Baku News

28 November 2006 - Gazeta.Kz - A Kazakh Caspian oil transportation system is planned to be formed by 2010. The total value of the project is approximately $1 billion 600 million. Mahambet Batyrbayev, Vice President of JSC "NC "KazMunaiGaz", Director of KMG Office for Western Region, has stated this at the I Caspian Investment Forum. According to him, the system will include a pipeline Iskene-Kuryk with an oil terminal, transportation by tankers through the Caspian Sea to Baku and further - via the pipeline Baku-Tbilisi-Ceyhan. "This system will allow to transport annually 25 million tonnes from Kuryk port at the first phase with a following increase to 38 million tonnes per annum," he has stressed, Kazakhstan Today correspondent reports. He has also observed that around $700 million will be invested into construction of a terminal in Kuryk port. Around $400 million will be invested into the construction of tankers. Also it is planned to build up a terminal on the territory of Azerbaijan. Its value is going to amount to $570 million.

27 November 2006 - Turan News - Exxon Mobil has informed SOCAR it will cancel Exxon Azerbaijan Operating Company on Dec. 19, 2006. The Baku office of Exxon Exploration and Production Azerbaijan Ltd will be canceled too. The Baku branches of Mobil Assent Investments Limited and Exxon Exploration and Production Caspian Sea Limited closed down on Nov. 22, 2006. Exxon Mobil joined Azerbaijan's oil and gas projects in 1995, but has not succeeded. It did not join the Century's Contract on time and then signed the following five contracts over oil exploration in Azerbaijan's Caspian Sea Sector: the Oguz Field - on Aug. 1, 1997 (50%), the Nakhchivan Field - on the same day (50%), Araz-Alov-Sharg - on July 21 (15%), Zafar-Mashal - on Apr. 1999 (30%), and Lerik Deniz - on the same day (30%). However, the Azerbaijani Parliament has never ratified Lerik Deniz, because the contractual area is argued between Azerbaijan and Iran, and this problem could only be solved by deciding about the Caspian Sea's status. Exxon Mobil decided not to participate in financing the Baku-Tbilisi-Ceyhan (BTC) project in 2002-2003, which was a mistake, because the company lost an opportunity of having its oil transported at preferential tariffs (the preference only regarding the BTC Co. shareholders). Then it had to sign a five-year contract with Azpetrol Holding to have its oil exported by the Baku-Batumi railway in Feb. 2005. Exxon Mobil had to stop the Oguz oilfield project in the Azerbaijani deepwater Caspian Sea area in Nov. 2003, because the drilling had not proved any profitable resources. The same happened in Nakhchivan and Zafar. The company had to pay considerable indemnities to SOCAR for the early cancellation of the projects. The Araz-Alov-Sharg project was also suspended in July 2001 because of the arguments between Azerbaijan and Iran. This problem also requires a decision about the Caspian Sea's status. Despite its unsuccessful oil exploration, Exxon Mobil has provided humanitarian aid to Azerbaijani internally displaced persons and has conducted considerable humanitarian projects in education (published mini encyclopedias in Azeri).

25 November 2006 - Azerbaijani Press Agency - SOCAR Marketing and Economic Operations Department has announced a tender for export of 1 700 000 metric tons of REBCO crude oil from Novorossiysk Port. The bid opening will be held on November 30.

MOSCOW, November 22 (RIA Novosti) - Gazprom [RTS: GAZP], Russia's energy giant, said Wednesday it intended to reduce natural gas exports to Azerbaijan in 2007 by 66.7%, to 1.5 billion cubic meters, against 4.5 billion cubic meters in 2006. "Gazprom intends to reduce next year the volume of natural gas deliveries to Azerbaijan to 1.5 billion cubic meters," Sergei Kupriyanov, a spokesman for Gazprom, said. "This volume will fully meet Azerbaijan's demand for imported natural gas, taking into account the price increase for Russian natural gas imports and the natural gas production increase in Azerbaijan," he said. Azerbaijan has been in talks on deliveries of natural gas to Georgia, which last week rejected purchases of Russian gas due to the price increase. "Azerbaijan is preparing to export its own natural gas," Kupriyanov said. "We are not against competition, but it is not expedient for Gazprom to support it [the competition] at the expense of its own resources." According to agreements between Georgia and Gazprom, the gas price in 2006 was $110 per 1,000 cubic meters. Gazprom recently suggested that Georgia pay $230 per 1,000 cubic meters of Russian natural gas as of 2007. The Georgian leader said the price hike for Russian natural gas was politically motivated and that the move amounts to an economic blockade of Georgia, which now buys all of its gas from Gazprom. A Georgian energy official said November 2 that his country is in talks with a consortium that is developing a gas field in Azerbaijan to ensure alternative gas deliveries, and that buying gas from Iran and Azerbaijan is being considered.

