Azerbaijan Stems Oil Output Drop as BP Stabilizes ACG Production

Azerbaijan slowed an oil production decline in the first nine months of the year after a group led by BP Plc (BP/) stabilized output at the country’s largest deposit.

The Caspian Sea nation pumped 32.5 million metric tons of oil in January through September, down from 32.8 million tons a year earlier, according to data published today on the State Statistics Committee’s website. That compares with a 7.1 percent drop in the first nine months of 2012.

Buoyed by western investments, Azerbaijan more than tripled its economy in the past decade by boosting oil and natural gas output. BP brought in advisers from around the world to stem a drop at the Azeri-Chirag-Guneshli field, which produced 77 percent of the country’s oil last year, after President Ilham Aliyev accused it of “grave mistakes.” The former Soviet republic offers the only route for Caspian oil and gas exports to Europe bypassing Russia.

“The output decline slowed thanks to the hard work done at the ACG field by BP and its partners, starting in the fourth quarter of last year,” Ilham Shaban, head of the Baku-based Center for Oil Studies energy research group, said by phone from the capital. Azeri oil output will remain little changed this year and next as BP’s Chirag Oil Project, known as COP, starts producing in the first quarter of 2014.

The ACG field delivered 16.4 million tons of oil in the first half of 2013, down 2.4 percent from a year earlier, BP’s Baku office said Aug. 6. That compared with a 12 percent drop a year earlier. Azerbaijan is third-largest crude producing nation in the former Soviet Union after Russia and Kazakhstan.

Partners in the project include State Oil Co. of Azerbaijan, or Socar, Exxon Mobil Corp., Chevron Corp., Statoil ASA, Itochu Corp., Turkiye Petrolleri AO and ONGC Videsh Ltd.

Azerbaijan also pumped 13.1 billion cubic meters of marketable natural gas in the January-September period, up from 12.8 billion cubic meters a year earlier, the State Statistics Committee said.

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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