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Energy news
Bulletine Energy 

2017 June 21 ( Wednesday )  10:36:30
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Share of Oil Sector in Tax Revenues Only 25%

Baku/21.06.17/ Turan: The oil sector in January-May 2017 provided more than 25% of tax revenues to the state budget of Azerbaijan through the Ministry of Taxes, Deputy Minister of Taxes Ilkin Veliyev told journalists.

According to him, over the five months of this year, tax revenues to the state budget of Azerbaijan amounted to almost 2.83 billion manat, which is 4.7% more than the forecast.

Based on this, it can be assumed that since the beginning of the year tax collectors have collected about 708 million manat from the oil sector. According to SOCAR, in January-May it paid almost 670 million manat to the state budget. It turns out that another 38 million manat was paid by foreign oil companies. Why are their payments so small? This can be explained by the fact that the state credits part of the tax payments of foreign companies to purchase gas for the needs of natural gas in the framework of the Shah Deniz-1 project.

Let's remind that in 2016 foreign companies paid more than 357 million manat of taxes to the state budget.

In January-May, the total revenues of Azerbaijan's state budget amounted to 6 billion 335.7 million manat (+ 16.2%), and the expenditures were 6 billion 724.1 million manat (+ 26.5%).

The state budget incomes for 2017 were approved at the level of 16 billion 255 million manat, and the expenses - at 16 billion 900 million manat. -12D-

Exports from Shah Deniz Increase in 2017

Baku/21.06.17/ Turan: The export of Azerbaijani gas in Phase 1 of the Shah Deniz field development in January-May 2017 amounted to 3,197.1 mcm, which is 5.6% higher than the same period last year.

According to the State Statistics Committee of Azerbaijan, 32.7% of all gas transported through the main gas pipelines in January-May of 2017 accounted for the share of gas exports from the Shah Deniz field.

According to statistics, as a whole, the main gas pipelines of Azerbaijan in January-May 2017 transported 9,778.5 mcm of gas, which is 11.5% higher than in January-May 2016.

In 2016, the export of Azerbaijani gas in the framework of the Shah Deniz-1 project amounted to 7,145.1 mcm. -12D

EU to Further Seek to Extend SGC to Central Asia

Baku/21.06.17/Turan: EU will continue to seek to extend the Southern Gas Corridor to Central Asia, according conclusions of the European Council on the EU Strategy for Central Asia, adopted on June 19.

"In the energy, infrastructure and transport sectors, the Council emphasizes that cooperation between the EU and Central Asia should prioritize the integration of the Central Asian countries with each other and into international markets and transport corridors. The EU will continue to seek to extend the Southern Gas Corridor to Central Asia, and to further promote the EU's multilateral and bilateral energy cooperation," the document, published on the website of the Council, reads.

The European Council stressed that the EU will also continue to promote renewable energy and energy efficiency in Central Asia by offering its expertise in the development of sound regulatory frameworks and by supporting investment cooperation with European financial institutions.

The Council noted that the countries of Central Asia have become significant partners of the EU.

"Ten years after the adoption of the Central Asia strategy, and more than 25 years after the five countries became independent, the Council welcomes the progress achieved in developing the EU's relations with Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan as well as with the Central Asian region as a whole," the document said.

The Council reaffirmed the EU's commitment to develop stronger relations and highlighted the need to strengthen dialogue and cooperation on human rights, education, sustainability as well as on tackling emerging security challenges faced by the Central Asian countries.

The EU-Central Asia relations are being developed under the EU strategy for Central Asia, signed in 2007 and reviewed in 2015.

The Council also invited the High Representative and the Commission to come forward with a proposal for a new strategy by the end of 2019 in accordance with the EU Global Strategy.

The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans Anatolian Natural Gas Pipeline and Trans Adriatic Pipeline. -0-

EBRD to Consider Extending Additional Financing for Lukoil"s Share in Shah Deniz 2

Baku/21.06.17/Turan: The Board of Directors of the European Bank for Reconstruction and Development (EBRD) will consider provision of a loan to LUKOIL Overseas Shah Deniz Ltd ("LOSD") to extend additional financing for its share in the second stage of the development of Shah Deniz, an offshore gas exploration and production project in Azerbaijan, said the message on EBRD"s website.

The amount of financing is up to $100 million.

The project includes two additional bridge-linked offshore gas platforms, 26 subsea wells, 500km of subsea pipelines, and the expansion of Sangachal Terminal.

The total volume of financing for LUKOIL"s share in Shah Deniz 2 project is $ 2.5 billion.

LUKOIL has a 10-percent share in the Shah Deniz project.

The contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserve is estimated at 1.2 trillion cubic meters of gas. The shareholders are: BP, operator (28.8 percent), AzSD (10 percent), SGC Upstream (6.7 percent), Petronas (15.5 percent), Lukoil (10 percent), NICO (10 percent) and TPOC (19 percent).

As part of the implementation of the Shah Deniz 2 project, the annual gas production volume will increase from 9 billion cubic meters to additional 16 billion cubic meters.

The cost of the second stage of the field"s development is estimated at $25 billion. It is planned to get the first volumes of gas within the project in 2018 and it will be the main source for the Southern Gas Corridor project, which envisages transportation of gas to Turkey and European markets. -0-

SOCAR Falls into "Iranian List"

Baku/21.06.17/ Turan: The Iranian National Oil Company (NIOC) has expanded the list of companies that will be able to participate in the tender for the development of oil and gas fields in the country, including the Azerbaijani state company SOCAR, NIOC said in a statement.

