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Tuesday, May 23, 2006

President of Kazakhstan signs law on free trade with Azerbaijan

24 May 2006 - Today.Az - Nursultan Nazarbayev, President of Kazakhstan, signed the law "On ratification of the Protocol on changes and amendments in the agreement between the government of the Republic of Kazakhstan and the government of the Republic of Azerbaijan on free trade as of 10 June, 1997," yesterday, May 23. Earlier it was reported that the protocol provided cancellation of exemptions of certain commodity articles from the free trade regime between the two states. The protocol was signed on May 24, 2005, in the course of bilateral work on strengthening co-operation within the EurAsEC, Kazakhstan Today reports citing the presidential press service.

Azerbaijani-German trade hits $250 mln in 2005 - minister

BAKU, May 23 (RIA Novosti) - Trade between Azerbaijan and Germany increased 24% year on year in 2005 to reach $250 million, Azerbaijan's deputy economics minister said Tuesday. Niyazi Safarov said German investments in Azerbaijan totaled some 160 million euros, and that cooperation with the EU and Germany in particular was a priority for the country's economic policy. German Ambassador to Azerbaijan Detlef Lingemann said the German government backed the country's program to develop its oil sector, and encouraged German companies to join projects in the area.

Friday, May 19, 2006

Question of Azerbaijan leaving CIS is not on the agenda

Commonwealth of Independent States05–19–2006 Regnum News – "The Azerbaijani government believes that the CIS and regional organizations failed to achieve their tasks and need to be subjected to reforming. The CIS should be improved and developed," Deputy Foreign Minister Mahmud Mamedkuliyev is quoted as saying in Baku by Azeri Press. According to Mamedkuliyev, Georgia and Ukraine do not consider the CIS activity to be satisfactory and think it over about leaving the CIS. "At present moment, Azerbaijan ha no task of dropping out of the CIS, the issue is not on the agenda. Azerbaijan is working over strengthening CIS positions," he stressed.

Thursday, May 18, 2006

Ilham Aliyev met with US Assistant Secretary of State

05-07-2006 REGNUM News - President of Azerbaijan Ilham Aliyev received US Assistant Secretary of State for Business Affairs Frank Mermoud, REGNUM was informed at Presidential Administration press office. The Head of state stressed the strategic character of Azerbaijani-US relations. Speaking of fruitful meetings and talks that he had during his recent visit to the US, Aliyev stated that the visit should positively influence all the spheres of the bilateral relations, including economic cooperation. Addressing to Aliyev, Mermoud said: “We believe that your visit to the USA was a success.” Mermoud highly appraised meetings of the Azerbaijani President in the US. Particularly, the guest mentioned that Ilham Aliyev’s speech before US businessmen made a good impression..

Wednesday, May 17, 2006

IFC and ADB to own 35% of Azerigasbank shares by mid-June

16 May 2006 [09:07] - Today.Az - International Finance Corporation (IFC) and Asian Development Bank (ADB) are expected to obtain Azerigasbank Joint-Stock Bank shares of 17,5% for each by mid-June this year. Corresponding contracts are expected to be signed between international financial institutions and the Azerbaijani bank. Share in bank's nominal capital will be provided by additional emission, APA reports. IFC and ADB will purchase bank shares with their nominal values basing on primary information. Azerigasbank JSB will make its nominal capital AZN12 million on the account of additional emission. Azerigasbank JSB was founded in 1993. Currently 94% of shareholders are natural persons. Bank assets were AZN59,473 million, credit portfolio AZN33,751 million, total capital AZN7,435 million and nominal capital AZN5,8 million at the beginning of this year.

Deloitte & Touche to examine Azeri oil revenue transparency

Deloitte Touche17 May 2006 [14:05] - Today.Az - The reports submitted by the stakeholders of the Extractive Industries Transparency Initiative (EITI) for 2005 will be reviewed by Deloitte & Touche auditing company. According to AssA-Irada, the company will collate the reports on payments made to the government by local and foreign companies with the government's revenue statistics. Invitations have been sent to four international auditors (also to Earnest & Young, PriceWaterHouseCoopers and MurStepehensAzerbaijan). Deloitte & Touche was appointed to do the job after the evaluation of all proposals, a source from the State Oil Fund told AssA-Irada. The Azerbaijani government has already revealed three reports within the EITI framework. The Transparency Initiative was announced by British Prime Minister Tony Blair at the world summit on sustainable development in September 2002. Its goal is to increase the transparency of payments of oil, gas and mining companies made to the government and state revenues from extractive industries. Azerbaijan joined the Initiative at a conference on EITI in London in June 2003.

