Energy in Azerbaijan

[Mher]

Re: Energy in Azerbaijan

I wonder if these figures look in the future.

It has to be expected that there are variables and risks.
However I think it would be wrong to discount Azerbaijan's income from energy resources in the foreseeable future.

The above article does not consider Shah Deniz Stage 2 which is anticipated to come on line in 2017 and onward.
Probably it was referring to Shah Deniz Stage 1 output figures.

http://www.eia.gov/countries/cab.cfm?fips=AJ

I believe the reason the article didn't seem to suggest any growth in gas export is because it was discussing the projections up to 2018. Shah Deniz Stage 2 is not supposed to begin delivering to europe until 2019. But even when it starts doing so, its overall generated revenue is expecting to be a fraction what they gotten out of oil in recent years. In other though it will still bring in a notable amount of revenue once the oil has dried, it won't replace it. Realistically it could bring a quarter of the revenue or so that oil has produced recently.

[londontsi]

Re: Energy in Azerbaijan

I believe the reason the article didn't seem to suggest any growth in gas export is because it was discussing the projections up to 2018. Shah Deniz Stage 2 is not supposed to begin delivering to europe until 2019. But even when it starts doing so, its overall generated revenue is expecting to be a fraction what they gotten out of oil in recent years. In other though it will still bring in a notable amount of revenue once the oil has dried, it won't replace it. Realistically it could bring a quarter of the revenue or so that oil has produced recently.

I think the tracking of Azeri gas revenue should be based on delivery contracts that it has made or will make going forward.

I think its capacity to produce cannot be counted as revenue if buyers have not signed on the dotted line.

Additional risks include other countries, specifically Russia who is doing its utmost to undercut in order to compete to supply.
Russia in its turn has its own political hurdles.
First it was the Blue Stream which became the Turkish Stream etc.

[Tsov]

Re: Energy in Azerbaijan

Azerbaijan: How Will Baku Handle the Oil Price Slide?

December 22, 2014 - 11:40am <Azerbaijan><EurasiaNet's Weekly Digest> <Oil Prices>

“Azerbaijan is not afraid of $60 per barrel,” a headline on the pro-government Azerbaijani news site Trend proclaimed recently. But with Brent crude oil, the benchmark for the oil market, now hovering around $60 a barrel, Baku might well have something to fear. Baku’s 2015 state budget was calculated based on an oil price of $90 per barrel. About 53.5 percent of the government’s roughly 19.4-billion-manat ($24.7 billion) budget comes from the State Oil Fund, a government-run piggy bank that controls money generated by Azerbaijan’s oil projects, and about some 20 percent from the taxes paid by oil-sector companies, according to analysts. The government, for now, maintains that the budget can handle lower oil prices. Eventually, officials believe those prices will rise again. “If we take a look at the past 20 years, we can see that the oil prices have [constantly] changed,” commented Energy Minister Natiq Aliyev to Trend news agency on December 17. Yet, in an interview with Russia’s Rossiya-24 TV channel earlier in December, President Ilham Aliyev admitted that falling oil prices could have a negative impact on the government’s budgetary plans. One-third of the 2015 budget is slotted for investment projects; 20 percent of those investments are slated to fund a presidential pet project, the May 2015 European Olympic Games in the capital, Baku, economists estimate. No sign has emerged that spending for the Games could be slashed, although the president stated that infrastructure projects could be reduced, if need be. He did not elaborate. Construction projects accounted for 12 percent of Azerbaijan’s 2013 Gross Domestic Product of $73.56 billion; the industry generates the most economic activity outside of the energy sector, noted economist Samir Aliyev, editor-in-chief of the Economic Forum Magazine, an analytical monthly. If the government halts such projects now, it “will leave lots of people unemployed,” he predicted. President Aliyev has forecast no economic changes if the price of oil does not fall beneath $60 per barrel. Since that prediction, the price has dipped below that point, but has subsequently moved higher. Where the price will go in the coming weeks is hard to predict. What is certain is that the Azerbaijani government’s margin for expansive spending is slim. Economist Aliyev claims that the fall in the price of oil means that the Oil Fund already expects a 2.5-billion-manat deficit (some $3.1 billion) this year. In comments to EurasiaNet.org, Oil Fund spokesperson Jamala Aliyeva confirmed that “annual transfers and financing of strategic projects … may cause [a] deficit SOFAZ budget for 2015” as world oil prices decline. She did not cite a specific figure, however. Like Energy Minister Aliyev, she said she does not expect a long-term drop. If need be, Aliyeva continued, the Oil Fund “may use its assets to cover the gap between revenues and expenditures in the short run.” The Oil Fund is not the only dollar storehouse that could be affected by the slump in oil prices. Economist Aliyev claims the Central Bank’s reserves already have been impacted, too. The Central Bank’s website, though, shows only a slight dip in reserves (from $15 billion to $14.99 billion) from May through November. The Bank did not respond to a request for comment in time for publication. Government critics contend that authorities have not done a good job in preparing the country for lean times. “They should have fought corruption, diversified the state budget revenues, encouraged small and medium enterprises,” complained economist Natig Jafarli, executive secretary of the opposition REAL movement. “The government never did that.” Fellow economist Aliyev estimates that small and medium enterprises account for only 1.7 percent of Azerbaijan’s GDP. Vahid Ahmedov, a member of parliament’s Economics Committee, says that the government is paying attention to diversification. Azerbaijan’s non-oil economic sectors have grown by “10 to 15 percent over the last two to three years, and we keep working on it,” he claimed. Ahmedov believes that Azerbaijan’s currency reserves will create a buffer against lower oil prices. “I think the budget can manage it and people will not feel the impact of the decrease in oil prices for the next two years because of the reserves,” said Ahmedov, a non-party MP who tends to align with the government on most issues. For those who already struggle to make ends meet in Azerbaijan, lower oil prices are a source of unease. Salman Guliyev, 74, who sells candies in one of Baku’s backstreets, worries about what higher prices will mean for his ability to support his disabled wife and himself. He now receives a monthly pension of 150 manats ($191.52). “I wish we had more money to cover our basic expenses,” he said. As yet, the government has not commented about additional social welfare measures to help disadvantaged Azerbaijanis cope with harder times. But 28-year-old car-service employee Taleh Hasretov is not concerned. Admittedly not a news-junkie, he has only optimism for the year to come. “I know that the government has saved a lot of money, and even if oil prices go down, we will not face serious problems,” he said.

