Azerbaijan supports increase in oil production until end of 2021 within OPEC+

By Azernews

By Ayya Lmahamad

Azerbaijan has supported the decision to increase daily crude oil output by 400,000 barrels per month in August-December 2021, and to extend the Declaration of Cooperation until the end of 2022, with partial adjustments to the base level of oil production from May next year, at the 19th Ministerial Meeting of OPEC and non-OPEC countries.

The new Declaration of Cooperation envisages increasing of daily crude oil production volume in Azerbaijan every month from August to the end of the year and reducing the obligations related to cuts accordingly.

Moreover, from May 2022 to the end of the year, the calculation of Azerbaijan's oil production obligations will be continued on the basis of the existing base. In other words, the 718,000-barrel daily crude oil production in October 2018 in Azerbaijan will remain at the base level for determining the output level next year.

Participating at the meeting, Azerbaijan's Energy Minister Parviz Shahbazov expressed Azerbaijan's support for OPEC + new decision to contribute to the process of balancing the global oil market.

It should be noted that the new agreement provides for a reduction of the existing 5.8 million barrels cuts in OPEC + countries by 2 million barrels by the end of 2021.

Additionally, it was decided to hold the next Ministerial Meeting of OPEC and non-OPEC countries on September 1, 2021.

In April 2020, OPEC and non-OPEC countries entered into an agreement on the reduction of daily oil production by 9.7 million barrels in May-June and 164,000 barrels for Azerbaijan.

In the second phase of the agreement, covering the period from August 1 to December 31, the daily production of crude oil in OPEC+ countries was reduced by 7.7 million barrels, which is 18 percent less than in October 2018.

According to the agreement reached at the 12th Ministerial Meeting, Azerbaijan had to increase daily oil production by 8,000 barrels and keep production at the level of 595,000 barrels in January. At the 13th Ministerial Meeting of the OPEC+ countries, it was decided to continue the existing quotas on daily crude oil production in February-March, and later, at the 14th Ministerial Meeting to continue with the existing quotas on daily crude oil production in April.

Earlier, Azerbaijan supported the OPEC+ agreement on increasing the crude oil production up to 1.1 million barrels in May, June and July, reached at the 15th ministerial meeting.  Under the new Declaration of Cooperation, the country’s daily crude oil production will be maintained at 603,000 barrels in May, 610,000 barrels in June and 620,000 barrels in July.