Kazakhstan confirms BTC role

17 May 2006 [14:18] - Today.Az - Kazakhstan has made up its mind about joining the Baku-Tbilisi-Ceyhan (BTC) main export pipeline to take Caspian oil to world markets. An agreement to that effect will be signed by the presidents of the two countries at a meeting on joint confidence building measures in Asia, AssA-Irada reports. The issue was discussed at a Kazakhstan cabinet meeting chaired by Prime Minister Danial Akhmetov. He said the transportation of oil must be carried out by local companies to ensure that state interests are observed. Akhmetov said consultations at expert level and discussions on taxation aspects were currently underway. "We have yet to reach agreement on these issues," he added.

AirBaltic launches Azeri flights

Photo: AFP17 May 2006 [14:09] - Today.Az  – Latvian airline AirBaltic announced the opening of direct flights from Riga to Baku at the official reception at the Excelsior Hotel on Monday. According to AssA-Irada, the company will administer flights in both directions twice a week, on Mondays and Thursdays. The one-way trip onboard Boeing 737 will take 3 hours and 50 minutes and cost 129 US dollars and more. The prices are quite competitive not only with those offered by other airlines, but also with bus, car, train or ferry costs. The new link will provide for more convenient transit from Baku to European, Scandinavian and Baltic states. AirBaltic is serving more than 30 destinations in Europe and CIS through its flights from Riga, Latvia and Vilnius, Lithuania. Early in May, the company launched similar flights from the Georgian capital Tbilisi. Addressing media representatives and businesspeople at the reception, Air Baltic President Bertolt Flick thanked the Azerbaijani and Latvian governments, as well as the Azerbaijan Airlines (AzAL) and the Ministry of Transport, for assistance in the speedy opening of the flight. "We are very pleased to open the new flight from Riga to Baku in cooperation with such an important partner as Azerbaijan Airlines", he said.

Friday, May 12, 2006

BTC Oil Pipeline to Set in Operation July 13

11/05/2006 (13:18) RZD-News - The ceremony of Baku - Tbilisi - Ceyhan oil pipeline in Turkey setting in operation is scheduled for July 13. The Minister of Industry and Energy of Azerbaijan Natik Aliyev informed the journalists. The Minister informed that high-ranking officials of Azerbaijan, Georgia, Turkey, the USA, the Great Britain and other countries are expected to participate in the ceremony. The BTC pipeline length is 1767km, coming across Azerbaijan - 443 km, Georgia - 248km, Turkey -1076 km. The pipeline flow capacity is 50 mln. tons of oil per year. The pipeline capacity is 50 million tons of oil per annum. The participants of BTC project are the following: BP (30.1%); SOCAR (25%); Unocal (8.9 %); Statoil (8.71 %); TPAO (6.53%); Itochu (3.40%); Amerada Hess (2.36 %); ENI (5%); ConocoPhilli?s (2.5%); In?ex (2.5%), Total (5%). ENI, ConocoPhillips, Inpex, and Total participate in Kashagan field development. At present the process of pipeline filling is continuing. Sending of the first tanker with Azerbaijan oil from port Ceyhan is expected to take place in the end of May. The solemn ceremony will be held in July, reports Kazakhstan Today.

Wednesday, May 10, 2006

Foreign debt of Azerbaijan totals over $1.5 billion

05-10-2006 Regnum - On April 1, 2006 whole Azerbaijan’s foreign debt totaled $1.741 billions. Share of foreign obligations totals 11% of expected 2006 GDP. Foreign debt per capita totals $207. In accordance with signed credit agreements, foreign debt guaranteed by government totaled $3.517 billions on April 1. The country’s foreign debt increased by $90 millions in connection with usage of credits to realize project of Sumgait combined-cycle plant’s construction ($47 millions), first tranche of World Bank loan to reduce poverty (about $20 millions), and financing of other projects during first quarter. Over an accounting period payments for borrowed credits totaled $33 millions, $26 millions of which are repaid from main loan debt, and $7 millions — for interest. Repaying from budget funds totaled $3.3 millions, the Azerbaijani Finance Ministry informs.