http://www.eurasianet.org/node/71451

[Mher]

Re: Energy in Azerbaijan

Azerbaijan: How Will Baku Handle the Oil Price Slide?

December 22, 2014 - 11:40am <Azerbaijan><EurasiaNet's Weekly Digest> <Oil Prices>

Economist Aliyev claims that the fall in the price of oil means that the Oil Fund already expects a 2.5-billion-manat deficit (some $3.1 billion) this year.

In comments to EurasiaNet.org, Oil Fund spokesperson Jamala Aliyeva confirmed that “annual transfers and financing of strategic projects … may cause [a] deficit SOFAZ budget for 2015” as world oil prices decline. She did not cite a specific figure, however.

Like Energy Minister Aliyev, she said she does not expect a long-term drop. If need be, Aliyeva continued, the Oil Fund “may use its assets to cover the gap between revenues and expenditures in the short run.”


http://www.eurasianet.org/node/71451

This is fantasy. It was projected that the fund would drop by 3 billion USD in 2013 when oil prices were over $100/barrel. This was because they were still spending at 2010-11 levels with less oil production. But somehow now they want us to believe that it "might" cause a drop this year with even less production and gas at $60/barrel.

[Tsov]

Re: Energy in Azerbaijan

This is fantasy. It was projected that the fund would drop by 3 billion USD in 2013 when oil prices were over $100/barrel. This was because they were still spending at 2010-11 levels with less oil production. But somehow now they want us to believe that it "might" cause a drop this year with even less production and gas at $60/barrel.

It's just aliyev trying to reassure his population and like the guy at the end of the article, most of the population is probably dumb enough to believe him.

[Tsov]

Re: Energy in Azerbaijan

UPDATE 1-Azerbaijan's Jan-Nov oil output down 2.8 pct, exports down 3.6 pct
Mon Dec 22, 2014 2:02pm GMT

(Adds details on oil exports)
BAKU, Dec 22 (Reuters) - Crude oil and condensate production
in Azerbaijan fell to 38.4 million tonnes in the first 11 months
of the year from 39.5 million tonnes in the same period last
year, a source at the State Statistics Committee said.
Falling output at the main Azeri, Chirag and Guneshli (ACG)
oilfields has been a cause of concern in Baku.
British oil major BP and its partner, Azeri state
energy firm SOCAR, tried to calm those worries last year, saying
production had stabilised. Total oil output rose last year for
the first time since 2011.
But the decline continued this year. Output from the ACG
fields fell to 24.2 million tonnes, or an average 655,700
barrels per day (bpd) in January-September from 663,200 bpd in
the same period last year and 656,000 bpd in the first half of
2014, BP-Azerbaijan said in November.
BP started maintenance work at the Central Azeri and West
Azeri platforms on Oct. 31, halting operations for a month, in a
move that could further reduce oil production in the country.
Production resumed on Nov. 27.
Below is table with Azerbaijan's oil and commercial gas
production:

