Start of production at Absheron field to improve SOCAR’s business profile

The start of Absheron field is the largest Azerbaijani oil and gas development since Shah Deniz II, and this will improve SOCAR’s business profile, Report informs referring to Fitch Ratings.

“SOCAR and TotalEnergies SE (AA-/Stable) started production in Absheron gas and condensate field in July 2023. SOCAR expects production from Absheron will amount to 1.8 million barrels of oil and 707 million cubic metres of natural gas in 2023,” reads the report.

Most oil and gas projects in Azerbaijan operate under production-sharing agreements, in which SOCAR has a minority stake and where it also represents the state and is involved in marketing the latter’s share of crude oil and gas (profit oil). In addition, SOCAR has stakes in some other major energy projects promoted by the state, such as the Southern Gas Corridor (SGC).

“SOCAR’s oil and gas output remained broadly stable in 2022 at 284 thousand barrels of oil equivalent per day. This comes on top of Azerbaijan’s 6% decrease in oil output and 7% higher gas production. Azerbaijan’s oil production has historically decreased and we do not expect this to materially change. We assume SOCAR’s production will grow by 0.5% annually in 2023-2025 on the back of higher natural gas output,” Fitch noted.

The Absheron gas condensate field, located approximately 100 km southeast of Baku in the Azerbaijani sector of the Caspian Sea, is operated by JOCAP (Joint Operating Company of Absheron Petroleum B.V.).

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