Caspian Energy (CE): Mr. Iskenderov, what tasks is Azneft PU facing in order to ensure dynamic development of the oil-gas sector?
Dashgin Iskenderov, General Director of SOCAR Azneft PU: Certain tension has been observed all over the world, including our region, caused by the decline of oil prices. Oil prices have fallen by 4 times so far.
We, Azneft PU, are closely monitoring both the market demand and geopolitical events, setting such attributes as maintenance of the current oil production and dynamic development as a major objective for ourselves. For this purpose, we are carrying out certain work on opening and commissioning of new oil-gas fields.
At the first glance, decline of oil prices appears a serious problem. But in case of the right approach, high performance and high quality management, we can turn this problem into an advantage and carry out a successful transition to the following stage of development.
Meanwhile, in 2015 Azneft PU prepared a plan of actions covering an upcoming 4-year activity. The program provides maintenance of current production rate, expansion of areas of prospecting sites for drilling of new oil-gas wells, repair of emergency sites and construction of new platforms.
As is known, the use of conventional sources of energy usually leads to the environmental pollution. Considering the importance of the environment, we, Azneft PU, set an objective to prevent and reduce environmental pollution during oil-gas production.
Azneft PU is one of the advanced enterprises contributing to the preservation of the environment within the country. The Union annually performs activities aimed at creating of ecologically clean environment and limiting of hazardous substances into the atmosphere.
Reduction of carbon emission at four enterprises of Azneft PU, (Tagiyev OGPD, Amirov OGPD, Narimanov OGPD and Bibi-Heybat OGPD) where emission rate has been reduced to zero, is another example.
CE: To what degree was it possible to optimize the activity in conditions of low oil prices?
Dashgin Iskenderov: Amid an ongoing decline of oil prices at global markets, SOCAR in recent years has been carrying out task-oriented operations to preserve financial sustainability and optimize expenditures in compliance with the general practice in the field of international oil-gas operations.
Realizing our responsibility, we, as Azneft PU and SOCAR’s major enterprise, are taking important measures to reduce and optimize expenditures in the midst of low oil prices and have already achieved positive results in this direction.
Special attention is given to the income and expenditure budget without affecting the current technological activity. In particular, the staff list of subordinate structures of Azneft PU is being reconsidered. Financial resources are directed primarily to high profitability sites at lower capital expenditures.
In this aspect, measures are taken to lower transport and communication expenditures as well. A much stricter control for electricity consumption has been maintained. Besides, the control over use of products, works and services aimed at securing stable oil-gas production, transportation and refining processes, has been increased as well.
CE: What are the prospects for development of new fields and increase of the resource potential of Azerbaijan?
Dashgin Iskenderov: Seismic survey and comprehensive engineering-geological operations are permanently carried out in this direction in order to solve the assigned tasks. Residual oil-gas reserves of developed fields are currently explored. New fields are surveyed in order to conduct drilling on them. Exploration data of prospective structures is carried out in order to start development of new fields.
Considering high volumes of recoverable reserves at producing fields now, operations on construction of new as well as enlargement of operating platforms are currently underway. Positive results have been obtained by means of determining the oil-gas bearing limit of horizons, increasing the size of geological survey and analyzing obtained data.
At present, Azneft PU is operating 18 onshore and 13 offshore oil-gas fields of the republic.
CE: Could you comment on the production volumes for the past year and since the beginning of this year? What are the forecasts of production for 2016-2018?
Dashgin Iskenderov: We produced 6 mln 778 thou tonnes of oil in 2015. Increase of gas production indicators has been observed over this period as well. Thus, over 6.1 bcm of gas was produced last year instead of scheduled 5.7 bcm. In other words, the plan has been fulfilled by 107.6%.
Since the beginning of the year Azneft PU has produced 1 mln 57.3 thou tonnes of oil instead of 1 mln 56.8 thou tonnes of oil. The plan was fulfilled by 100.3%. Over the past three months of the period under review, gas production was also ahead of the plan. If the plan for the reporting period of 2016 aimed at producing 1 bcm 391 mln cubic meters, the real production indicator totaled 1 bln 437 mln 102 thou cubic meters of gas. The plan was fulfilled by 100.3%.