24 November 2006 - The New Anatolian - SOCAR is ready to use inability of the BOTAS, the state oil&natural gas pipelines and natural gas imports company, to receive gas from Shakh-Deniz gas deposit by the fixed date. According to SOCAR President Rovnag Abdullayev, Azerbaijan is ready to increase gas purchasing from Shakh-Deniz gas deposit by the whole amount of the Turkish company's planned share (1.5bln cubic meters). "Receiving gas from Shakh-Deniz will strengthen the country's positions at talks on gas supply with Russia's Gazprom. If inadequate gas price will be requested, gas import from Russia may be reduced up to its complete ceasing," Abdullayev said. Azerbaijan and Russia have reached no consensus yet on the price of 1,000 cubic meters of gas. Gas will be supplied at the price of $110 in 2006; however, Russia has already informed Georgia on the price of $230 for 2007. Although, there is no information about price for Azerbaijan, the country is ready to reduce its imports form Russia." According to Fineko Information Agency, energy balance without taking into consideration import from Russia is calculated at Azeri government. Shakh-Deniz will not be able to cover the loss in imports (4.5bln of cubic meters); however, the country has reserves of fuel saving particularly in increasing collection and decreasing technical losses," it was said at the government. According to evaluations of Deloitte consulting company, technical losses of gas amount to 40% only in Baku. Azerbaijani annual needs for gas are estimated as 12-15bln of cubic meters. The country will be able to receive 400-800mln cubic meters in 2006-2007 from Shakh-Deniz.

22 November 2006 - Today.Az - SOCAR plans to improve the oil-polluted territories in Absheron peninsula within a few years, Company President Rovnag Abdullayev said. "We have devised a program for purification of the oil-polluted lands, and set up an emergency ecological department. We declared 2007 a year of ecology in SOCAR," he said. He said that they will remove people who bought lands in the territory of the Company, APA reports. "All houses illegally built near oil mines and wells will be demolished. No damages will be paid. They built these houses illegally and they have no legal documents," he underscored.

21 November 2006 - AME Info - The President of Azerbaijan, Ilham Aliyev, along with a high profile trade delegation from his country, visited the Jebel Ali Free Zone today, and was received by the Chairman of Dubai World, Sultan Ahmed Bin Sulayem. The talks were attended by Jamal Majid Bin Thaniah, Group CEO, Dubai World, Salma Hareb, CEO, Jafza and Economic Zones World, and Mohamed Al Moalem, Managing Director, DP World along with other senior officials. President Aliyev was briefed on Dubai World's plans for expansion along with the development of existing projects. President Aliyev was also shown a video presentation on Nakheel's upcoming projects before a tour of the ports area in Jebel Ali. Mr Bin Sulayem, spoke of the excellent ties between Azerbaijan and the United Arab Emirates, including increasing bilateral trade: 'We are extremely pleased to welcome our esteemed guests to Dubai and would like to reiterate our commitment towards forging greater economic ties between the two countries. Dubai and Azerbaijan share similar values in terms of work ethos and we are actively looking at expanding our investment base in the country. Under a visionary leadership, Dubai has been able to benefit from world-class projects such as the three Palm islands, Dubai Waterfront project and a host of other exciting developments.' The UAE and the Republic of Azerbaijan signed 11 agreements in Abu Dhabi this week covering cooperation in the fields of economy, legal affairs, military, health, education and sports. Jafza offers a range of advantages to companies establishing operations in the free zone, such as a business environment free from red tape, no duties on all import and export goods and machineries, modern communication facilities and excellent support services. More than 5,500 companies from over 120 countries, including about 140 Fortune 500 companies, have set up facilities at Jafza.

