BP Says Expects Flat Oil Output In Azerbaijan In 2017

Reuters

BAKU, Sept 7 (Reuters) - British oil major BP expects flat oil output in Azerbaijan in 2017 and will adhere to an oil output freeze, if the Azeri government takes such a decision, the company's regional manager said on Wednesday.

"We can't expect a rise in oil production next year, but expect that it will remain stable, at the previous level," Gordon Birrell, head of BP in Azerbaijan, told reporters.

"If the government of Azerbaijan takes a decision on oil freeze, we will join this decision."

The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia are expected to discuss an output freeze at informal talks in Algeria on Sept. 26-28 to deal with a supply glut and weak prices.

BP operates three main oilfields in Azerbaijan - Azeri-Chirag-Guneshli (ACG). Oil output from these oilfields in the first half of 2016 rose to 16 million tonnes (655,000 barrels per day) from 641,000 bpd in the same period last year, BP-Azerbaijan said on Aug. 23.

Birrell said BP was in talks with the Azeri government on extending the production-sharing agreement at ACG beyond 2024, when the contract expires.

"Talks on the Azeri-Chirag-Guneshli are continuing and we are active participants in these negotiations," he said.

He also said BP did not expect oil prices to recover in 2016-17.

Azerbaijan gets three-quarters of its revenue from oil exports and the plunge in prices over the past two years has hit it hard.

"It's necessary to achieve an attraction of investments in the conditions of low oil prices in 2016-2017," Birrell said.

(Reporting by Nailia Bagirova; writing by Margarita Antidze; editing by Susan Thomas)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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Geoff | Sep. 8, 2016
It hits certain peoples' pockets hard.


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