Baku News

21 May 2007 - AzerTag News - President Ilham Aliyev received Reinier Zwitserloot, Chairman of the Board of Executive Directors of the German company Wintershall, the country's largest crude oil and natural gas producer. President Aliyev stressed Azerbaijan has gained huge success in oil and gas industry for the past few years. He said Azerbaijani companies effectively cooperate with largest energy companies around the world, stressing favorable conditions created in his country for foreign companies. Reinier Zwitserloot said Azerbaijan is now enjoying an oil boom. He said he welcomes the level of Azerbaijan's energy cooperation with Europe. Reinier Zwitserloot informed President Ilham Aliyev about future plans of his company. AzerTAg

21 May 2007 - Today.Az - "Germany wants to import Azeri gas. The government of Germany intends to ensure its gas supply in diversified way, from different nations, including Caspian countries like Azerbaijan and Kazakhstan." "Privately-owned companies but not the government are in charge of gas supply in Germany, so some of our companies are negotiating with Azerbaijan," said Frank Weizig, an officer of German Ministry of Economics and Technology. He added that Germany's demand for gas is supplied by Russia (30%) and Norway and Netherlands, APA reports. Speaking about trade between the two nations, he said Germany's exports to Azerbaijan rose 8.6%, year-on-year, to 485 million euro and imports jumped 90% to 609 million euro.

BAKU, May 21 (RIA Novosti) - Baku can start natural gas shipments to Turkey as soon as Ankara is capable of receiving them, Azerbaijan's energy and industry minister said Monday. Natik Aliyev said the South Caucasus gas pipeline is already on stream with Azerbaijan using it to export gas to Georgia from its Shakh Deniz field in the Caspian Sea. "As for starting gas exports to Turkey, this does not depend on Azerbaijan since the Turkish section of the pipeline is being built by the Turkish company Botash. Apparently it is now undergoing field tests," he said. The minister said for the time being Azerbaijan is ready to use all the gas it produces, while Georgia has asked for more deliveries. It was reported earlier that Azerbaijan plans to increase gas output at Shakh Deniz by 1 billion cubic meters in 2008, with about 5 billion cu m expected this year. Aliyev said gas exports to Georgia will be increased once a new field is put into operation, adding that Azerbaijan currently exports 1 million cu m a day to Georgia. 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.

18 May 2007 [09:35] - Today.Az - Azerbaijan's Industry and Energy Minister, Natig Aliyev, met with Mihail Lupoi, head of Romanian delegation to NATO Parliamentary Assembly, Vice President of Parliamentary Assembly. Natig Aliyev said that Azerbaijan shows great interest to take part in Nabucco pipeline. Aliyev added that Azerbaijan intends to build an oil refinery at Turkey's Ceyhan Port, the outfall of Baku-Tbilisi-Ceyhan pipeline, and take a stake in one of the

17 May 2007 - ARA News - "Azerbaijan and Norway have very common similarities. Norway was poor country in the past, but it succeeded to develop its economy later." "Azerbaijan follows this path but it does not have so much time as Norway does," Arve Thorvik, Statoil’'s Vice-President for EU affairs stated. According to him, there are two choices: the quickest development and quickest collapse. "Nigeria, one of the huge oil-exporting country is an example of it. Azerbaijan should examine Norway’s path. By the end of the World War II Norway could not succeed to develop its social and political structures. But there were some factors which let Norway succeed in that. The first factor was our national recourses, oil and electric energy. These factors created favorable conditions for industrialization of Norway. The second factor was the large investments in the education. The third factor was the introduction of elected democracy in Norway." Arve Thorvik said in the 70s of the 20th century, Norway's budget received large scale petrodollars form oil export. "US companies discovered oil recourses in Norway. But the Norwegian government took some important steps. Firstly, oil revenues were imposed 76 percent tax. Secondly, all oil companies were to recruit its workers among Norwegians. Thirdly, Norway established Oil Fund." Statoil's vice-president said Norway model is suitable for small and active economies. That is why, education and health is free of charge for citizens. Norway model stresses the human recourses in its policy. "Once Norwegian Prime Minister said human recourses form 75 percent of Norway's gross domestic product (GDP). Openness to the world and new ideas, free trade are significant in this issue. It also requires planned policy and protection of national-cultural distinctness," he said. "He said according to Norwegian law, establishing of offices in regions for oil companies is obligatory. Much more factor is that oil revenues should be spent on important spheres. The society supervises the government, holds monitoring and government makes reports. These factors should be taken into consideration in the production of any good: capital, creative work, human potential, culture."

