Indian companies eye to expand cooperation in oil & gas
IIndian oil companies intend to expand their activities in the oil and gas sector of Azerbaijan, former Indian Ambassador to Azerbaijan Sanjay Rana told Trend.
He recalled that India's largest oil and gas company, Oil and Natural Gas Corporation (ONGC), has share in Azerbaijan’s Azeri-Chirag-Gunashli (ACG) oil and gas project (2.31 percent).
He emphasized that India has good potential in oil and gas sector and Indian companies are keen on the participation in the development of other oil and gas projects in Azerbaijan.
Rana also noted that there is great potential for cooperation in pharmacy, tourism and other spheres as well.
He underlined that the economic relations between the countries are getting stronger every year.
“Bilateral trade is growing every year.We hope that our economic cooperation will grow further in the coming years,” he said.
According to the State Customs Committee of Azerbaijan, trade turnover with India in January-November 2018 amounted to $836.7 million. As compared to the indicator for the same period of the last year, the trade turnover between the countries increased by 45.9 percent, while the exports of Azerbaijani products have doubled. Azerbaijan imports many goods from India including pharmaceuticals products, engineering goods, automobiles and spares, agricultural and meat products and IT services. India's main import from Azerbaijan is crude oil.
India's GAIL Limited has signed a memorandum of understanding with SOCAR for the joint realization of the liquefied natural gas capacities through liquefied natural gas supplies and the global promotion of LNG projects.
At present, about 170 Indian capital companies are operating in Azerbaijan.
Azerbaijan and India are working to sign a Bilateral Investment Treaty and Double Taxation Avoidance Agreement which would enhance the confidence of investors.
India and Azerbaijan are also cooperating in development of International North-South Transport Corridor (INSTC) which will boost trade and commercial exchanges in the region. India has developed the Chanbahar port in Iran, which began operating in November 2017, and this port will link Indian ports with Azerbaijan and other countries.
Azerbaijan is developing the non-oil sector and Indian companies are interested in using opportunities for non-oil sector development in such areas as agriculture, industry, pharmaceuticals and information technology.
India is very strong in pharmaceutical sector and Indian companies are keen to enhance their presence in Azerbaijan. Sun Pharma of India is building a pharmaceutical factory near Baku, a joint venture with Azerbaijani partners. Indian companies interested in many incentives provided by Azerbaijani government for investors in Techno and Agro Parks.
India is interested in cooperation with Azerbaijan's Small and Medium Business Development Agency and AZPROMO, and considers that sending the Azerbaijani export mission to India would be important for the development of relations in the economic sphere.
Both India and Azerbaijan have started online visa issuance from 2017 which greatly helped in tourists' travel. Recently, Azerbaijan Tourism Association (AZTA) and the Travel Agents Association of India (TAAI) have signed a Memorandum of Cooperation during the international tourism fair SATTE 2018 in Delhi on February 3, 2018, that is of great importance.
Most of oil production – 1,590 million barrels - is expected from the Balakhani field. This figure was 1.7 million barrels in 2017 and 1.78 million barrels in forecast for 2018.
Zigh-Hovsan-Absheron field is expected to produce 0,546 million barrels, Karasu field - 0,714 million barrels, Surakhani field - 1,190 million barrels.
Production in Binagadi, Shirvan and Kursangi-Garabagli fields is forecasted to fall, with the production at the Binagadi field expected at the level of 0.946 million barrels, which is 2.87 percent less in comparison with the forecast for 2018. The Shirvan field is expected to produce 1,017 million barrels, that is 0.59 percent less, while KursangiGarabagli block of fields is forecasted to reduce the production by 7 percent to 1,039 million barrels.
Meanwhile, the Neftchala field is expected to increase the production by 1.7 percent to 0,235 million barrels, Muradkhanli-Jafarli-Zardab block of oil fields - by 1.64 percent to 0,122 million barrels.
Azerbaijan has a large number of oil fields and promising structures in the Caspian Sea. The overwhelming part of oil produced in Azerbaijan falls on Azeri-Chirag-Gunashli (ACG) block, which covers an area of more than 432 square kilometers.
Total ACG production for the quarter 2018 was on average 597,000 barrels per day (b/d) (about 54 million barrels or 7 million tonnes in total).
However, the country has significant residual oil reserves in onshore fields.
Azerbaijani operating company Salyan Oil, which is developing the Kursangi and Garabagli onshore oil fields in the country, planned to increase investments in 2018.
The investments will allow the operating company to pay more attention to recovering production at the block.
According to the approved budget, Salyan Oil plans to invest about $40 million in the development of Kursangi and Garabagli fields in 2018, which is significantly more than in the previous year.
The main part of investments will be used for the major overhaul of existing wells, perforation work and the use of expensive new technologies. The main focus of the company will be on maintaining and increasing oil production at the fields, the source added.
Salyan Oil produced about 162,000 tons of oil from Kursangi and Garabagli fields in 2017. Around 445 tons of oil per day is produced from Kursangi and Garabagli fields.
The fields are located in Azerbaijan’s Salyan district, around 150 kilometers from Baku. Some experts believe that the remaining oil reserves in the contract area exceed 150 million tons.
The contract for the development of Kursangi-Garabagli was signed in 1998 for a period of 25 years. Participants of Salyan Oil are the Azerbaijani state oil company SOCAR and China National Oil & Gas Exploration and Development. ndia, where oil and gas are among the key eight sectors of the economy, naturally, is keen to establish partnership relations with such a hydrocarbon-rich country as Azerbaijan.