The longer-term outlook on the Azeri oil sector has improved in recent months, with progresstowards renewal of the contract on the flagship ACG field. However, near-term prospects have dimmed,both with the rollover of the OPEC, non-OPEC production cut deal and, more importantly, signs ofcontinued aggressive decline rates on the country's mature producing assets. Our outlook on the gas sectorremains bullish, as the Shah Deniz II project progresses towards first gas in 2018 and with a number ofother projects prospectively in the pipeline, in particular Absheron. The Azeri refining sector is relativelypoor, but prospects are improving with continued progress towards upgrading of the existing capacity.
Latest Updates And Key Forecasts
The country boasts substantial, prospective and underexplored acreage, in particular offshore in the SouthCaspian basin. SOCAR has also announced plans to restart onshore exploration, targeting ultra-deep oildeposits.