Azerbaijan expects stable output at BP-led consortium


Azerbaijan expects stable crude production at BP-led consortium until the end of the contract in 2024, conceding the project will not be able to reach planned output of 1 million barrels per day, the chief of state oil company SOCAR said on Monday.

Falling output at the Azeri, Chirag and Guneshli (ACG) oilfields, one of BP's largest global projects, raised concerns in the ex-Soviet republic and prompted its president to accuse the British major of making "false promises".

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"Actual production at ACG in 2013 will be unchanged comparing to this year. We want to see a stable plateau in 2014-2024. Experts were given a task to increase production in 2014," SOCAR chief Rovnag Abdullayev told Reuters.

He declined to say what the level of production increase could be for this year.

ACG was expected to produce over 1 million barrels per day (bpd) after a third phase was completed in 2008. But after hitting 823,000 bpd in 2010, output has fallen, averaging 684,000 bpd in the first half of this year.

A source at the company told Reuters that a BP delegation is expected in Baku this week to hold talks on falling production at ACG, which has estimated oil reserves of 1.2 billion tonnes.

BP was forced to beef up its staff in Baku and make some managerial changes.

Exxon Mobil, Chevron and Statoil also have stakes in the consortium.

Oil executives and diplomats told Reuters last month that BP would have to invest billions of dollars more than previously planned in order to slow the output decline. Doing so might not be commercially viable if the PSA is not extended beyond 2024.

(Reporting by Lada Evgrashina; writing by Vladimir Soldatkin; editing by Jason Neely)