16 May 2007 - Reuters – Azerbaijan's industry and energy minister has said that, in light of a recent pipeline deal between Russia, Turkmenistan, and Kazakhstan, the country's Baku-Tbilisi-Ceyhan (BTC) pipeline is still available to transit Kazakh oil. Natik Aliyev's comments were made after he returned from an energy summit in Krakow, Poland on May 11-12. Under discussion at the summit were potential routes to transit oil and gas from the Caspian to EU countries. The Krakow summit was overshadowed by a deal agreed on May 12 during three-way talks between Russian President Vladimir Putin, Turkmen President Gurbanguly Berdymukhammedov, and Kazakh President Nursultan Nazarbaev to build a pipeline along the Caspian coast. The pipeline will carry natural gas from Turkmenistan to Europe via Kazakhstan and Russia, and further consolidates Moscow’s control of regional energy shipments. U.S. Energy Secretary Samuel Bodman has said the deal is "not good for Europe." Aliyev told RFE/RL that he had expected Kazakhstan to work with Russia, but that Azerbaijan was still open for cooperation. "Going via [the Russian Black Sea port of] Novorossiisk, [the Black Sea port of Burgas], and then via [the Greek port of Alexsandroupolis] is the longer way, and oil tankers are more likely to capsize. But if the companies operating in Kazakhstan decide that it's better to join the BTC, to go via Azerbaijan, then we can arrange that," Aliyev said. Aliyev said that the Kazakh representative at the Krakow meeting "gave us hope, saying that Kazakhstan will do its best to transit its energy resources, especially gas and oil through 'the Western way,' too." Azerbaijani officials have said it would be possible to expand the capacity of the 1,770-kilometer pipeline BTC pipeline to make room for Kazakh oil.

16 May 2007 - ARA News - NATO is talking to oil and gas producing companies and countries about providing sea-borne rapid reaction forces to combat attacks on facilities, hostage taking and piracy, a senior NATO official said May 14. Jamie Shea, director of policy planning in the office of the NATO secretary-general, said the likely measures would involve operations in Africa, Asia and the Middle East. "In NATO, we are looking very actively at using our maritime resources ... to see how we can link up with oil companies," Shea said at the conference in London. Shea said he had discussed the issue with Royal Dutch Shell Plc and London-based BP Plc, the world's second and third largest Western oil companies by market value, respectively. While the companies were beefing up their own security measures, they were also keen to receive help with intelligence, Shea said. NATO is also in talks with Qatar about how it could help secure the Gulf state's large liquefied natural gas (LNG) facilities. LNG is gas cooled to liquid and transported under pressure in specially constructed tankers. LNG facilities are seen as a particular security risk because of the pressurized gas. NATO is not yet in talks with Saudi Arabia but may be prepared to help there as well, Shea said. Other areas in which NATO could help included fighting hostage-taking in Nigeria where workers are being seized from oil facilities on an almost daily basis and piracy in Asia

15 May 2007 [10:23] - ARA News - NGO Coalition "To Improve Transparency in the Extractive Industry" coordinator Gubad Ibadoghlu told a press conference that the State Oil Company of Azerbaijan (SOCAR) is responsible for capital expenditures as a representative of the government in oil development agreements with foreign companies. "The SOCAR is both the customer (the representative of the government of Azerbaijan) and executer in these contracts. This kind of dual status causes conflict of interests. A trilateral commission composed of representatives from the Azerbaijan International Operating Company, the Government and the NGO Coalition has to be established to investigate

13May 2007 - Today.Az - An idea was suggested at the summit of Polish, Azerbaijani, Georgian, Ukrainian and Lithuanian Presidents held in Krakow, Poland, to establish a consortium to study prospects of and issues related to delivery of the Caspian hydrocarbon resources to Europe via Georgia, the Black Sea, Ukraine and Poland. Azerbaijan's industry and energy minister Natig Aliyev told APA that Kazakhstan's joining this idea as a key player will arouse great importance. "We all have discussed [guaranteeing of] energy security of the region in Poland. A task force will be set up at the first phase to deal with formation of a joint consortium for this process," he added.

