By Olga Yagova and Dmitry Zhdannikov
MOSCOW/LONDON, April 23 (Reuters) - Azerbaijan's BP-led
Azeri-Chirag-Guneshli (ACG) project will have to cut output
sharply from May for the first time ever as the country moves to
meet its commitment under a global deal to cut production, three
sources told Reuters on Thursday.
Oil majors operating large production sharing deals in the
ex-Soviet states of Azerbaijan and Kazakhstan have been
previously been excluded from any government-imposed production
decisions because such foreign investment is highly-prized.
But the scale of the coronavirus-driven oil crisis and has
made it impossible for Azerbaijan to cut output without imposing
restrictions on BP and its partner shareholders, which include
Hungary's MOL, U.S. ExxonMobil, Norway's Equinor
, Japan's Inpex.
BP, which as the leading shareholder speaks for ACG,
and the Azeri energy ministry both declined to comment.
Azerbaijan is not a member of the Organization of Petroleum
Exporting Countries (OPEC) but is a part of a wider group known
as OPEC+, which led by Saudi Arabia on the OPEC side and Russia
for other producers outside the organisation.
The third largest oil producer among ex-Soviet countries
after Russia and Kazakhstan needs to cut its oil output by a
total of 164,000 bpd to 554,000 bpd for two months from May
under the OPEC+ deal sealed this month.
Of this, ACG will be required to cut some 75,000-80,000
barrels per day (bpd) from May, sources told Reuters.
This accounts for about 15% of ACG's output, Reuters
calculations show. The ACG consortium reported production of
535,000 bpd on average last year and planned to maintain this
level in 2020.
The cut in ACG production will result in a drop in oil
exports via the Baku-Tbilisi-Ceyhan pipeline through Georgia and
Turkey, Azerbaijan's main oil export route, the sources said.
(Additional reporting by Margarita Antidze and Nailia Bagirova;
Writing by Katya Golubkova; Editing by Alexander Smith)
BP (BP.)
