NOV. 21 2016 (The Conway Bulletin) — An Azerbaijan-based subsidiary of Canada’s Zenith Energy said it received the first payments for its oil sales at three onshore fields it is developing with state-owned SOCAR. Zenith Aran Oil and SOCAR had signed a production sharing agreement in March. Zenith has an 80% share in the Muradkhanli, Jafarli and Zardab fields for the next 25 years. SOCAR will retain the remaining 20%. Oil from these fields is sold internationally at the Russian Black Sea port of Novorossiysk. On the same day, British investment company Gunsynd invested £100,000 ($125,000) in Zenith Energy, as part of a £500,000 fundraising effort.

ENDS

NOV. 18 2016 (The Conway Bulletin) — Despite slowing domestic production and overall exports, Azerbaijan is stubbornly reaching out to building partnerships with other countries to sell its oil.

Last week, the government and state-owned SOCAR mulled the launch of a pilot programme with Egypt to send 2m barrels of oil to refine in Egyptian plants. In recent weeks, Azerbaijan also planned to send oil to Belarus and Ukraine and to build an oil terminal in Benin, of all places.

Sending oil to its former Soviet sisters Belarus and Ukraine would probably be feasible from a technical point of view, but analysts have shown that Azerbaijan might just not have enough oil to provide for its domestic demand and for the pipeline contracts it already has in place.

SOCAR is sending increasingly less oil through its main export pipelines, posting a 4% decrease via Baku-Tbilisi-Ceyhan, an 11% decrease via Baku-Supsa and an 11% decrease via Baku-Novorossiysk in the first ten months of 2016.

And in the first three quarters of the year, SOCAR posted an 8.7% fall in production due to the drop in the price of oil.

SOCAR’s poor performance in 2016 begs the question of whether the company’s bullish plans to export oil to new destinations and invest in West Africa make economic and financial sense. If there is any sense in this at all, it is difficult to find.

With oil prices still hovering around $50/barrel, SOCAR and its multinational partners in Azerbaijan will maintain low production figures, and this will certainly not boost exports.

The question is, now, who does Azerbaijan turn to to boost its client base.

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NOV. 8 2016 (The Conway Bulletin) — A source in SOCAR, Azerbaijan’s state-owned energy company, said that the company will supply Egyptian refineries with 2m barrels of oil annually, the Amwal Al Ghad magazine reported. Last week, Egypt and Azerbaijan agreed on a supply contract after Saudi Aramco said it would halt shipments to Egypt indefinitely.

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