Pipeline Damage Halts Output from Chirag Field

The oil pipeline from Baku, Azerbaijan, to the Georgian Black Sea port of Supsa was damaged earlier this week, forcing the Azerbaijan International Operating Co. to stop production at its Chirag field, an AIOC spokesman said Wednesday.

AIOC, which produces 114,500 barrels of Azeri Light crude at the Caspian offshore field of Chirag, is currently considering exporting it via the Russian port of Novorossisk. Since the completion of the Baku-Supsa link AIOC has never shipped crude to Novorossiisk, preserving the quality of its Azeri light blend, which is better than the Russian crude oil blend Urals loaded at Novorossiisk. "We hope the damage will be repaired shortly so we can restart Baku-Supsa as soon as possible," the spokesman said. The pipeline was damaged in Western Georgia causing a leakage of 15 bbl of oil over an area of one square kilometer, an Azerbaijani official said.

Georgian state pipeline company is currently repairing the damage and investigating the cause, he said, adding that the damage was most likely caused by thieves attempting to steal oil.

The 827-kilometer-long Baku-Supsa pipeline currently transports about 140,000 b/d of oil and can increase capacity to 240,000 b/d. Chirag is the first field to produce crude from a production sharing agreement between Azerbaijan and AIOC, which also plans to develop neighboring Azeri and Guneshli fields.

AIOC is jointly owned by BP with 34.14%, Unocal with 10.65%, Lukoil with 10% and ExxonMobil with 8%, among others.