Page 43 - Azerbaijan State University of Economics

Gorkhmaz Imanov, Yadulla Hasanli: Forecasting of oil and gas extraction in Azerbaijan on the basis
of Hubbert’s model

here, QD is a current exploration of oil and gas; CQD – the cumulative exploration of entire oil

and gas reserves in the region; a is parameter defining the initial growth norm (it defines the

height of Hubbert’s curve) and URR is the last extracted (recoverable) resource, which the

function of prices, expenses, technologies and regional characteristics.

The equation (5) is called the Square Hubbert’s curve model. We would like to note that

this curve is not the original Hubbert’s model; actually it is the result of Uhlers information and

it is the result of mentioned above decreasing effects. We guess that such form of the curve is

more function of cumulative production than the function of information and physical

amortization.

The model can add the indicator variables till its statistical substantiation. The information

about the indicator variables and their application can be taken from the model itself.

Information database: the information required for the realization of this model was

taken from the State Statistics Committee of Azerbaijan Republic, Oil Fund and Ministry of

Economy and Industry.

Realization and forecasting of Hubbert’s model. Let’s evaluate parameter a (growth rate

of oil production) through the econometric methods. In order to reliably identify the growth of

oil production in Azerbaijan during 1998-2010 we would like to evaluate the parameters of the

following equation:

at
Oil production = a 0e (1+ )

here, – the initial oil production volumes, – the growth rate of oil production, - standard

deviation. In order to make the results of the model more realistic we have added DAMMY

qualitative parameter, which would reflect the significant drop in oil prices started and financial

crisis started in 2008 and continued till 2010.

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