20 November 2006 - Today.Az - The Sahdeniz Project, which makes it possible to purchase cheap natural gas at $120 a cubic meter from Azerbaijan, has been hindered by Russia. Moscow has threatened Azerbaijan into not lowering the price of natural gas it sells to Turkey. Tired of Moscow's pressure, Baku has offered state-owned Turkish Pipeline Company (BOTAS) to postpone the project for one year. Russia is trying to hinder the Sahdeniz Project after the Baku-Tblisi-Ceyhan Oil Pipeline project. After the Sahdenis Project, which is considered to be the second-biggest investment in the energy field, becomes active, Turkey will be able to buy cheap natural gas at $120 per cubic meter. Since this project will provide natural gas at half the price offered by Russia and Iran, Azerbaijan's hand will be strengthened at the bargaining table. Moscow reportedly told Baku, "If you sell Turkey the natural gas that I give at $120, we will increase the price to $230." This threat has been influential on Azerbaijan, according to some circles. According to BOTAS officials, Azerbaijan asked for postponement of 2007 natural gas agreement for a year due to pressure from Moscow. Azerbaijan offered to sell three billion cubic meters of natural gas to Turkey at the same price in 2008 and 2009. Turkey, which does not want to experience another gas crisis, does not want to take a backward step in the Sahdeniz Project since it wants to maintain product diversity and decrease prices.

21 November 2006 - Upstream onLine - Russian gas monopoly Gazprom has told Azerbaijan it may cut by two thirds the volume of natural gas exports to the ex-Soviet republic, the head of Azerbaijan's state oil company said today. The reduction would mean Azerbaijan would have no spare fuel to sell to neighbouring Georgia, which faces having its Russian gas supplies cut off, state oil company President Rovnag Abdullayev told the ATV television station. "We had an agreement with the Russian Federation for 2007 for 4.5 billion cubic metres, but they have informed us of the possibility of giving us 1.5 billion cubic metres of gas," Abdullayev told the station, Reuters reported. He said with Russian imports at that level the country could meet its own needs from domestic sources, including the new BP and Statoil-led Shakh Deniz field, which is now coming on stream. But Abdullayev said: "In that, case we would not be able to give Georgia additional volumes from Shakh Deniz." He did not give a reason for the possible reduction. Gazprom could not immediately be reached for comment. The Russian giant has been negotiating with Azerbaijan and other ex-Soviet republics to bring the price they pay for Russian gas nearer to European prices. Gazprom has told Georgia it will cut off gas supplies if a new supply contract is not agreed for 2007. The Russian monopoly says it wants Tbilisi to pay $230 per 1,000 cubic metres instead of the $110 it pays now. Gazprom says the proposed increase is commercial but Georgian ministers have linked it to a bitter political row with Moscow, which accuses Georgia's pro-Western government of being unfriendly towards Russia. Tbilisi has been urgently casting around for alternative gas supplies and was eyeing Shakh Deniz as one of the most promising sources. Local media have speculated that Moscow may pressure Azerbaijan to prevent it baling out Georgia with extra gas.

21.11.2006 - Trend - by A.Mammadova - Signing the intergovernmental agreement in Abu Dhabi on economical, commercial and technical co-operation will strengthen the trade turnover between Azerbaijan and United Arab Emirates (UAE), the UAE Minister of Economy, Sheikha Lubna Al Qassimi, briefed the media in Abu Dhabi, Trend reports. Responding to the question “why did UAE select Azerbaijan for signing this agreement?”, Al Qassimi replied that “Firstly Azerbaijan is a Muslim country. In addition to its strategic location, Azerbaijan is an oil-producing country and may serve as catalyst to strengthen the export and re-export of the UAE oil to Eastern Europe”. Eleven bilateral documents were signed within the official visit to the UAE of the Azerbaijan President, Ilham Aliyev on 20-21 November.

21/11/2006 Gulf News - by AhmEd A. Elewa - Abu Dhabi: The UAE and the Republic of Azerbaijan signed 11 agreements in the capital yesterday, pertaining to cooperation in the fields of economy, legal, military, health, education and sports. "The trade balance between the two countries is in the vicinity of Dh700 million, and we seek to push that figure further," said Shaikha Lubna Al Qasimi, UAE Minister of Economy, before signing two agreements with the Azerbaijani minister of economic development, Haider Babayev. The ministers signed an agreement for encouragement and protection of business and investment, and another for cooperation in the fields of economy and trade. A third agreement was also signed yesterday by the Azerbaijani minister of foreign affairs related to avoiding double taxation. "Azerbaijan is an Islamic country, and it occupies a strategic location in central Asia. It is also a major oil producer. Accordingly, the UAE is capitalising on these factors to further enhance bilateral relations," Shaikha Lubna added, explaining that the trade balance is in favour of the UAE given the huge re-export capabilities the country enjoys. "UAE businessmen will have a better opportunity, as there are no investments in that country so far. However, given the treaties signed today, investments shouild start to flow in-line with the countries policy of estabilishing businesses overseas," she added. "There will be many privileges provided for the UAE businessmen when they invest in Azerbaijan," said Babayev. Shaikha Lubna extended an invitation for Azerbaijan to enter into free trade negotiations with the GCC, explaining that "this is not a free trade arrangement, as the UAE is committed in this respect to its obligations within the GCC." A high profile Azerbaijani delegation is currently visiting the country, headed by the nation's president, to conclude the 11 agreements.