Considering Azneft PU’s oil production forecast for 2016-2018, it can be stated that the oil production plan has been set as following: 6.3 mln tonnes for 2016, 6.4 mln tonnes for 2017 and 6.5 mln tonnes for 2018. Gas production is expected to total 5.6 bcm in 2016, 5.8 bcm in 2017 and 5.8 bcm in 2018.
CE: What measures are undertaken to stabilize oil production in the country? What are the possibilities of increasing production at existing offshore fields? What kind of work is carried out for increasing an oil output?
Dashgin Iskenderov: Azneft PU has prepared a plan of action for increasing and stabilizing oil production in 2016-2018. The major objective is to prevent the decline of oil and gas production and stabilize it. Therefore, a number of geological, technical, technological and organization operations are planned to be carried out at idling and producing well stock.
According to the program, it is planned to increase technical-geological activities, expand introduction of screw-shaped pumps and paraffin deposit removal plants, drill side-holes, expand sites in order to drill new oil-gas wells, conduct repair work at sites possessing dangerous hydrotechnical facilities, construct additional platforms and increase drilling points at operating platforms.
Along with geotechnical activities and modern recovery methods aimed at prevention of production decline, there are science-research operations performed in order to raise their effectiveness. Drilling and commissioning of new wells production and horizontal wells will also play a big role in increase of oil-gas production.
CE: Which innovations are introduced by the company in the process of production of hydrocarbons?
Dashgin Iskenderov: Oil-gas producing companies were only considering production increase in the period of oil prices exceeding $100 per barrel. When prices went down, companies started thinking of the way to realize an idea “low cost price – high effectiveness”. As a result, intensive introduction of innovations was commenced in the course of production of hydrocarbons. Analyses showed that introduction of innovative methods enables to raise production by 5-6 times. In other words, innovations enable to produce up to 10 trillion of additional barrels of hydrocarbons per year.
Azneft PU has been engaged in introduction of innovations for a long time. These operations have been performed on regular basis prior to the decline of oil prices. Intensive work on introduction of progressive innovations in oil-gas production is still underway. In particular, new process equipment is applied intensively in construction and assembling operations, development and operation of fields. Use of environmentally friendly and energy efficient equipment is another priority task of Azneft PU.
Different innovations are also used to increase production effectiveness. As an example noteworthy is the use of wire filters applied for sand control after commissioning of wells. Introduction of these filters has a significant impact on increase of oil production. As far as innovations are concerned, introduction of the double packer protector enables to recover and prevent leakage in damaged or rusting production strings.
Moreover, in the course of well abandonment introduction of new technologies enables to perform operations on cutoff of wellheads and reliable pressurization of wellheads on the seabed. This method helps to conduct a safe well abandonment without damaging the ecology and water area. Along with this, use of the “gas-dynamic” separator helps to separate liquid from the content of produced gas.
CE: What work is carried out to improve social conditions of oil-men?
Dashgin Iskenderov: The priority task for Azneft PU is to make sure that every oilman is provided with a worth living and working place, which headlines a human factor, protection of his life and health. The Union not only ensures the protection of life and health vie economic factors but also is solving social issues that are of particular importance when fulfilling the abovementioned criteria. For this reason, Azneft PU carries out a regular work on improvement of social conditions of workers and safe labor conditions.
The concern for employees has been of paramount importance in Azneft PU. The Union not only takes care of their living conditions but also is doing everything to increase their individual growth so that they regularly attend professional trainings to enhance their working skills.
Azneft PU is implementing a project on development of the potential of young human resources for the purposes of their stimulation. Along with the young human resources, the work on promotion of distinguished skilled employees is carried out.
Different polls are held among workers throughout a year in order to improve their social well-being. Problems revealed during this poll find their solution afterwards. Every employee’s opinion is considered now when undertaking advance measures.
I may assure that we will continue providing safe and sound conditions for workers on all production sites of the Union.