According to the information, the list also includes Russian Gazpromneft, Rosneft, Tatneft and Zarubezhneft. As a result, the number of foreign companies that can participate in the tender for the development of Iranian deposits has reached 34. -0

Oil Fund Holding Tender

Baku/21.06.17/ Turan: The State Oil Fund of Azerbaijan (SOFAZ), through a survey of proposals, selects companies that will provide it with clearing and brokerage services for working with futures contracts.

This is stated in the announcement posted on the SOFAZ website.

Under the terms of the selection, the companies must have a credit rating not lower than the investment grade, be members of the National Futures Association (NFA) and CME Group. -12D

Italy"s Eni Signs MoU with Iran on Oil & Gas Field Study

Baku/21.06.17/Turan: The Italian energy company Eni signed a memorandum of understanding with National Iranian Oil Company (NIOC) on June 20 to study two Iranian oil and gas fields.

Under the MoU, the Italian firm will undertake studies for development of the Kish gas field and the third phase of the Darkhovin oil field, Mehr news agency reported June 20.

Eni will submit its master development plan (MDP) to the NIOC within six months.

The Darkhovin oil field, located in the south-western province of Khuzestan, was discovered in 1965. The in-place oil reserves of the field have been estimated at over five billion barrels.

The first two phases of the project are now operational, and the oil field is currently producing 160,000 barrels of oil per day (bpd). The first phase became operational in 2005, and the second phase came on stream in February 2011.

Darkhovin"s third phase is to produce 110,000 bpd of crude and 210 million cubic meters per day of gas.

The Kish gas field is expected to yield 28 million cubic meters per day of gas, to be used domestically, and 11,300 bpd of gas condensate set for export. ---0--

Poroshenko Discusses Possibility of Supplying Liquefied Gas to Ukraine from US

Baku/21.06.17/ Turan: "During the meeting of the President of Ukraine and the US Energy Minister, issues of implementing joint projects in nuclear energy, energy production in Ukraine, as well as the possibility of supplying alternative fuels, in particular, liquefied gas from the United States were discussed," the press service of the President of Ukraine reported on June 20.

Poroshenko expressed his gratitude to the American side for significant practical assistance in strengthening Ukraine's energy security and noted the interest in wider involvement of modern American technologies and advanced experience in the energy sector in Ukraine.

The Ukrainian President welcomed the active interest in Ukraine from American energy companies.

The sides also discussed the strengthening of European energy security, in particular in the context of the opportunities for the modernization and development of Ukraine"s transit capacities and the implementation of new European transport and energy projects.

"The US Energy Minister noted the potential of Ukraine and compared its importance for Europe with the state of Texas for the US. The sides confirmed the common position regarding the threat of the Nord Stream-2 project for the energy security of both Ukraine and Europe," it was reported. -0-

Project of New Gas Pipeline to Europe

Baku/21.06.17/ Turan: Greece, Israel and Cyprus said they would accelerate the development of a pipeline that sends gas to Europe from the recently discovered East Mediterranean reserves, Oil-Expert reports.

European governments and Israel agreed in April to promote the project of the Mediterranean pipeline and to ensure the transportation of natural gas from Israel to Europe, setting a completion date for 2025.

Europe seeks to diversify its energy supply, and Greece seeks to become the center of gas transit from the Eastern Mediterranean to the continent.

The planned pipeline with a length of 2,000 km (1,250 miles) is designed to link gas fields on the coasts of Israel and Cyprus with Greece and, possibly, Italy. Its total cost is about € 6 billion ($ 6.7 billion).

It is believed that Israel and, to a lesser extent, Cyprus, are located on huge quantities of natural gas, given the significant discoveries over the past decade.

Israel has found more than 900 bcm of gas on the shelf, and some studies indicate another 2,200 bcm. Along with the European market, Israel is considering export options to Turkey, Egypt and Jordan.

The Cyprus field Aphrodite holds an additional 128 bcm, and the Cyprus water area is expected to contain even more reserves.

The supply options include a pipeline linking three countries, a pipeline to Turkey and the use of a liquefied natural gas storage facility in Egypt for shipment to Europe. -0-

Price of Brent Crude Falls below $46 PB for First Time since November 29

Baku/21.06.17/ Turan: The price of Brent crude oil has renewed more than half a year"s minimum, for the first time since November 29 last year, having fallen below $ 46 per barrel on fears of a global overabundance of raw materials, according to the bidding data.

As of 23.45 Moscow time, the price of August futures for the North Sea oil blend of Brent brand decreased by 1.75% - to 45.89 dollars per barrel. The price of August futures for WTI crude oil fell by 1.67% - to 43.69 dollars per barrel.

The traders were concerned about the resumption of production in Libya in two fields after the deal with Wintershall AG, which allowed the country to extract the maximum amount of oil over the past four years, Bloomberg reported.

"Investors will continue to reduce their positions until a significant reduction in the reserves occurs. It seems that market participants are checking the determination of Saudi Arabia and Russia to take all the necessary measures to reduce global oil reserves," the analyst of UBS Group AG Giovanni Staunovo reports.

OPEC and a number of non-member countries agreed at the end of 2016 to reduce oil production by a total of 1.8 million barrels per day from the October level, of which 300,000 barrels regard Russia. In May, the parties extended the agreement for nine months until the end of March 2018. Libya, along with Nigeria, did not join these agreements. -0