Energy-rich Azerbaijan fully meets its obligations under the OPEC / non OPEC agreement to cut the oil production, said Rovnag Abdullayev, president of Azerbaijan’s state oil company SOCAR.

“Our oil production has decreased slightly, but revenues from oil sales have increased, thanks to a rise in the oil price,” he said in his interview with Reuters.

Abdullayev went on to say that Azerbaijan's main goal is to avoid selling oil cheaply, adding that even though oil output in Azerbaijan has been slightly reduced, due to the OPEC+ deal, revenues have grown, which shows that the right track is chosen.

OPEC and other oil producers, including Azerbaijan, made a deal in December 2016 to remove 1.8 million barrels a day from the market. In May 25, OPEC members agreed to extend their previous agreement by nine more months to March 2018 to lower oil output.

The country produced 793,900 barrels of oil per day in January 2017, 776,400 barrels per day – in February, 733,300 barrels per day – in March, 781,100 barrels per day – in April, 785,300 barrels per day – in May and 793,700 barrels per day in June.

Some 22.5 million tons of oil and gas condensate were produced in Azerbaijan in January-July 2017, which is less by 8.9 percent, as compared to the same period of 2016. Azeri-Chirag-Gunashli (ACG) block of oil and gas fields accounts for the major volume of oil production in Azerbaijan.

Further Abdullayev mentioned that the country is looking to increase production of natural gas in coming years.

 “We aim to get 1.5 billion cubic meters (bcm) of gas from Absheron gas field’s first stage in 2019 and an additional 5 bcm in 2022-2023 from the second stage,” he said.

He went on to say that domestic gas needs are fully covered by domestic production, but it is reasonable to buy it during summer months to benefit from underground gas storage capacities, as gas prices are low at this time of the year.

"Thus, in order to maximize the profits of our country, we are buying Turkmen gas in the summer, storing it and selling in winter at higher prices."

Abdullayev added that in the next three to five years, SOCAR plans to build two offshore platforms at the Umid gas field and to drill at least eight high-marginal wells and to start drilling at the Babek gas field in the second half of 2018.

The company president emphasized that, SOCAR plans to start oil and gas production at the Karabakh offshore field in the second part of 2021.

“Development of these projects would allow us to increase gas sales domestically and abroad,” he concluded.

SOCAR has produced 2.95 bcm of gas from offshore and onshore fields of the country using its own funds in the first quarter of 2017, as compared to 3.16 bcm produced in the same period of 2016.

Along with its own production, SOCAR also receives gas from Shah Deniz and Azeri-Chirag-Gunashli fields (associated gas), developing these fields jointly with foreign partners. Total volume of gas produced from the contracted and independently developed fields stood at 14.13 bcm in the period, as compared to 14.94 bcm in January-June 2016.

The Azerbaijani Energy Ministry forecasts gas production in the country to rise to 41.4 bcm in 2021.

AzerNews, 22.08.17