The article was published in World Energy Weekly (May 8 issue), a publication of Petrostrategies, a French think-tank specializing in energy issues.
A recent paper by Rystad Energy presents an outline of upcoming upstream investments in Azerbaijan until the end of the current decade. It shows that the country’s hydrocarbon industry, which has hitherto been dominated by oil, will become increasingly “focused on gas”. The Norwegian energy research and business intelligence company notes that investments in Azeri hydrocarbons (upstream alone) have decreased since 2018 and will continue to trend downwards until 2030. They thus fell from $7 billion/annum in 2016 and 2017 to $5 billion in 2019; and for the past two years, to around $3.7 billion/annum. Until 2030, these investments will vary from $2 to $3.5 billion/annum.
Rystad identifies nine upstream investment projects which are due to be approved between 2019 and 2027, with production start-ups planned from 2023 to 2031. The cumulative reserves of these projects total 4.13 Gboe, 62% of which (3 Gboe) is gas. The planned investments amount to approximately $21.83 billion, or $5.3/boe (calculations by PETROSTRATEGIES). All of the fields listed by Rystad are operated by foreign companies, with the exception of Umid, a gas condensate field. The Azeri national company SOCAR is working on the latter, but will probably have to ask a foreign company for help, as the field presents “technical and geological complexities”.
According to Rystad, Azerbaijan produced 46.7 bcm of gas in 2022, 12.7 bcm of which was injected into oil fields. This is particularly the case for the Azeri–Chirag–Deepwater Gunashli (ACG) oil fields, where increasing volumes of gas have to be injected to maintain the production rate, as the pressure is declining. The Shah Deniz field (phases 1 and 2) produced 25.2 bcm of gas in 2022. Rystad estimates its remaining resources at 480 bcm (out of initial resources estimated at 1,200 bcm). Shah Deniz will reach a plateau of 26 bcm/annum this year, notes Rystad. A compression project is being studied (pre-FEED) to maintain its production.
Azerbaijan exported 22 bcm of gas last year. Some 11.4 bcm was sold in Europe, 8.4 bcm in Turkey and 2.5 bcm in Georgia. Exports are expected to reach 24 bcm in 2023.