Foreign companies invest $1bn in field exploration in Azerbaijan

10/05/2006 09:07 Trend - So far the foreign companies involved in the exploration operations in Azerbaijan invested approximately $1bn. The work enabled Azerbaijan to obtain important data on the field and reserves, as well as other important data, Khoshbakht Yusifzade, the First Vice President of the State Oil Company of Azerbaijan (SOCAR), told Trend. The majority of the exploration work fell on the company’s own risks. It is explained with their conduct in unexplored field and blocs. In general the foreign companies, active in the Azerbaijani section of the Caspian, drilled 48 exploration wells. As a result of exploration work done thus far, the reserves if the ACG grew considerably. Though during the signing of an agreement in 1994 the reserves were estimated to 500 million tons of oil, at the figure reaches 900 million tons.

BP to load first BTC crude cargo end May

09 May 2006 [20:23] - Today.Az - Oil major BP will load the first cargo of Azeri crude from its $4 billion BTC pipeline in Turkey at the end of May, trade sources said on Tuesday. The giant 1,770 km pipeline will carry Caspian oil to the west, sidestepping Russia and loosening its stranglehold on exports from the region. The new flow is also expected to lower western dependency on Middle East oil, Reuters reports. Azeri crude will also help meet global refinery demand for sweeter, lighter feedstocks that are relatively easy to process to make gasoline and diesel. BP expects the pipeline's capacity to reach a million barrels per day (bpd) by 2008. The route bypasses the shipping bottlenecks from the Black Sea to the Mediterranean at the Turkish straits. During the winter, crude shipments through the straits can be held up for weeks. BP is set to load the first shipment of Azeri from Ceyhan on May 27-29. The cargo is a trial cargo and no more have yet been scheduled, traders said. "They will be testing the installations and equipment with this cargo," said one. "We will find out in the next few days if there are going to be exports from the pipeline in June." A BP spokesman said on Tuesday that the company had no fresh information to add to a previous statement when it said it expected the first cargo to load in early summer. The pipeline has almost been filled to its 10.4 million barrels capacity, traders said. The first cargo is likely to be a mix of some crude that has come through the pipeline and oil that had been shipped from the Black Sea port of Supsa to help speed the process of filling the storage at Ceyhan, traders said. There are seven storage tanks with capacity of a million barrels capacity each at Ceyhan. Azerbaijan has to date exported its crude through a 150,000 barrels per day pipeline to the Black Sea port of Supsa, in railcars to the Black Sea port of Batumi, or in pipelines through Russia. The differential for Azeri crude has slipped in the past two months, in part as the market prepares for increased export volumes, traders said. Azeri oil was pegged at around a dollar below the North Sea sweet crude benchmark BFO on Monday. On March 9, the grade traded at dated BFO plus $1.25. BP's partners in BTC are Azerbaijan's state oil firm SOCAR, Chevron Corp, Norway's Statoil , Italy's ENI , France's Total , Japan's Itochu and INPEX, ConocoPhillips and Amerada Hess.

