In Azerbaijan, BP receives a warning

OCT. 12, 2012 — Azerbaijan’s president Ilham Aliyev has blamed BP for declining oil and gas production

STORY — At a government meeting broadcast on TV, Azerbaijani president Ilham Aliyev blamed BP for declining oil production from fields in the Azerbaijani sector of the Caspian Sea (Oct. 10).

Such a public and unequivocal rebuke is virtually unprecedented in Azerbaijan’s recent energy history and it will sting.

BP is the dominant foreign oil company operating in Azerbaijan. Other fields are due to come on stream in the next decade but at the moment the key operations are the Shah Deniz gas field and the Azeri-Chirag-Guneshli (ACG) fields.

Mr Aliyev said that “grave mistakes” by BP had triggered a 12% reduction in ACG’s oil production this year and cost Azerbaijan $8b in lost oil revenues over the past three years.

BP, which owns about 36% of the field, has not given a reason for the decrease in oil production but, in response, said it was committed to both ACG and working in Azerbaijan.

The start of production at ACG had been greeted with great excitement but anticipated production of 1m barrels of oil a day quickly evaporated.

Now, the challenge is to maintain output at a far more modest 700,000 barrels of oil a day and to appease the all-powerful Mr Aliyev.
— ENDS —
Copyright © 2012 The Conway Bulletin

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