Azerbaijan has no plans to join Opec cuts

Azerbaijan has no plans to join Opec in cutting production and aims for the "maximum level" of output this year, a senior official said on Thursday, in remarks appearing to contradict an earlier pledge to back output cuts. Elshad Nasirov, vice-president of state oil firm Socar, told Reuters financial television that Azerbaijan would produce at least 50 million tonnes of oil this year, up from 44 million tonnes in 2008.
"We are not a member of Opec. Were not following somebodys instructions. We produce as much oil as we can, as much as we want," Nasirov said in an interview. "The production level was decreased last year due to several factors, and all of those factors are very important. But were increasing production now," he said. "By the end of the year, production will be at the maximum level." Ex-Soviet Azerbaijan was considering becoming an Opec member and was willing artificially to cap oil production even after fixing technical problems at some of its fields in the first quarter of 2009, Energy Minister Natik Aliyev said in December.
The comment was made when the price of oil was falling fast and approaching $30 per barrel, less than half of what Azerbaijan needs to balance its budget this year. Oil has recovered to above $50 since then. The Caspian Sea nation was the only non-Opec member to offer output cuts at the groups meeting in Algeria in December. And in February, it cut its 2009 oil production forecast by a fifth to 45 million tonnes, potentially ending a decade of rapid output growth.
But Nasirov denied the country had any intention of joining Opec, or the Organisation of the Petroleum Exporting Countries. "I have never heard anything like this yet," he said. Most of Azerbaijans oil production is controlled by a BP-led consortium, which since September has experienced technical problems at the giant Azeri-Chirag-Gyuneshli (ACG) deposit.
The deposit is the main source of oil for the BP-operated Baku-Ceyhan pipeline running from the Caspian Sea to the Turkish Mediterranean coast. Nasirov said any decline in oil production would be caused by the age of Socars own fields, but he said the country would make every effort to maintain production at high rates. "Even exports to Iran were used in August-September last year in order to keep production at the same level," he said, referring to a period when pipelines in neighbouring Georgia were shut down as a result of a brief war with Russia. "Oil production is something that has to be steady."