12 May 2007 - RIA Novosti - The informal energy meeting of developing countries in Krakow agreed Friday to extend the existing Odessa-Brody pipeline to Polish terminals and refining centers and create a corridor to bring Central Asian energy to Europe bypassing Russia. The presidents of Poland Lech Kaczynski, Azerbaijan's Ilham Aliyev, Georgia's Mikheil Saakaashvili, Lithuania's Valdas Adamkus, and Ukraine's Viktor Yushchenko, as well as Kazakh Deputy Energy Minister Lyazzat Kiinov, signed a resolution highlighting the importance of energy security and endorsing the extension of the Ukrainian-Polish Odessa-Brody oil pipeline to the Polish port of Gdansk and refining center of Plock. The countries also agreed to set up a joint venture to implement joint projects, such as an energy corridor from Central Asia to Central Europe through the South Caucasus. Kaczynski said the next such summit would take place in October in the Lithuanian capital Vilnius. "The energy summit was a great idea," Saakaashvili said, describing the result as "a promising start, a first step." Yushchenko highlighted that the forum was not directed against third countries and that the developing countries had finally "started to coordinate their energy efforts." He expressed satisfaction over the "political decision to extend" the Odessa-Brody pipeline which, for want of supplies and access to a refining capacity, currently mainly transports Russian oil to the Black Sea port of Odessa. Aliyev described the summit as a sign of "the growing role of regional cooperation." He said Azerbaijan was interested in the prospect of selling its huge oil and gas reserves to Europe.

10 May 2007 [20:16] - APA - Conference on hydrocarbons of the Caspian Sea will be held in the European Parliament. Forum of Azerbaijani Students in Europe (FASE) will organize the forum "Joint energy cooperation: Caspian Sea as eastern shore of Europe." The event will be held on May 15 in the framework of Brussels Forum of European Azerbaijanis. Emin Milli, one of the organizers of the forum said that a number of European countries facing energy crisis need increasing of energy resources of the European Union. "Caspian's hydrocarbons are of great importance from this aspect. 233bn cu m gas and 50mln tons oil is planned to be transported through newly-commissioned Baku-Tbilisi-Erzurum gas pipeline and Baku-Tbilisi-Ceyhan oil pipeline. Oil and gas of Kazakhstan and Turkmenistan will possibly to have an access to western markets," he said. The role of the European Union in the Caspian-Black sea region and mutual commitments in long-lasting strategic projects will be analyzed. The conference is to bring together members of European Parliament and Azerbaijani parliament, political figures, managers of Norwegian Statoil Company, lobbying groups and representatives of the embassies accredited in the European Union.

10 May 2007 - APA - Romania's Oil Terminal Company joined the consortium of states participating in the implementation of the oil pipeline project Constance-Trieste-Paneurope envisaging transportation of the Caspian oil, Mircha Taiss, head of the development programs of the company said. He said that the representatives of five states participating in the construction of the pipeline will specify the regulations of the consortium and sign it in the office of Oil Terminal in Constance on July 3-4. Taiss said that the company will participate here as Constance is the starting point of the new pipeline. The main aim of Constance-Trieste pipeline that will unite Romania's port on the shore of Black sea and Italy's port on the shore of the Adriatic Sea, is to bypass Bosporus strait. "So, the influence of non-EU member Turkey can be avoided and European countries can be provided with non-Russian oil, especially of Kazakhstan and Azerbaijan," he said. 1350-km pipeline will cost EUR3.5bn. Romania shares 650km of this pipeline. The pipeline to unite Romania, Serbia, Croatia, Slovenia and Italy will have an access to Transalpine pipeline from Trieste to Hamburg (Germany). Oil Terminal Company, founded in 1898 has the biggest oil terminal of south-eastern Europe.

07 May 2007 - AzerTAg - The delegation of the Germany city of Ludwigshafen visited the local enterprise of Germany's BASF chemical company in Sumgait on May 5. Head of BASF Russia-CIS business center Peter Golitsin and director general of BASF-THI Chemical company Umid Bashdash told of the enterprise. The enterprise employs over 60 workers and produces 40 items of goods. The delegation saw the production process and toured the facilities here.