November 20, 2006 Azertag.az - President of Azerbaijan Republic Ilham Aliyev attended November 20 the Azerbaijan-United Arab Emirates Business Forum held at the Chamber of Commerce in Abu Dhabi. In his opening speech, head of the department at the Chamber of Commerce Jamal Mehdi thanked Ilham Aliyev for attending the forum. Minister of Economy and Planning Mrs. Sheikha Lubna bin Khalid Al Qasimi and Chairman of the Chamber of Commerce Saleh Salem bin Omeir Al Shamsi addressed the forum. They said President Ilham Aliyev's visit to UAE would give impetus to the economic ties between the two countries and urged UAE businessmen to invest in Azerbaijan. Mrs. Sheikha Lubna Al Qasimi stated that UAE support Azerbaijan's membership to the World Trade Organization (WTO) and stressed the possibility to do business in tourism, infrastructure and other sectors in Azerbaijan. Later, President of Azerbaijan Ilham Aliyev delivered speech at the forum. The Head of State said that after national leader Heydar Aliyev's coming to power in 1993, his right policy led the country to the way of development and today, Azerbaijan is the world's fastest growing economy. Mr. Ilham Aliyev pointed out that there are favorable investment milieu and good conditions for the expansion of economic-trade relations between Azerbaijan and UAE. On government's care about the private sector, he noted that new opportunities for cooperation between two countries' businesspersons would be also created. President Aliyev emphasized that every condition would be created for UAE companies to operate in Azerbaijan, and invited the UAE businessmen to the country. Official visit of President of Azerbaijan Ilham Aliyev to the United Arab Emirates is underway.

11-21-2006 Trend - A business-forum between the business people of Azerbaijan and United Arab Emirates took place in Abu Dhabi. The event attended by the Azerbaijani President Ilham Aliyev and UAE Minister of Economy Sheikh Luban Bint Khalid Al-Gassimi brought together more than 50 business people from the two countries, Trend reports quoting Azerbaijan Export and Investment Foundation (AZPROMO). The business-forum was organized with the initiative of the Ministry of Economic Development of Azerbaijan and Azerbaijani Embassy in UAE, through the organizational support from the Azerbaijan Export and Investment Foundation (AZPROMO). The Azerbaijani State Head and UAE Economy Minister highly assessed the practice of co-operation between the two countries. They voiced their interest in further expansion of the relations. From Azerbaijani side, the business-forum was attended by more than 20 business people.

Tuesday, November 21, 2006

President Aliyev meets UAE's businessmen

20 November 2006 - AzerTAg - President Ilham Aliyev of Azerbaijan on November 20 met with Seyyid Ahmed Gobash, head of the "Consolidated Energy Resources LLC" and "Ghobash Trading and Investments Group" Companies, ex-minister of UAE economy, ex-chairman of the Arab Monetary Fund.In meeting, the good level of bilateral relations was noted. As stated, the two countries have large potential for economic cooperation, and from this point of view, conducting a business forum is of great importance. Perspective join economic projects, as well as effective use of bilateral economic links is especially urgent, the sides marked.

President Aliyev meets UAE's Economy Minister

20 November 2006 - Today.Az - President of Azerbaijan Ilham Aliyev met with Sheikha Lubna Khalid Sultan al Qasimi, Minister for Economy and Planning of the United Arab Emirates at the Gasrul al-Emirate Hotel in Abu Dhabi. The meeting focused on the economic and trade cooperation between the two countries. UAE Minister said the upcoming business forum would be useful for both sides, stressing the need to expand cooperation with Azerbaijan in a number of spheres, including infrastructure and chemical industry. The sides emphasized that the signed documents constitute the basis for cooperation and will give an impetus to the future relationship. The necessity for Azerbaijan to learn from UAE's experience in creation of the free economic zones was highlighted at the meeting, as it will help strengthen bilateral ties. The issue discussed included the possibility of organizing the exhibition of the UAE-made goods in Azerbaijan.

