Hydrocarbon Reserves of Azerbaijan

The majority of production in Azerbaijan is based offshore in the Caspian Sea, the largest land-locked body of water in the world.

Proven oil reserves in the Caspian basin, which Azerbaijan shares with Russia, Kazakhstan, Turkmenistan and Iran, are said to be comparable in size to the North Sea reserves several decades ago, although questions exist around exact figures. The country's main proven oil reserves are concentrated in the Azeri-Chirag-Guneshli (ACG) deposit while its natural gas reserves are mainly found in the Shah Deniz deposit.

=Oil=

Reserves
According the the BP Statistical Review of World Energy 2012, at the end of 2010 Azerbaijan had 7 billion barrels (bbl) of proven reserves, accounting for 0.5 percent of global reserves. Between 2001-2002 this figure jumped sharply from 1.2 billion to 7 billion barrels.

However there has been some debate over the figures stated for hydrocarbon reserves in Azerbaijan and some accusations of exaggeration. According to Azerbaijan International magazine in 1998, reserves in the Caspian Sea are thought to be second only to the Persian Gulf. For example, a US State Department report in 1997 estimated that Azerbaijan alone had around 3.6 bbl of 'proven reserves' and 27 bbl of 'possible reserves', however state oil company SOCAR's own estimates put the figure for 'possible reserves' higher, at up to 40 bbl. There were suggestions that regional players such as Russia and Armenia had downplayed the figures in an effort to promote their own strategic interests. 'On the other hand, energy analyst Patrick Eytchison asserts that the Caspian 'oil riches' pointed to by the US Energy Department and the United States Geological Survey (USGS) were a myth fabricated with geopolitical motives, as Western governments looked for alternatives to OPEC-controlled oil in the wake of the breakup of the Soviet Union.

Production
According the the BP Statistical Review of World Energy 2012, in 2010 Azerbaijan produced 1.037 million barrels per day (bpd) of oil, representing a 0.5 percent increase on 2009 figures and accounting for 1.3 percent of total global production. Of the figures included, the lowest rate of production was encountered in 1997 (182,000 bpd), after which production figures saw a year on year rise.

The US State Department estimates that imminent large scale investments in the sector, most notably a US $20 billion investment in the second stage of the Shah Deniz gas project are likely to cause production to climb over the next decade. However the Azerbaijani government forecast that oil revenues would peak in 2012 and oil reserves would peak in 2013, adding that this rate of decline could turn the nation into an oil importer as early as 2030.

In March 2012 state energy company SOCAR said that production of oil and condensate fell another 4.9 percent year on year in the January-February period due to repair work at drilling platforms and refineries, while gas output rose 11 percent to 4.55 billion cubic metres (bcm).

=Gas=

According to the BP Statistical Review 2012, at the end of 2010 Azerbaijan's proven gas reserves stood at 1.3 trillion cubic metres (tcm), accounting for 0.7 percent of global reserves.

In 2010 Azerbaijan produced 15.1 billion cubic metres (bcm) of gas, a 2.2 percent increase on the previous year and accounting for 0.5 percent of global production.

Azerbaijan's Shah Deniz Gas Field is one of the world's largest gas-condensate fields, with over 30 tcf of gas in place.

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