SOCAR achieved growth in drilling and production in the third quarter of 2021. The company conducted more than 20,000 meters1 of drilling, which is 82% more than the same period last year.
Oil and gas production of SOCAR amounted to 2 million tons2 and 2 billion cubic metres3, respectively. Thus, the Company achieved 10%-growth in oil production and 9% - in gas production compared to the same period last year. The comprehensive action plan to maintain stable production levels in the oil and gas fields operated by the company has been consistently implemented.
In Q3 2021, oil and gas output of the country totalled to 8.7 million tons4 and more than 11.3 billion cubic metres5, respectively. This means a 6% increase in oil production and a 38.6% increase in gas production compared to the same period last year. The increase in oil output was mainly due to the gradual easing of production cuts under the OPEC+ deal.
Due to the global oil demand growth, driven by COVID-19 vaccination, OPEC+ continued easing the restrictions on production volumes for participating countries.
This has led to the stabilization and growth of crude oil production at SOCAR. In the second quarter of 2021, about 2 million tons1 of crude oil and 2 billion cubic meters2 of natural gas were produced on the fields operated directly by SOCAR, a 7% increase both in oil and gas production in comparison to the same period of last year. SOCAR reduced the volume of drilling operations during the quarter, as one of optimization measures, down to 14 thousand meters5, as compared to the same period of the last year.
Nationwide natural gas production increased in comparison to the same period last year and was about 10 billion cubic meters3. Oil production slightly declined to 8.4 million tons4.
SOCAR and Technip Energies entered today a cooperation agreement to study sustainability measures in the offshore upstream activities, including CO2 emission reduction, improvement of power efficiency and associated optimization in the total cost of ownership.
The cooperation agreement includes evaluation of a joint pilot project for offshore energy production on a floating wind turbine. The pilot project envisages energy supply for upstream operations in the Caspian Sea. This would be the first case of offshore wind energy production in Azerbaijan.
At present, upstream operations in the Caspian Sea mainly use electricity generated from natural gas. Among the main objectives of the pilot project is to determine the prospects for the supply of sustainable energy to the upstream sector of Azerbaijan, reduce natural gas consumption and increase gas exports.
The agreement was signed by Rovnag Abdullayev, SOCAR president and Marco Villa, Technip Italy S.p.A. Chairman of the Board. Speaking at the signing ceremony, the president of SOCAR said: “The energy efficiency is in focus of many energy companies and is an important part of SOCAR's strategic plans. In line with the development trends of technology, we are already entering this area. Our goal is to reduce operating costs, increase energy efficiency and ensure the sustainability of operations at SOCAR.
In 2020, a year remembered as the most turbulent period in the history of the world oil industry, SOCAR managed to reduce the expected net loss due to its positive performance in the development of oil and gas fields, transportation and sales of hydrocarbons.
The company's total turnover in the reporting year amounted to AZN 49.6 billion. The turnover decrease was due to the sharp price decline on the global crude oil and natural gas markets, as well as due to the collapse of petrochemical revenue margins.
Although 2020 was a difficult period mainly in the upstream segment, SOCAR earned AZN 1.4 billion in this segment thank to substantial optimization measures implemented , and AZN 300 million in trade, distribution and sales. This is even more than the total net profit of AZN 1.6 billion in 2019 for these two segments.
However, the company suffered from economic effects of the pandemic in other areas of its operations, including foreign exchange losses in Turkey, where a major part of SOCAR’s foreign investment is concentrated. The amount of these losses surpassed the positive results obtained in other segments, ultimately resulting in loss. Thus, SOCAR's net loss for the year amounted to AZN 1.7 billion. Since 2008, when the company began publishing its consolidated financial statements, this is the second year, which SOCAR finished with a net loss result.
The State Oil Company of the Azerbaijan Republic (SOCAR) is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate.read more
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