BAKU. Nov 20 (Interfax) - Oil production in Azerbaijan grew 47% to over 26 million tonnes in January-October 2006, a source at the State Statistics Committee told Interfax. The Azerbaijan International Operating Company (AIOC), which is developing the Azeri-Chirag-Gyuneshli blocs, produced 18.5 million tonnes of oil, which exceeded by 80.9% last year's output. Azerbaijan produced 5.53 billion cubic meters of gas, a 20.2% rise, the source said. A higher AIOC production of casing-head gas was the main reason behind the surge. The company produced 1.97 billion cubic meters of gas, which was 80.9% higher than in January-October 2005.

11-13-2006 AzerTAg - State Oil Company of Azerbaijan (SOCAR) exported 239,909 tons of oil via Novorossiysk terminal in October, and 942 thousand tons over 10 months. Oil export through other routes came to 164,709 tons in October, and 2,503,857 tons since the beginning of the year. In Jan-Oct, SOCAR sold 1,177,990 tons of diesel, 785,191 tons of mazut, 273,485 tons of motor gasoline, 186,471 tons of aviation fuel, 29,965 tons of straight-run gasoline, 3,390 tons of lubricants, 14,362 tons of oil asphalt. Diesel was sold at $539,97 per ton, motor gasoline $506,64, mazut $270,32, aviation fuel $574,52. Brent oil price averaged $57,80 per ton, Urals oil $55,68.

14.11.2006 - MosNews - The Russian government is preparing a complaint with American lawyers to take Sakhalin Energy, the operator of Sakhalin-2 oil and gas project led by Royal Dutch/Shell, to the international arbitration court in Stockholm. “We are setting out our position with American lawyers, and I think that in two weeks we will have a document from New York which we will send to the Russian government”, said Oleg Mitvol, deputy head of the Russian environmental watchdog, Rosprirodnadzor. Mitvol was quoted by the AFX as saying that the Russian government could demand $15 billion in compensation from the Sakhalin Energy consortium, which comprises Shell, Mitsui & Co and Mitsubishi Corp. If the government decides to launch proceedings for “dissimulation of important information” leading to “environmental damages”, this will be done next year, Mitvol told journalists after a meeting with the U.S. Chamber of Commerce in Moscow.

09 November 2006 - Itar-Tass - British petroleum giant BP has stopped pumping oil from Azerbaijan to Georgia through the Baku-Supsa pipeline due to 'anomalies' exposed in the pipeline. As a result, oil export from Georgia's port of Supsa was paralysed. BP experts in London say the pipeline may be shut down till the end of November. Britain has not disclosed any information about the essence of these 'anomalies.' But specialists does not rule out that they may be similar to the problems at BP's Alaska oil fields that led to an oil spill onto the Prudhoe Bay tundra in March and the shutdown of its North Slope operations in August. U.S. court has already begun hearings over technical violations that caused the spill. It became known that BP while laying the Baku-Supsa pipeline used old pipes from the Soviet era-laid pipeline to reduce construction expenses. The Baku-Supsa pipeline was launched back in 1999. It was designed as a temporary route for the export of Azerbaijani oil while the Baku-Ceyhan pipeline is being under construction.

11-10-2006 - Interfax - Glencore and Select Energy have won a tender called by the State Oil Company of Azerbaijani (SOCAR) for the 16th and 17th consignments of Azeri Light crude oil produced at Azerbaijan's Azeri-Chirag-Gunashli (ACG) fields this year. Glencore received a consignment of 600,000 barrels of oil on November 4-6, and Select - a consignment of 600,000 barrels on November 8-10. Both consignments were shipped from Novorossiisk. Addax and Select Energy bought four consignments of Azeri light each this year. Vitol and Statoil bought two each, and Mitsubishi and Glencore bought one each.

11-10-2006 - The New Anatolian - Turcas Petroleum A.S started negotiations for the establishment of a joint venture with State Oil Company of Azerbaijan (SOCAR), the owner of 25 percent shares of BTC pipeline. A statement sent from Turcas to ?stanbul Stock Exchange said: "In accordance with the company's executive board decision dated Nov 09, 2006 and numbered 2006/26, our company has initiated negotiations for the development of cooperation opportunities and the establishment of a joint venture with the State Oil Company of Azerbaijan (SOCAR) for the production, exportation, processing and marketing home and abroad of crude oil and natural gas as well as the foundation of a refinery and a petrochemical facility and other related issues. Developments in this process will be shared with the public. Socar, established some 150 years ago, is entitled with its several enterprises to the crude oil and natural gas production of Azerbaijan, the operation of two refineries and pipeline systems, and the import, export, and supply of oil and natural gas. Following the agreement signed by 11 companies from 8 countries in 1994 for the Joint Development and Production Sharing of the Azeri-Chirag-Guneshli sites on the Azerbaijani side of the Caspian Sea, 26 individual Production Sharing Agreements have been signed between Socar and other international companies. The Baku-Tbilisi-Ceyhan (BTC) pipeline, with its length of 1750 kilometers, has been designed to carry 1 million barrels of crude oil from the Caspian Sea to the world markets per day. The amount of crude oil that Socar, as the owner of 25 percent shares of the BTC pipeline, will export via this pipeline has been rising incrementally, enabling SOCAR to play a crucial role in total oil shipments.

