BP share price down as Azeri oil output drops

on Feb 19, 2015
Updated: Oct 21, 2019

Oil output from BP Plc-led (LON:BP)fields in Azerbaijan declined last year, driving a fall in the country’s total oil production, Reuters has reported. BP’s share price has declined in today’s trading, having shed 1.20 percent to 445.88p as of 10:13 GMT. The shares are underperforming the blue-chip FTSE 100 index which currently stands 0.08 percent lower at 6,892.53 points.

Reuters today quoted BP-Azerbaijan as reporting that oil output at the Azeri-Chirag-Guneshli (ACG) oilfields had declined to 31.5 million tonnes last year from 32.2 million tonnes in 2013.Natural gas output from the Shah Deniz offshore fields in the country, however, rose to 9.9 billion cubic metres (bcm) last year from 9.8 bcm in 2013.
Falling oil production at the ACG oilfields, which account for most of Azerbaijan’s output, has raised concerns in the former Soviet country and presents a challenge for BP, whose concession to operate the fields expires in 2024. Bloomberg today quoted an unidentified source with knowledge of the matter as saying that Baku was considering all options including allowing the State Oil Co. of Azerbaijan, or Socar, to take over operating the field.

Edward Chow, senior fellow at the Centre for Strategic and International Studies, told the newswire that putting forward the idea was a natural opening position for negotiation, with the Azeri company having experience with the fields and time to improve capabilities should that decision be made.
According to the Financial Times, as of February 6, the consensus forecast amongst 34 polled investment analysts covering BP has it that investors should hold their position in the company. Analyst Ratings Network notes that the blue-chip oil and gas producer currently has a consensus ‘hold’ rating and an average price target of 456.23p.
As of 10:55 GMT, Thursday, 19 February, BP plc share price is 444.93p.

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