Saturday, May 06, 2006

Iran makes its weight felt in Azerbaijan

05-06-2006 Kuwait Times -AP By Kathy Gannon - After the Soviet Union collapsed and Azerbaijan went free, the oil-rich country was caught in a tug-of-war for influence between the secular, democratic West and Islamic Iran. Iran sent in preachers, built mosques and gave scholarships to the poor. But Azerbaijan turned West. Nowadays, however, the early rumblings of political Islam are being heard in the world's biggest Shiite Muslim republic outside Iran, aroused by frustration with rampant corruption, intractable poverty, and a sense that for the sake of oil, the Western democracies have chosen to ignore the taint of corruption in its elections. There are many signs that neighbouring Iran is capitalising on the discontent with a "we-told-you-so" message and winning some support in its confrontation with the West over its nuclear programme.
Ilham Aliyev, who took over as president from his dying father in 2003 in an election challenged by claims of widespread fraud, visited the White House last week, underscoring his friendship with the administration of US President George W. Bush. But many in Azerbaijan are wondering how long his overwhelmingly Muslim nation of 9 million people will stay in the US orbit. "Azerbaijan will not become an Islamic country overnight, but the beginnings are here," said Arif Yunusov, author of "Islam in Azerbaijan" and chairman of the Institute of Peace and Democracy, an independent think tank in the capital, Baku. "People today in Azerbaijan don't believe America. People believe that the West does not want democracy in our country, it just wants our oil." Whether an Islamic surge is coming is open to question. Azerbaijan also has a strong Western-oriented camp, yearning for Europe's model of good governance and civil rights. In the cosmopolitan capital, the overwhelming affinity is with Europe, though attendance at mosque prayers is growing steadily, and human rights workers say they were surprised at how many young Azeris joined the demonstrations that swept the Muslim world over the publication of Danish cartoons featuring Prophet Muhammad (PBUH). In the more conservative southern regions that border Iran, the return to Islamic roots is more noticeable. Azerbaijan is a "very complex country," says Fariz Ismailzade, a political science professor in Baku. "We have modern girls, but still there is a rise in Islamic fundamentalism. It is slow but it is happening." Secular opposition politician Eldar Namazov, says Azerbaijans are "the most European of people in the Islamic world, even more than Turkey. Yet I think you can say today that we see some Islamic renaissance and the ground is ready for an Islamic revival here in Azerbaijan.... "Our society wants political change, but year after year people are disappointed with democracy." More than a decade after signing a multibillion dollar oil deal with a US- and British-dominated consortium, most of the country remains miserably underdeveloped. Nearly half of the population earns less than US$1,000 a year. Unemployment hovers around 20 percent. Azerbaijan anticipates oil revenues of US$160bn by 2025, and a US$4bn, 1,750-km pipeline is pumping Caspian Sea oil from Baku through Georgia to the Turkish Mediterranean port of Ceyhan. Yet outside Baku, gas supplies are erratic and the country runs on dilapidated Soviet-era infrastructure. All this, say critics, adds up to a new opening for Iran, the Shiite giant to the south. "Iran has always been active in Azerbaijan, but before they weren't getting the results they wanted," researcher Yunusov said. That's changing, however. "Now people think that Iran's words make sense, that the claims by Iran against the war in Iraq and against America are not so bad, that the West just wants our resources." Iran is reported to be financing Azerbaijan's opposition Islamic Party. Among Azerbaijan refugees from the 1990s war with Armenia over the enclave of Nagorno-Karabakh, Iran is the biggest provider of humanitarian aid, and it gains points from a perception among refugees that Azerbaijan was betrayed from all sides during the war and that the West has forgotten the refugees. Iranian television and radio, broadcasting in the Azeri language, are the leading sources of information in this border town of Astara and elsewhere in southern Azerbaijan. Azeri-language talk shows based in the nearby Iranian city of Tabriz are clogged with callers from Azerbaijan. "Everything we want to find out we find out from Iranian radio," said Mammadov Mazjtajab, a former reporter with Radio Liberty in Astara. Broadcast propaganda has increased, much of it directed at the United States, he said. Mazjtajab said propaganda has increased noticeably during the nuclear standoff. Tehran has threatened to strike back at any country that cooperates with an attack on its nuclear facilities. The Azerbaijan government has pledged its territory won't be used for military action against Iran, but people living along the border are nervous, pointing to a US-built radar facility just outside Astara and the upgrading of the airport at Nakhchewan, also on the border with Iran, to accommodate Nato jets. Both projects are US-financed. Iran's perceived attractions come out in an encounter at the border with Jamilya Shafyeov, an Azeri woman wearing three sweaters against the cold and bemoaning her inability to find work. "I think things are so much better over there," she said, gesturing through a small grey-coloured steel gate that opened onto Iran. "What do we have here? Nothing. No jobs. If I had a passport I would go there." Nail Farziyev, a retailer in Astara, drew cheers from fellow shopkeepers when he declared: "We can't turn our back on Iran and we won't turn our back on them." "Why is it that America thinks it can impose its will on everyone?" he asked. "Why can't Iran have peaceful nuclear energy? I want to know why." In Baku, nearly 240 km to the north, Yunusov's think tank is sampling opinion nationally and discovering similar sentiments. In a survey he did three years ago, he said, "I asked about Iraq and Afghanistan and then everyone supported the United States and everyone agreed that (Osama) bin Laden was behind the Sept 11 attacks." But in a new survey he is conducting with the University of Minnesota's Department of Political Science, he asked about bin Laden and 9/11 and "it is all changed now. Some even say maybe the United States planned the attacks themselves in order to go after Muslim countries to get their oil." In Nadaran, about 65 km from the starting point of a pipeline regarded as an engineering marvel, Hajji Vagif Gasimov hunkered down in a municipal office with bitterly cold wind whistling through broken windowpanes. "Our situation is getting worse from day to day," he said. "My father was an oil worker, my grandfather was an oil worker. We are surrounded by gas pipelines and we have no gas. We think that this is America's fault because they want all our resources." In the 1990s, he said, "my dream was to have a democracy like the United States. Now we don't say we are against democracy; we are against America's democracy now." No one thinks an Islamic takeover is imminent. The Turkish Foreign Ministry says it welcomes good relations between Azerbaijan and Iran. Azerbaijan is one-twentieth the size of Iran, but some Turkish experts think that given the large ethnic Azeri population in Iran, Baku may have more influence over its neighbour than vice versa. "There are plenty of reports that Iran has helped encourage greater religious devotion," said Bulent Aliriza, a Turkish analyst with the Washington-based Centre for Strategic and International Studies. "The failure of the secular opposition to the Aliev regime ... has allowed the development of a religiously inclined opposition. But I think for the moment it is manageable. The question is what will happen if there is a confrontation between Iran and the West. This will make life very difficult for Azerbaijan." Rafik Aliyev, a government official charged with managing religious harmony in the country, said the corruption claims were exaggerated and he saw no big protest vote for Islamic parties. He saw Iran's influence as both natural and worrying - an open border, propaganda broadcasts, Azeri students being educated in Iran; "Of course all these things can increase religious sentiments and we have been thinking about these issues and taking some measures." These, he said, include a countrywide refurbishment of infrastructure that has increased electrical supply to the south, and the establishment of Islamic teaching institutions to propagate a moderate brand of Islam. Namazov, the secular politician who was a powerful aide to Azerbaijan's late President Aliyev, said the Islamic Party made gains in his Baku constituency in the disputed November parliamentary election, while secular opposition parties won only a handful of seats. He says that when he met with European and American ambassadors afterward he told them: "It is true there is no danger today of there being an Islamic government here, but in five years, if we still have this system of total corruption, unemployment and severe human rights violations, then Islamic representatives will be elected." -- AP