10 November 2006 - AzerTAg - President of SOCAR Rovnaq Abdullayev met with Special Representative for Commercial and Business Affairs at the U.S. Department of State Frank Mermoud and Ambassador of the USA to Azerbaijan Mrs. Anne Derse, press service of SOCAR said.
Frank Mermoud said American companies are satisfied with cooperation with SOCAR. He said he believes SOCAR will continue enhancing cooperation with the U.S. companies in Azerbaijan. Mr. Mermoud welcomed SOCAR's new project aimed at cleaning up Absheron peninsula's oil-polluted area, adding he is ready to engage American companies in this project if needed. Rovnaq Abdullayev spoke of new projects his company would implement over the coming years. Mr. Abdullayev said both SOCAR and American oil companies operating in Azerbaijan are benefiting from their bilateral cooperation, stressing his company's wish to further strengthen these ties. SOCAR's President noted the work to clean up Absheron peninsula's and Baku bay's oil-polluted area would start in 2007, and asked Frank Mermoud to invite American companies to submit their proposals to SOCAR

10 November 2006 - Today.Az - A delegation led by Industry and Energy Minister Natig Aliyev has visited China to attend oil conference to be held between November 9 and 16 in Beijing. Natig Aliyev told APA from China that he will make a speech on Azerbaijan's current energy policy. He will also meet with relevant officials of China.

09 November 2006 - Today.Az - SOCAR implemented drilling works of 14 459 meters in October with an exception of Joint Ventures and Operating Companies. As APA reports, 14 159-meter production drilling and 300-meter exploration drilling were implemented. SOCAR drilled 123 373 meters during the period of January-October, of which 121 458 meters are production drilling and 1 915 meters are exploration.

07 November 2006 - Today.Az - SOCAR Marketing and Economic Operations Department announced a tender for export of 1 200 barrels of Azeri Light Crude Oil from Ceyhan Port at two stages-half on December 1 and half on Dec. 15. The Department told APA that the bid opening is scheduled for November 9.

05 November 2006 - AzerTAg - According to the State Oil Company, Azerbaijan purchased 33,4 million cubic meters of gas in October for electric stations from Russia, totalling 3 billion 45,9 million cubic meters in January-October. Oil import from Russia averaged 12,1 million cubic meters per day. 12 million cm of gas is scheduled to be bought daily from Russia in November. With winter coming, the volumes will go up to 13, million cm in December. SOCAR has purchased 24 billion 910,8 million cm of gas between since November 2000

03 November 2006 [16:56] - Today.Az - Russian oil company RussNeft and the State Oil Company of Azerbaijan (SOCAR) have signed a production-sharing agreement to develop two oil fields in Azerbaijan, a RIA Novosti correspondent reported Friday.The Govsany-Zykh fields are in the southern part of the Apsheron Peninsula, with recoverable reserves of 12 million metric tons (87 million barrels) of oil. The agreement was signed by RussNeft President Mikhail Gutseriyev and SOCAR President Rovnak Abdulayev. "RussNeft has come to Azerbaijan to stay. This is a truly historic event," Gutseriyev said. He said of the $100-150 million that his company is going to invest in the project, 15% will go into environmental conservation programs. RussNeft, Russia's newest vertically integrated oil company, is among the country's top 10 crude producers. Its recoverable reserves exceed 630 million metric tons (4.6 billion barrels).

