Why did Azerbaijan decide to give up half of volume of associated gas in winter?

In quarter 1, 2016 BP-Azerbaijan company (the operator developing Azeri-Chirag-Guneshli (ACG) oil bloc) handed over to State Oil Company of Azerbaijan (SOCAR) 692 mcm of associated gas, down 42.3% against the same period last year (1.2 bcm).

According to the company’s press release, during quarter 1, 2016 about 7.6 mcm of associated gas a day was delivered to SOCAR. The remaining volume of associated gas extracted on the ACG bloc during this period was injected back into the beds to maintain pressure in the oil wells.

BP-Azerbaijan company does not report the volume of extracted associated gas during this period. Azerbaijani Energy Minister said earlier that in 2016 it is forecast to extract 12.9 bcm of associated gas on the ACG bloc of fields. In 2015 12.3 bcm of associated gas was extracted on the ACG bloc and 3.2 bcm of this volume has been handed over to the Azeri side.

Associated gas from the ACG bloc is handed over to SOCAR free of charge at the distribution network of the Sangachal terminal.

SOCAR explained Turan that the volume of associated gas handed over to SOCAR has been decreased to stabilize oil production on the ACG. “Both the state and SOCAR receive more profit, if more oil is extracted on the ACG. Thus, at this stage it was advisable to inject gas into the oil wells instead of using this gas at the local market,” said a source from SOCAR.

 Asked “if we could without this volume of gas,”  a source from SOCAR said that luckily this year winter was much milder and the companies managed to save fuel.—0—