Fitch: Oil prices to be satisfactory for Azerbaijan

By Azernews

By Leman Mammadova

Oil prices will be satisfactory for Azerbaijani exports, Associate Director at Fitch Ratings Marina Stefani told Trend.

Stefani said that oil prices are expected at $ 65 per barrel this year, and $ 62.5 in 2020.

The expert further added that gas production in the country will grow due to the second stage of development of the Shah Deniz field.

Stefani noted that according to expectations, the economy of Azerbaijan will continue to stabilize.

“We expect that macroeconomic indicators will continue to grow over the next two years, including in the non-oil sector,” she said.

She further touched open the issue of inflation and said that this year it would be between two and six percent.

Stefani also noted that costs will be moderate and a consolidated budget surplus is expected.

According to the Fitch Ratings, Azerbaijan’s economy will grow 3.5 percent in 2019, that is supported by the coming on stream of Shah Deniz 2 gas field and investments stemming from the extension of the production sharing agreement for the exploitation of the country’s largest oil field.

Shah Deniz is a giant gas condensate field, reserves of which are estimated at 1.2 trillion cubic meters of gas and 240 million tonnes of condensates. Within the second stage of field development, the volume of gas production can be increased to 24 billion cubic meters per year, according to forecasts.

Azerbaijan produced 6.4 million tons of oil and gas condensate in January-February 2019, which is almost equal to the production volume in the same period of last year. Over the same period, the volume of gas produced amounted to almost 5.9 billion cubic meters, including 3.9 billion cubic meters of commercial gas.

In 2018, Azerbaijan produced 38.76 million tons of oil and gas condensate, which is close to the production volume in the previous year.

The major part of oil production in Azerbaijan accounts for the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields.

Gas production in Azerbaijan in 2018 amounted to 30.59 billion cubic meters,while commercial gas production stood at 19.2 billion cubic meters.

In January-February 2019, Azerbaijan exported 5.78 million tons of oil and 2.02 billion cubic meters of gas.