Government’s strange forecast: till 2020 oil price and extraction volume to be stable

The Azerbaijani government forecasts that from 2016 and 2019 oil extraction will be on average 40 million tons a year, Deputy Minister of Economy and Industry Sevindj Hasanova last on Friday during discussion of the draft of state budget of Azerbaijan for 2016 by the parliamentary committees.

            “The annual oil production is expected to be within 40 million tons,” said Hasanova.

            She said that in 2016 the oil extraction is forecast to be 40.7 million tons. “The oil GDP decline will constitute 1.7% in 2016. Specific weight of the oil industry in GDP will be below 30%,” Hasanova said.

            During this period the government forecast average annual oil price at $50.00 per barrel.

            While commenting on the government’s forecast of oil extraction for the near future, the Centre for Oil Studies of Azerbaijan mentioned that “in 2015 the country has entered the period of oil production decline.” During 2014 the country extracted 41.9 million tons and the volume of real extraction will total 41.2 million tons. Next year the country will hardly be able to preserve the forecast volume: the extraction will total 40.5 million tons at best. In 2017 for the first time the volume of oil extraction will be below 40 million tons. In 2019 the country will most likely extract about 38 million tons of oil and condensate, reported the Centre quoting the forecast of oil production released by BP-Azerbaijan (oil from the Azeri-Chirag-Guneshli bloc and condensate from the Shah Deniz field).