In­dian com­pa­nies eye to ex­pand co­op­er­a­tion in oil & gas

Azer News - - Business - By Le­man Mam­madova

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.

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