First time in 130 years history of oil processing in Azerbaijan, processing depth reached 80.4 percent: Interview with SOCAR Vice PresidentSOCAR Vice President for Refinery, Davud Mammadov, spoke with Trend Capital in an exclusive interview:
Trend Capital: Recently the reduction in the black oil production in the refineries of SOCAR (State Oil Company of Azerbaijan Republic) in January 2009 caused bewilderment in some media outlets. What is the reason for reduction?
Davud Mammadov: I can indicate two reasons for this. Firstly, because earlier the natural gas production in the country was low and as the import of natural gas from Russia has been stopped since 2007, we had to provide power stations with black oil for the electric power production in the autumn-winter season. This was disadvantageous from the economic point of view, but we were forced to do this. Now the situation has changed, and the increase in the gas production in the country led to reduction in the black oil demand. It is not occasional that in 2009 the forecast on black oil production is 45.9 percent lower than in 2008. Actually, the production of black oil in January-February 2009 was 61.1 percent or 185,120 tons less than the same period of 2008, and this is expedient from the economic point of view.
The second reason is connected with the fact that since 2008 for the first time in the 130 years history of oil processing in Azerbaijan, we attained an increase in the depth of processing of up to the unprecedented level – 80.4 percent. Only in January-February 2009, the index of the depth of oil processing grew 13.9 percent compared with the same period of the last year. This means that we gave up the combustion of black oil in stoves, and as a result of its repeat processing, obtained light oil products (different forms of gasoline, kerosene, etc.). The economic effectiveness of oil processing increased as a result. It is not occasional that in January-February 2009, the production of light oil products from the crude oil grew 9.4 percent compared with the same period of 2008.
Q: The quality of bitumen produced by Azneftyag Refinery has also been topic of discussions recently …
A: Approximately 220,000 tons of bitumen were produced at the plant in 2008. This product was delivered to over 80 local and foreign enterprises operating in Azerbaijan, including SOCAR’s construction-repair organizations (3,181 tons). Such big enterprises as nine organizations Azeryolservis (71,385 tons), Yoltemirtikinti department of the Nakhchivan Autonomous Republic (10,106 tons) preferred to operate with bitumen produced by our company. Moreover, 28,799 tons of bitumen was exported to Georgia in 2008. Bitumen, as all products of processing, is produced in complete accordance with the state standards and norms of the Republic of Azerbaijan. Up to now, no buyer including foreign companies operating in Azerbaijan has appealed to SOCAR with complaints on quality of our bitumen.
Q: Does SOCAR intend to increase bitumen production?
A: SOCAR will be able to provide road construction and repair enterprises with high-quality oil bitumen in 2009. However, as you know, roads and bridges are being constructed rapidly in Azerbaijan over the last years. Possibly, from 2010 company’s existing production capacity will not be able to keep pace with the speed of operations on construction and repair of roads. In this case a necessity can appear for the construction of additional bitumen producing plants. Currently, this issue is under consideration and will be solved in its time./Trend/