Zakir Garalov - Ex-Azerbaijani ministers' role in coup attempt confirmed

06 May 2006 [12:50] - Today.Az –  The investigation has proved the involvement of former Azeri ministers Ali Insanov and Farkhad Aliyev and ex-presidential property manager Akif Muradverdiyev in a coup attempt, Prosecutor General Zakir Garalov told journalists on Friday. "The involvement [of Insanov, Aliyev and Muradverdiyev] in a coup attempt has been confirmed. Moreover, multiple instances of corruption have been exposed in these ministries," he said, Interfax-Azerbaijan reports.

Tuesday, May 02, 2006

SOCAR to step up exploration in Caspian

02/05/2006 00:31 AssA-Irada - Baku - Azerbaijan has been paying special attention to exploration operations in the Caspian Sea of late and 48 offshore exploration wells have been drilled over last several years alone, First Vice President of SOCAR Khoshbakht Yusifzada has said Yusifzada said that as a result of this exploration, confirmed reserves of the fields being jointly developed with foreign companies have increased from 500 to 900 million tons. According to the first vice president, this is tantamount to the discovery of eight major fields. He noted that foreign companies operating in Azerbaijan had invested $1 billion in exploration operations over the past several years. Yusifzada pledged that exploration operations would be continued in the Caspian in 2006. He indicated that SOCAR had plans to start the development of several prospects on its own this year, adding that the company intended to independently engage in exploration operations on Babek, Ashrafi and Garadagh fields. "In order to improve our financial performance, we have to be able to do some of the work ourselves. We would like to install a SOCAR platform either on Garadagh or Ashrafi," he said. When asked by journalists, Yusifzada said the existing reserves would last Azerbaijan for 50-60 years, but further exploration could double the figure. The SOCAR official said the company intended to increase gas production this year. He said that by conducting some upgrade work on Gunashli, which is part of the country's major Azeri-Chirag-Gunashli (ACG) offshore fields, the company wants to produce an additional 1-1.5 billion cubic meters of gas.

