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UPDATE 1-BP says its Azeri oil output down 7 pct in 2012

Fri, 01st Mar 2013 12:05

* BP output at ACG field falls faster than Azeri total

* Falling output has aroused concern in Azerbaijan

* Output from Shah Deniz gas field is up

By Lada Evgrashina and Margarita Antidze

BAKU, March 1 (Reuters) - BP's output at Azerbaijan'sAzeri-Chirag-Guneshli (ACG) fields was down 7 percent in 2012,it said, showing a faster fall than that of total Azeriproduction in a trend that has drawn criticism from thecountry's president.

But the British oil major's output rose from the Shah Denizgas field, the country's biggest.

BP said in a news release on Friday that oil output at ACGwas 32.9 million tonnes in 2012, down from 35.4 million tonnesin 2011.

Falling oil production at the ACG oilfields, the biggest inAzerbaijan, has raised concerns in the ex-Soviet republic andprompted President Ilham Aliyev to accuse BP of making "falsepromises".

Officials at BP and state energy company SOCAR say thegeology of the country's main oilfields has fallen short oforiginal expectations and they have cited maintenance and highersafety standards at BP after the Macondo oil spill in the Gulfof Mexico as reasons behind the falls of the past 18 months.

Extending a drop that began in 2011, Azerbaijan's oil andcondensate production fell 5.3 percent to 42.98 million tonnesin 2012 from 45.40 million in 2011.

BP said on Friday it exported 282.9 million barrels of oilfrom the ACG in 2012, down from 291.5 million barrels in 2011.Its export via the Baku-Tbilisi-Ceyhan pipeline declined to 246million barrels last year from 257.3 million barrels in 2011.

During 2012, the ACG consortium led by BP spent about $725million in operating expenditure and $2.5 billion in capitalexpenditure.

In 2013, BP plans about $758 million in operatingexpenditure while capital spending should be roughly unchanged.

GAS OUTPUT UP

In contrast, natural gas output at the Shah Deniz gas field,also operated by BP, rose in 2012 to 7.73 billion cubic metres(bcm) from 6.67 bcm in 2011.

It also produced 2.0 million tonnes of condensate at ShahDeniz, up from 1.8 million tonnes produced in 2011.

Azerbaijan's biggest gas field, Shah Deniz is beingdeveloped by consortium partners BP, Statoil, AzeriSOCAR, Total and others. It is estimated to contain1.2 trillion cubic metres of gas.

Shah Deniz I has been pumping gas since 2006, while gas fromits second stage is expected to reach Europe by 2019, SOCAR saidlast month.

BP said Shah Deniz I production was currently at plateauwith production facilities running at maximum capacity of 966million standard cubic feet per day and approximately 55,000barrels of condensate per day when markets are available.

On average 21.1 million standard cubic metres of Shah Denizgas was exported from the terminal daily in 2012.

During 2012, Shah Deniz consortium spent $269 million inoperating expenditure and $1.1 million in capital expenditure. Operating expenditure is expected to fall this year to $222million but capital spending will rise to $2.7 billion.

Total gas production in Azerbaijan rose 4.3 percent to 26.8bcm last year from 25.7 bcm in 2011.

The former Soviet republic ships its oil via five mainroutes: Russia's Black Sea port of Novorossiisk, neighbouringGeorgia's Supsa, Batumi and Kulevi ports, and Turkey's Ceyhan.

Azerbaijan sells gas to the domestic market and to Georgiaand Turkey via the Baku-Tbilisi-Erzurum pipeline as well as toRussia.

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