During quarter 1, 2014 SOCAR reduced oil export via Russia by 38.2%

From January to March 2014 SOCAR reduced oil export via the Novorossiysk port by 38.2% against the same period last year to 254,300 tons, SOCAR reported.

In March 2014 SOCAR exported 84,700 tons of oil via the Russian port, which was transported via the Baku-Novorossiysk pipeline. This is 74,900 tons or 46.9% less against last year.

SOCAR reported that in 2014 the company plans to transport 1.02 million tons of oil or 85,000 tons a month via the Baku-Novorossiysk pipeline.

On February 14, 2014 Russia officially announced termination of the agreement, on the basis of which 5 million tons of Azerbaijani oil a year was transited via Russia through the Baku-Novorossiysk pipeline since 1997. On February 18, 2014 SOCAR and Transneft company signed a  new commercial agreement to transport Azerbaijani oil via the northern route. The conditions of the agreement, which is effective till the end of 2014, are not disclosed. Later on Russian media reported that tariff for pumping of 1 ton of Azerbaijani oil via Russia remained almost unchanged - $15.67.

According to the statistical information, in 2013 1.75 million tons of Azerbaijani oil was pumped via the Baku-Novorossiysk pipeline.

Why did SOCAR reduce oil export through Russia when the oil pumping rate has remained almost unchanged?  The thing is that SOCAR’s oil is mainly exported via the Baku-Novorossiysk pipeline. This year the government plans to increase delivery of SOCAR’S crude oil  for oil refining, because demand in fuel has grown at the local market. On the other hand, SOCAR’s production is going down for objective reasons – all its fields are old. For this reason this year it is planned to reduce Azerbaijani oil export via the northern route by 750,000 tons against last year.—0—