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Petroleum

Azerbaijan's Oil Reserves: A Debate Between Domestic and International Estimates

Strategic Insights

— 2 min read

Azerbaijan's vast oil reserves have been a subject of speculation for decades, with the state-owned oil firm Socar and international companies providing conflicting estimates. President Aliyev recently stated that Socar's experts believe the country's total gas reserves could be around 4 trillion cubic meters, comprising 3 trillion cubic meters in the Apsheron area operated by Chevron and 1 trillion cubic meters in the Shah Deniz area operated by BP Amoco. Meanwhile, international discoveries in the Caspian Sea, particularly in the Kazakh side, have significantly boosted hopes of finding massive oil reserves.

Key Takeaways:

  • Azerbaijan's official estimate of proven oil reserves is 4.2 billion barrels, consisting of 3 billion barrels onshore and 1.2 billion barrels offshore.
  • The offshore areas awarded to foreign companies under Production Sharing Agreements (PSAs) since 1994 are estimated to hold over 25 billion barrels of oil.
  • President Aliyev estimated Azerbaijan's total gas reserves to be around 4 trillion cubic meters, with 3 trillion cubic meters in the Apsheron area operated by Chevron and 1 trillion cubic meters in the Shah Deniz area operated by BP Amoco.
  • The Caspian Sea's Kashagan formation is believed to contain up to 90 billion barrels of oil, with the eastern part estimated to have around 30 billion barrels.
  • Shell's discovery in the Kashagan formation is expected to cost around $600 million.
  • LUKoil of Russia announced the discovery of 2.2 billion barrels of recoverable oil at the Severny block in May 2000.
  • The Severny block is located off the Russian state of Astrakhan, previously considered the least promising part of the Caspian.

Statistics:

  • 4.2 billion barrels: Azerbaijan's official estimate of proven oil reserves.
  • 3 trillion cubic meters: Estimated total gas reserves in Azerbaijan, according to President Aliyev.
  • 3 trillion cubic meters: Estimated gas reserves in the Apsheron area operated by Chevron.
  • 1 trillion cubic meters: Estimated gas reserves in the Shah Deniz area operated by BP Amoco.
  • 25 billion barrels: Estimated oil reserves in offshore areas awarded to foreign companies under PSAs since 1994.
  • 90 billion barrels: Estimated total oil reserves in the Kashagan formation.
  • 30 billion barrels: Estimated oil reserves in the eastern part of the Kashagan formation.
  • $600 million: Estimated cost of Shell's discovery in the Kashagan formation.
  • 2.2 billion barrels: Estimated recoverable oil reserves discovered by LUKoil of Russia at the Severny block.

Sources:

  • "Azerbaijan's oil reserves: a debate between domestic and international estimates" (exact source not specified)
  • President Aliyev's statement at the Caspian oil and gas conference in Baku (exact source not specified)
  • Shell's announcement of the Kashagan formation discovery (exact source not specified)
  • LUKoil's announcement of the Severny block discovery (exact source not specified)

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