The FINANCIAL — SOCAR achieved steady oil and natural gas production in 2017 by increasing the volume of drilling operations.
During the year SOCAR conducted 138 thousand meters of drilling work raising it by 30.7% against the relevant figure of 2016. Of this amount, 93% fell to the share of development drilling, 7% – exploration drilling. In total, 81 new wells were put into operation after finishing their construction. SOCAR produced 7.4 million tons of crude oil and 6.1 billion cubic meters of natural gas, there were slight differences correspondingly by 1.4% and 3.3% as compared with the relevant figures of 2016. In total, 38.7 million tons of crude oil and 28.6 billion cubic meters of natural gas were produced in Azerbaijan in 2017, according to SOCAR.
SOCAR’s crude oil export for 2017 amounted 20.7 million tons. SOCAR exported 1.5 million tons of oil refining and petrochemical products, which contributed to the growth of total revenues last year. The products such as diesel and aviation fuels, high-pressure polyethylene, gas carbon, propylene, LNG and pyrolysis resin have an important share in the export of oil refining and petrochemical products.
It should be noted that the capacity of SOCAR’s prospective oil and gas fields will facilitate stability of oil production and increase the natural gas production in upcoming years. Due to the measures for the prevention of output lowering in the old oil fields, SOCAR’s oil production coincides with the framework agreed by the other oil producers for the price regulation in the world oil market. To secure steady oil production, along with the drilling of new wells, old ones are also restored and included in the exploitation fund, fundamental repair works are carried out in the out-of-exploitation wells, and projects based on geological-technical measures are implemented for this goal. Advanced technologies are used for extracting residual oil content from the deactivated wells.
SOCAR specialists could achieve increase of production in some oil fields such as “Absheronneft” and “Bibiheybat”, which raised their output 8.7% and 1.9% correspondingly against the indexes of 2016. “Neft Dashlari”, making significant contribution to the stable oil production, produced 1 million tons of crude oil in 2017 and achieved record figures in the last decades. Dashgin Iskanderov, CEO of Azneft said: ““Absheronneft” has increased its total output for 2.5 times in recent years with small expenditures. Today cost of production at Azneft is among the lowest in the world, it means that our operations are highly efficient, which is the ultimate result of the professional skills and strong will of Azerbaijani oilmen.”
SOCAR’s oil and gas trading operations has been one of the reasons for positive dynamics in the oil export. Apart from that, there was a high demand for Azerbaijani oil last year. Elshad Nassirov, SOCAR’s Vice President for Investments and Marketing said: “SOCAR introduced Azerbaijani oil onto the market under the brand of ‘Azeri Light’, as one of the most qualitative oils in the world. Bringing ‘Azeri Light’ to the market as an independent brand raised the value of our national wealth.”
In the light of the OPEC+ deal for the stabilization of crude prices on the world market being extended until the end of 2018, Azerbaijan continued adhering strictly to its’ requirements. The rise in oil price, because of the curbing output, has had a positive impact on SOCAR’s revenues, compensating for the lower production volumes.