UPDATE 1-Azeri president slams BP for oil output decline


(Adds details, background)

By Lada Evgrashina and Afet Mehdiyeva

BAKU, Oct 11 (Reuters) - Azeri President Ilham Aliyevslammed BP over falling oil output at a group of largefields that the oil major is developing with Western partnersand said the firm had pledged to fix problems within one month.

"There were discussions with BP over decline in oilproduction and they admitted they had allowed some seriousviolations and promised to fix them within one month," Aliyevsaid during a government meeting late on Wednesday.

The meeting was broadcast by Azeri state TV.

BP's spokeswoman in Azerbaijan, Tamam Bayatly, said theBritish company remained devoted to its Azeri operations, one ofthe biggest in the world for BP, and would work with state oilcompany SOCAR to resolve issues.

BP is the biggest foreign investor in Azerbaijan, where itoperates the 1.2 billion tonne Azeri-Chirag-Guneshli (ACG) groupof fields and the giant Shah Deniz gas project.

The prospect of so much non-OPEC crude ensured considerablewestern diplomatic support for the project, a major investmentfor BP.

ACG was supposed to produce more than 1 million barrels perday (bpd) after the project's third phase was completed in 2008.

However, ACG has not lived up to expectations. After hitting823,000 bpd in 2010, output has fallen. Production averaged684,000 bpd in the first half of this year and oil executivesand diplomats told Reuters last month the challenge is now tokeep output at around 700,000 bpd.

(Writing by Margarita Antidze; editing by James Jukwey)


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