stabilization of ACG production,” which made up 77 percent of Azeri output in 2012.

State Oil Co. of Azerbaijan, a partner in the project, said in October output would be 33 million tons this year and rise to 35 million tons in 2014. It would hold at about 33 million to 34 million tons through 2020, President Rovnaq Abdullayev said.

ACG produced about 3.4 billion cubic meters of natural gas in 2012, from about 3.3 billion, said BP, whose partners include Chevron Corp (CVX), Exxon Mobil Corp (XOM), Inpex Corp (1605) and Statoil ASA. (STL)

Phase one of the BP-led Shah Deniz project, also in the Azeri section of the Caspian Sea, pumped about 7.73 billion cubic meters of natural gas, up 16 percent, and 2 million tons of condensate, or light oil, up from 1.8 million, data showed.

Shah Deniz will deliver an additional 16 billion cubic meters of gas when the second phase of the project, estimated to cost about $25 billion, begins production in 2018, BP said.

Azerbaijan plans to exports 10 billion cubic meters of the fuel to the European Union through Georgia and Turkey.

To contact the reporter on this story: Zulfugar Agayev in Baku at zagayev@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net

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