08 November 2006 [22:09] - Today.Az –Before coming to Moscow on November 8, Azerbaijani President Ilham Aliyev visited the opposite geopolitical pole, Brussels. He is carrying on his father's policy of balancing and maneuvering.
The Azerbaijani president wants to maintain and develop constructive relations with Moscow, although the country is also trying to strike a geopolitical balance between East and West. Aliyev has to tread very carefully so as not to irritate either side. However, it looks as if relations with the Kremlin are reaching a new level. Moscow's influence in Azerbaijan is focused on political factors. Azerbaijan does not receive Russian state investment, loans or grants, and Russian capital does not play a major role in the Azerbaijani economy. A year ago, Baku signed a framework agreement with Russian aluminum giant RusAl on the construction in Azerbaijan of an aluminum plant worth $1 billion, but ground has still not been broken on the project. In early December, Russian Prime Minister Mikhail Fradkov will visit Baku, becoming the first Russian premier to visit Azerbaijan since Soviet times. His visit should add zest to bilateral economic relations. The Kremlin has a strong political standing in Azerbaijan, notably in settling the Nagorno-Karabakh problem. Jaap de Hoop Scheffer, NATO's Secretary General, said during his visit to Moscow that Russia played a major role in resolving South Caucasian conflicts. He said Russia was an irreplaceable factor in the efforts to restore peace in areas of ethnic tension in the former Soviet states. Some Azerbaijani politicians think NATO might join forces with Russia to settle the Karabakh problem. Now that the Baku-Tbilisi-Ceyhan oil pipeline, which bypasses Russia, has been inaugurated, the West intends to ensure the safe and uninterrupted flow of oil along it. This calls for settling the Karabakh problem, which is impossible without Russia. The pipeline can be described as an American political and economic project in a region that is in the sphere of Russian interests. The parties may decide to follow up the oil pipeline with a gas pipeline from Baku through Tbilisi to Erzurum. President Aliyev recently made an interesting comment, with Moscow and Tehran in mind. He said in an interview with the Qatar-based television channel Al Jazeera: "The [Baku-Tbilisi-Ceyhan] pipeline is not spearheaded against anyone. On the contrary, we hope that it will also benefit our neighbors after we expand it and build a parallel pipeline." He did not specify what kind of "parallel pipeline" might be built and how Azerbaijan's neighbors would use it, but he had an important reason for disclosing the possibility. In principle, the Baku-Tbilisi-Ceyhan (BTC) pipeline will have sufficient capacity for delivering oil from Azerbaijan and Kazakhstan, which means that Aliyev has offered a purely political project (the parallel pipeline) to the neighboring oil producers, Russia and Iran. Russia will be able to use the BTC pipeline to transport its oil only after 2015-2020, when Azerbaijan's Azeri, Chirag and Guheshli oilfields become depleted. However, the presidents of Russia and Azerbaijan will discuss not only oil projects in Moscow, but also Azerbaijan's relations with NATO. Political analysts in Azerbaijan say uncertainty surrounding Azerbaijan's admission to NATO is creating problems in the Baku-Moscow-Brussels triangle. When Geidar Aliyev, the father of the current president, came to power in Azerbaijan, he made certain promises to NATO in a bid to strengthen his own and the country's position. After the dissolution of the Soviet Union, Azerbaijan intuitively moved toward the West. But when Russia got back on its feet, Baku halted its incorporation into NATO. The current balancing act between Moscow and NATO suits the Azerbaijani elite, because it offers them a chance to obtain support from both sides. Moreover, a vague foreign policy allows the government to avoid "cumbersome commitments." So, where will Azerbaijan move? Ilham Aliyev may have to answer this question on his trip to Moscow.