Azerbaijan on the West's new frontier of energy security

May 01, 2006 The Jamestown Foundation - Erasia Daily Monitor - By Vladimir Socor -
Azerbaijani President Ilham Aliyev's April 24-28 visit to Washington spotlighted the urgency of opening direct Western access to eastern Caspian oil and gas reserves. U.S. policy seems, however tentatively, to move in that direction; the European Union is only beginning to consider the issue; and both are moving too slowly to win. With the imminent completion of the Baku-Tbilisi-Ceyhan oil pipeline and the parallel line for gas, Azerbaijan's role in the world of energy and geopolitics is set for a qualitative change: From regional projects to projects of global significance, and from a primary role as energy producer to a primary role as energy transit country. This change turns the Western-oriented Azerbaijan into a major factor in Euro-Atlantic energy security. In this regard, Azerbaijan's location has already become a more valuable asset than the country's own reserves; and the value of its location is set to increase from this point on, amid a rapidly intensifying contest over direct access to energy reserves. Prior to reaching this qualitative threshold, Azerbaijan had already crossed another threshold: No longer simply a consumer of security, it became also a provider of security within the region and farther afield, by deploying troops with U.S. and NATO forces in the Balkans, Afghanistan, and Iraq; providing crucial transit passage to American and allied forces operating in Afghanistan and Central Asia; and successfully containing the radical Islamist challenges to modernization of the country and the region. Its potential for energy transit can further enhance Azerbaijan's role as a security provider: Functionally, by adding a decisive dimension of energy security; and geographically, by turning Azerbaijan, alongside Georgia, into a key factor of energy security for a Europe that now faces an overdependence on politically risky Russian supplies. Europe's energy security is a prerequisite to transatlantic political solidarity and NATO cohesion. The eastern Caspian basin is key to that security through supply diversification. Azerbaijan and Georgia provide the only existing westward transit option for oil and gas from Kazakhstan and Turkmenistan. The Azerbaijani government has taken the lead by upholding the right of Caspian countries to make sovereign decisions about laying pipelines in their respective seabed sectors, despite Russian and Iranian opposition. Similarly, Azerbaijan is currently spearheading initiatives on trans-Caspian cooperation in oil and gas transportation westward. This role, however, cannot for long substitute -- and certainly can not effectively substitute -- for the leadership that the United States had earlier exercised in this regard, and from which it seems to have stepped back. Aliyev's Washington visit could have provided the opportunity for a reaffirmation of U.S. leadership in that regard. A joint political statement at the presidential level, announcing U.S. support for trans-Caspian energy projects, could have been the vehicle for such reaffirmation. This opportunity was passed up, however. The U.S. side considered issuing such a statement but decided against it at the last moment. This decision seems to reflect a lack of clarity in U.S. policy on Caspian energy issues generally. It apparently also reflects an underestimation of the risks that Azerbaijan must face from Russia and Iran as a result of Baku's energy transit initiatives that answer to Western interests. Back in 1997, then-Presidents Bill Clinton and Heydar Aliyev signed a joint political statement in Washington, and in 1999 Clinton signed a common declaration with the presidents of Turkey, Georgia, Azerbaijan, Turkmenistan, and Kazakhstan on Caspian energy development and transit. Those and similar political documents signaled U.S. commitment at the international level to friend and potential foe alike as well as domestically to the U.S. government agencies, lending institutions, and private energy companies. Thus, the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum projects were set on track at that time. Those two pipelines in the western Caspian basin form parts of the planned East-West Energy Corridor, which the United States led in promoting during 1995-2001. That corridor's larger components, however, are the unfulfilled trans-Caspian projects from the eastern shore. Paradoxically, the U.S. commitment to trans-Caspian pipelines petered out in the wake of 9/11, instead of redoubling. Those projects' importance is ever-greater in today's global energy context of growing scarcity and insecurity than it was in the benign pre-9/11 environment and before the Kremlin had turned monopolization of transit and markets into strategic policy tools. To help reactivate those projects, the United States needs to begin by issuing the indispensable political signal to Caspian countries, energy companies, and investment capital markets. It also should reinstate the abolished position of Caspian energy policy coordinator, which proved its value in streamlining regional, European, and U.S. efforts at the government and private-sector level to complete the Energy Corridor's western components. On a parallel track, Washington needs to show no less political commitment to Azerbaijan's security than it does to neighboring Georgia's. The two countries' security is indivisible, as they function in tandem in providing the unique transit linchpin. Aliyev's visit helped refocus Washington's attention on those necessary steps to reinstate the trans-Caspian projects high on the list of U.S. energy policy priorities.

Two additional oil-wells are expected to be drilled in "Guneshli"

02 May 2006 [09:35] - Today.Az - Representatives of State Oil Company (SOC) have visited oil-production platform No.19 in "Guneshli". According to APA, the purpose of their visit was the discussion on drilling 2 additional wells not planned in prior project. 8 oil-wells were planned to be drilled in platform used since 2001. Highly-productive 7 oil-wells have been put into operation lately, producing 1470 ton quality oil totally a day. The last, 8th layer is now being operated for gas production. Fields will be constructed for drilling additional oil-wells and other necessary facilities as soon as constructors get familiar with the project.