Jan-No Jan-Nov 13 v 14 Oil and condensate (mln tonnes) 38.4 39.5 Commercial natural gas (bln cubic metres) 17.0 16.2

Information about total gas production in the first 11
months was not available.
Oil production falls at fields operated by BP led to 3.6
percent year-on-year decline in Azerbaijan's oil exports in the
first 11 months of 2014, a source at the State Customs Committee
said on Monday.
The source said Azerbaijan exported 30.2 million tonnes of
oil, down from 31.4 million tonnes in the same months of 2013.
Exports of oil via Russia through the Baku-Novorossiisk
pipeline amounted to 933,336 tonnes in the 11 months, down from
1.58 million tonnes.
Exports through the Baku-Supsa pipeline via Georgia rose to
3.855 million tonnes from 3.652 million tonnes, while exports
through Baku-Tbilisi-Ceyhan via Georgia and Turkey were 24.6
million tonnes, down from 25.2 million tonnes.
Oil exports shipped by rail via Georgia declined to 855.575
tonnes from 896.525.
Azerbaijan plans to produce 41.2 million tonnes of oil in
2014, down from 43.5 million tonnes in 2013, and 28.8 bcm of
natural gas, down from 29.5 bcm produced last year.

(Reporting by Nailia Bagirova; Writing by Margarita Antidze;
Editing by Greg Mahlich and David Evans)

http://af.reuters.com/article/energyOilNews/idAFL6N0U625120141222

[Tsov]

Re: Energy in Azerbaijan

http://www.presstv.ir/Detail/2015/01/02/391335/Oil-prices-fall-again-in-global-markets

Oil price is now USD 56.42 per barrel. What do you guys think this will mean for Azerbaijan? Even aliyev didn't dare to say everything would still be okay if the price plummeted below $60.

[Hakob]

Re: Energy in Azerbaijan

[QUOTE=Tsov;355403]http://www.presstv.ir/Detail/2015/01...global-markets


Oil price is now USD 56.42 per barrel. What do you guys think this will mean for Azerbaijan? Even aliyev didn't dare to say everything would still be okay if the price plummeted below $60.[/QUOTE




I say "Ազէրիստանը թքեց Հասոյի մախաթին..."

[londontsi]

Re: Energy in Azerbaijan

[QUOTE=Hakob;355405]

http://www.presstv.ir/Detail/2015/01...global-markets


Oil price is now USD 56.42 per barrel. What do you guys think this will mean for Azerbaijan? Even aliyev didn't dare to say everything would still be okay if the price plummeted below $60.[/QUOTE




I say "Ազէրիստանը թքեց Հասոյի մախաթին..."

They seem to have fallen lower.
You can follow real time.

http://www.nasdaq.com/markets/crude-oil.aspx

It looks horrific if you look at it with a year timeframe.

We must never forget waiting somebody's demise to declare ourselves successful is not a strategy.
We have to perform better and stronger to be winners.

As for the price of oil, prices go up and down.
They are down at the moment.
How long for? God knows, it appears its based on strategic move by the Saudis ( backed by other powers ).

Azerbaijan appears to be a collateral victim of geopolitics as some others countries are.
This is coupled by diminishing capacity for output.

.

[Tsov]

Re: Energy in Azerbaijan

[QUOTE=londontsi;355408]

They seem to have fallen lower.
You can follow real time.

http://www.nasdaq.com/markets/crude-oil.aspx

That is WTI the American benchmark. The European bench mark is Brent.

http://www.nasdaq.com/markets/crude-oil-brent.aspx

It looks horrific if you look at it with a year timeframe.

We must never forget waiting somebody's demise to declare ourselves successful is not a strategy.
We have to perform better and stronger to be winners.

As for the price of oil, prices go up and down.
They are down at the moment.
How long for? God knows, it appears its based on strategic move by the Saudis ( backed by other powers ).

Azerbaijan appears to be a collateral victim of geopolitics as some others countries are.
This is coupled by diminishing capacity for output.

I agree, I just think this is notable because aliyev's lies didn't even go so far as say they would still be okay if the price fell below $60.

And the important thing here is that other countries with large reserves will be able to recover later but because Azerbaijan's output is diminishing the won't.