11–09–2006 Kommersant by D. Baturin // Russia Courts Azerbaijan's Support Against Georgia
Today Russian President Vladimir Putin will suggest to Azerbaijani President Ilkham Aliyev, who is visiting Moscow after a trip to Brussels to meet with European Commission President Jose Manuel Barroso, that he decide whether Azerbaijan intends to continue with its "strategic partnership" with Russia. If Azerbaijan responds positively, Moscow will request Baku's cooperation in Russia's struggle with Georgia and will offer Russian arms and investment by UES Russia and RusAlum in return.
President Aliyev's visit to Europe unnerved the Kremlin chiefly because of Azerbaijan's projected defense spending for 2007: the country will spend $1 billion on the military next year, up from $600 million currently. Russia fears that this could be a preliminary step towards membership in NATO. If Azerbaijan joins neighboring Georgia in a NATO bid, the ex-Soviet Caucasus could end up hosting NATO and American military bases as the West seeks to control Iran.
In an effort to forestall the possibility of NATO bases near its southern border, Russia is attempting to lure Azerbaijan back to its own camp with promises of increased sales of cut-rate Russian-made weapons. Russia has been curtailing its arms trade with Azerbaijan, fearing to fan the flames of Azerbaijan's long-standing feud with neighboring Armenia.
Russia is also focusing on Azerbaijan in an attempt to create a unified front within the CIS against the Kremlin's latest enemy, Georgia. Moscow is seeking to impose an energy blockade on Georgia in the winter of 2006-2007, while Azerbaijan last winter stepped in with emergency supplies of electrical energy and gas when Russia interrupted deliveries to Georgia. In 2007, Gazprom is threatening to raise the price of gas for Georgia from $110 to $230 per thousand cubic meters. According to unofficial sources, the same proposal has been made for Azerbaijan as well, angering President Aliyev. The country currently pays $95-100 per thousand cubic meters for the 1.5 billion cubic meters of gas that it imports from Russia annually.
Other proposals from the Kremlin are more palatable: according to Kommersant's sources, Vladimir Putin will offer President Aliyev investment by the company RusAlum to the tune of a $1 billion aluminum plant in Azerbaijan. Mr. Putin will also mention interest on the part of the Russian company UES Energy in investing in Azerbaijan's energy sector.
Technically, Mr. Aliyev's trip to Europe before coming to Moscow puts Mr. Putin in the position of asking rather than dictating with regard to his Azerbaijani colleague. Mr. Aliyev demonstrated in Brussels that his trip to Europe was more about energy than military matters, though he met with the NATO leadership. After his meeting with Mr. Barroso, Mr. Aliyev announced agreements between Azerbaijan and the EU to guarantee energy supplies from the Caspian region and negotiations between Azerbaijan and Ukraine on a project to deliver oil to Eastern Europe. President Aliyev has held similar talks with Belarus, a project that cannot be interpreted as pro-Russian.
With regard to the "anti-Georgia bloc," the Azerbaijani president announced yesterday in Brussels that he hopes that relations between Russia and Georgia improve, since Azerbaijan "is building strategic partnerships with both countries." That stance is hardly likely to appeal to Vladimir Putin, meaning that today's meeting promises to be tense.

11–04–2006 - Regnum News – Azerbaijan counts for buying gas from Gazprom next year at a price lower than the one the consortium proposed to Ukraine — $130 for 1,000 cubic meters. First deputy prime minister of Azerbaijan Yagub Eyubov made the announcement in Baku on November 3. According to him, the question of buying gas from Russia next year has not been settled yet, talks have continued. “Russia proposed to Ukraine the gas at a price of $130 for 1,000 cubic meters. We count that or us the price will be lower,” Eyubov said. Besides, Azerbaijan is having talks with Iran concerning gas supplies. “We are having talks with the Iranian side concerning gas supplies, but there has been no clarity on the issue yet. However, I believe that Azerbaijan is able to cover its gas demand on its own without importing it,” Eyubov noted. Overall, Azerbaijan’s estimated demand for gas is 12-14 billion cubic meters per year.

MOSCOW, November 7 (RIA Novosti) - Azerbaijan's president will arrive in Moscow Wednesday for a three-day visit ahead of negotiations on Russian natural gas deliveries for 2007, the presidential press service said. The next round of talks between Azerbaijan and Russian gas monopoly Gazprom's export arm on the volume and price for Russian gas deliveries to the Caspian country in 2007 is scheduled for November. "At the invitation of the Russian president, Azerbaijan's President Ilham Aliyev will pay a working visit to Russia November 8-10," Aliyev's press service said. Russia covers one-third of Azerbaijan's gas needs, but the Caucasus neighbor is currently increasing its domestic gas production and seeking to diversify gas imports, including through deliveries from Iran. Since last year, Russian energy giant Gazprom has been pushing for European prices for the gas it sells to its ex-Soviet neighbors, which previously enjoyed preferential rates. But Azerbaijan's energy minister said October 12 that his country might stop importing Russian natural gas in 2007 and seek alternatives if the prices offered at upcoming talks are unacceptably high. "If the price for natural gas is too high, Azerbaijan will refuse to buy it [from Russia]," Natik Aliyev said, adding that his country has many alternative sources. Under an agreement signed in December 2003, Gazprom is to supply Azerbaijan with 4.5-5.5 billion cubic meters of natural gas annually until the end of 2008. In 2006, Azerbaijan will receive 4.5 billion cu m of gas at a price of $110 per 1,000 cu m. Aliyev said hydrocarbon-rich Azerbaijan could import gas from Iran and also increase its domestic production significantly once its Shakh-Deniz field in the Caspian Sea, with estimated reserves of around 1,000 billion cu m, comes on stream in December. Azerbaijan's annual domestic gas consumption totals 15-16 billion cu m. The country currently produces around 6.5 billion cu m of natural gas per year. Iran has proven natural gas reserves of around 28 trillion cu m, the world's second-largest reserves after Russia. In 2005, gas production in the country totaled 86.6 billion cu m.