Monday, May 01, 2006

25 million tonnes of Kazakh oil per annum to be pumped via BTC

02.05.2006 Kazakhstan today - BAKU -  The agreement on the transportation of Kazakh oil via the Baku-Tbilisi-Ceyhan (BTC) pipeline between Kazakhstan and Azerbaijan provides transportation of 25 million tonnes of Kazakh oil per annum, Abbas Abbasov, Vice Premier of Azerbaijan, told journalists, Kazakhstan Today correspondent reports. "The intergovernmental agreement between Kazakhstan and Azerbaijan transportation of 25 million tonnes of Kazakh oil per annum via the Baku-Tbilisi-Ceyhan (BTC) pipeline is at the completing stage. The working groups need not more than 10 days for it, and the Agreement is going to be ready by mid-May so that it could be presented for inking by the Presidents of Kazakhstan and Azerbaijan." According to Mr. Abbasov, this intergovernmental agreement is very important for the economy of Azerbaijan and for the relationship between Kazakhstan and Azerbaijan. "This document confirms bilateral strategic positions between Kazakhstan and Azerbaijan. Besides, the transit of Kazakhstani oil through the territory of Azerbaijan will provide us with additional financial incomes, which can guarantee the socioeconomic situation of our population," - Mr. Abbasov said. A regular meeting of the intergovernmental working group took place May 1. The length of BTC pipeline is 1,767 km, of which - 443 km are in Azerbaijan, in Georgia - 248 km, in Turkey - 1,076 km. The pipeline capacity is 50 million tons of oil per annum. The construction works started in April 2003. The talks between the SOCAR and "KazMunaiGaz" NC" JSC on Kazakhstan accession to the BTC started in November, 2002. The intergovernmental agreement between Azerbaijan and Kazakhstan creates a new Aktau-Baku system for the transportation of Kazakhstani oil by the BTC pipeline. The capacity of the transferring system will be 20 million tons of oil per annum, up to 7.5 million tons will be transported during the first phase. The participants of BTC project are the following: BP (30.1 %); SOCAR (25.00 %); Unocal (8.90 %); Statoil (8.71 %); TPAO (6.53 %); ENI (5.00 %); Itochu (3.40 %); ConocoPhillips (2.50 %); INPEX (2.50 %), Total (5.00 %), and Amerada Hess (2.36 %). ENI, ConocoPhillips, Inpex, and Total also participate in Kashagan field development.

A Big Ally in a Tiny Country - U.S. News

01 May 2006 [10:01] -U.S. News & World Report - By Bay Fang President's Aliyev interview to U.S. News & World Report edition.
The President of Azerbaijan, Ilham Aliyev, had a lot to discuss with President Bush last week. Not only does the small Muslim nation occupy a strategic location between Russia and Iran at a time when tension between the United States and Iran is high, but it is also on the verge of a huge oil boom. This summer, a 1,000-mile pipeline originating in Azerbaijan will begin pumping oil across three countries to a Turkish port on the Mediterranean Sea. Aliyev spoke to U.S. News about these developments and about how he hopes Washington will help resolve the country's decade-long conflict with Armenia.

How will the completion of the Baku-Tbilisi-Ceyhan pipeline affect world oil and gas markets? This pipeline means we will be able to produce more oil and deliver it to world markets. When we started building it five or six years ago, oil prices were not as high as they are today. Now, it becomes more and more important for the world's energy security. It is a new route that will deliver oil from the Caspian to the Mediterranean, which has never existed before.

Is it possible to quantify the effect on the markets? The pipeline will transport at least 1 million barrels of oil a day in 2008. In the future, the pipeline's capacity can be expanded; it will depend on the level of production. It has huge potential.

How do you avoid what some people call the "oil curse"? We are very determined to use oil wealth to develop a strong economy, and not to depend on oil and oil prices in the future. To achieve that, we need to have a high degree of transparency in accumulating and spending oil wealth. Azerbaijan is a leading country in the Extractive Industries Transparency Initiative, which has a main goal of having transparent accounting.

How does Azerbaijan see itself developing as a secular democracy? As a secular state with a predominantly Shiite population, can it be a model for Iran? What we do and what we plan is not aimed at being used as an example. It is just for the sake of the people of Azerbaijan, for the development of our country. We are secular not only by constitution but by our lifestyle. It is a very good example of how representatives of various nations and allegiances can live together in peace and autonomy. We have a predominantly Muslim population, but at the same time we have substantial Christian and Jewish communities.

What other democratic reforms are coming up? Azerbaijan over the last five years has adjusted most of its legislation to the standards of European countries. All of the basic political freedoms are available; political institutions are becoming stronger. At the same time, they should be accompanied by strong economic reform. When people are poor, they think not about democratic development but about day-to-day needs. Last year we had a GDP growth of 26 percent, the highest in the world.

Was the GDP growth mostly in the oil sector? It was 12 percent in the non-oil sector, 14 percent in the oil sector. We are trying now to diversify the economy. Oil will come to an end sooner or later, so the country's long-term development should not depend on oil.

You have said that the United States' standoff with Iran should be resolved diplomatically. But if the United States decides to react militarily to Iran, what will Azerbaijan's reaction be? We still hope that it will be resolved in a diplomatic way. The other option may lead to catastrophe in the region and may damage all the positive trends and prospects for cooperation and development. Azerbaijan, for more than a decade, has had part of its territory under Armenian occupation. And all of the advice in the West is to resolve it peacefully, despite the fact that 10 years of negotiations led to no results. Therefore, we also think that in this case a peaceful solution, patience, diplomatic efforts should be tried until the very possible end.

Do you have high hopes for the resolution of the Nagorno Karabakh conflict? On the one hand, we've been in a cease-fire regime for 12 years. Despite various periods of negotiation, no result. That does not add optimism. But on the other hand, the latest activity of mediators, including the U.S. and Russia, creates hopes. But to resolve it, both sides need to stick to international law and principles: Occupied territories of Azerbaijan should be returned without any preconditions. And the millions of Azerbaijanis who suffered from the policy of ethnic cleansing by the Armenian government have the right to return to their homeland.

How will Azerbaijan's role in the war on terrorism change because of the U.S. loss of the K2 air base in Uzbekistan last year? We joined the antiterror operation as soon as the United States invited allies to join. We are still committed to the partnership. We have our soldiers serving alongside U.S. soldiers in Kosovo, Iraq, and Afghanistan. This policy has not changed at all. The role of Azerbaijan as the United States' ally in the region is significant, and the significance of this role may change due to circumstances that develop, but our policy is not changed based on it.

SOCAR calls sixth 2006 Azeri Light tender

BAKU. April 28 (Interfax) - The State Oil Company of the Azerbaijani Republic (SOCAR) announced a tender for the sixth consignment of Azeri Light crude oil produced at Azerbaijan's Azeri- Chirag-Gunashli (ACG) fields this year, a source at SOCAR told Interfax. The consignment of 1 million barrels will be shipped from the port of Supsa on May 27-28. Select Energy bought this year's first three consignments and Vitol bought the fourth and fifth. Azeri Light was bought last year by Glencore, Arcadia, UniPetrol, Total, R-Trading, Select Energy, Tupras, and BP. Fourteen consignments were sold last year in total. SOCAR has a 10% interest in the ACG project. Profitable oil is distributed among shareholders in proportion to their participation in the project. Participants in the Azeri-Chirag-Gunashli contract currently include British Petroleum - 34.1367%, the U.S. companies Unocal - 10.2814%, ExxonMobil - 8.0006%, Devon Energy - 5.6262%, and Amerada Hess -2.7%, Japan's INPEX Corp - 10% and ITOCHU Oil - 3.9205%, Norway's Statoil - 8.5633%, and Turkey's TPAO - 6.75%.

SOCAR to invest $300 mln in 2006

SOCARBAKU. April 28 (Interfax-Azerbaijan) - The State Oil Company of Azerbaijan (SOCAR) plans capital investment of $300 million in 2006, SOCAR Vice President Shakhin Mustafaev said at a press conference Friday. "SOCAR plans to launch new production platforms at the Neftianye Kamni (Oil Stones) and Gunashli fields. The launch of platforms No. 2387 and No. 1887 for Neftianye Kamni is planned for October and November 2006, respectively. Oil production at these platforms alone will increase by 1 million tonnes," SOCAR First Vice President Khoshbakht Yusifzade said. The company also plans to expand platform No. 11 at the shallow section of the Gunashli field in 2006. "As a result, production at the field will increase 50% from the current 2.4 billion cubic meters of gas per year," Yusifzade said. SOCAR is drilling new wells at the Gunashli, Neftianye Kamni, Govsany, Pirallakhy, Gum Adasy, Balakhany, Bibi-Eybat and Buzovny fields. "From the beginning of the year, 38,939 meters have been drilled, with 12,264 meters drilled in April alone, instead of the planned 9,369 meters," Yusifzade said.

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