07 May 2007 - Reuters - Azerbaijan's state oil firm SOCAR is close to signing a contract with a major Indian oil company on direct crude oil supplies to one of the firm's refineries, a Socar official said Friday. The official said SOCAR's Azeri Light crude would be shipped to India from Turkey's Mediterranean port of Ceyhan, where Socar delivers its crude via a pipeline from Baku. "A contract will be signed in the near future with a big Indian company to supply SOCAR's crude, transported via a pipeline to Ceyhan from Baku, to the company's refineries," the official said. He did not disclose the name of the company, saying the talks were confidential. The official also said Socar was holding similar talks with oil companies in North and South America, China, Japan and some Mediterranean countries.

05 May 2007 - Reuters - Azerbaijan's huge Shakh Deniz gas field may reach peak annual production of 9.6 billion cubic metres in its first phase rather than the previous forecast of 8.6 bcm, Azeri state energy firm Socar said on Friday. Kamal Abbasov, head of gas operations at Socar, said the firms behind Shakh Deniz were discussing raising production in late 2008, which might take output to the new peak in 2009-2010. "Right now the Shakh Deniz partners are discussing additional investments to increase production by 1 bcm a year from the fourth quarter of 2008," he told reporters, without disclosing the amount of investment required. He said the extra production would be exported at commercial terms, unlike the volumes specified in the Shakh Deniz contract, which are sold at a fixed price. The $4 billion project is operated jointly by BP and Norway's Statoil. It started production in December but had to halt output soon afterwards due to a leak from the first well, which has also halved this year's production forecast. Abbasov said the second of four production wells planned for this year would be brought on stream later this month. The group plans to start exports to Georgia and Turkey in the second quarter of this year and Abbasov said construction of the Baku-Tbilisi-Erzerum pipeline had now finished in Turkey, although testing was still required. Talks with buyers of gas from the second stage, which will start development in 2012, would start at the end of this year or early in 2008. "According to a preliminary assessment, the second phase of Shakh Deniz will produce 12 bcm a year at its peak," said Abbasov. Shakh Deniz's total reserves are estimated at 1.2 trillion cubic metres. Besides BP and Statoil, which have 25.5 percent of the project each, Socar, LUKAgip, NICO and Total each have 10 percent owned. The other 9 percent is held by Turkey's TPAO.

04 May 2007 - MarketWatch - Turkmenistan's president, Gurbanguly Berdymukhammedov, has invited Chevron Corp. to participate in the exploration and development of hydrocarbon fields in the Turkmen part of the Caspian sea, the Turkmen government said late Thursday. During a meeting with senior Chevron officials, Berdymukhammedov said the Central Asian nation was interested in acquiring modern technology for the oil and gas sector and was ready to discuss areas of cooperation with Chevron, the Turkmen government said on its Web site. Turkmenistan is a major natural gas producer. Its government says the country's natural gas reserves are 2.8 trillion cubic meters, although this hasn't been independently verified. The size of Turkmen oil and gas reserves in the Caspian Sea isn't known. Turkmenistan plans to produce 80 billion cubic meters of natural gas and 10.4 million metric tons of oil, or about 200,000 barrels a day, in 2007.

04 May 2007 [10:39] - EurasiaNet - By Stephen Blank - Azerbaijani President Ilham Aliyev's late-April trip to South Korea underscores how Asian states are becoming an increasing factor in the Caspian Basin energy equation. Aliyev is intent on exploiting the growing oil & gas needs of China, South Korea, Japan and other nations to weaken Russia's ability to use energy issues as a lever of geopolitical influence. Aliyev's three-day visit to South Korea began April 23, marking a reciprocal gesture in recognition of South Korean President Roh Moo-Hyun's trip to Azerbaijan in 2006. On the first day of Aliyev's stay in Seoul, the two leaders signed an economic cooperation pact covering energy development, construction and information technology. That agreement stands to build on an already solid foundation of bilateral cooperation. In 2006, the two governments signed a Memorandum of Understanding to search for oil and develop jointly Azerbaijan's Inam field in the Caspian by September 2007. Energy cooperation is also extending to power generation. South Korea's STX group is working to sign a MOU with Baku to build 10 wind generators that could potentially generate 20 megawatts of electricity, and the Korea Electric Power Corp. is poised to begin construction on a gas-fired thermal power plant. While it is obvious to analysts that South Korea is primarily seeking new energy sources and Azerbaijan new energy export markets, the significance of Aliyev's foray to Asia is far greater than the completion of bilateral business deals. It is symbolic of the rapid expansion of East and South Asian economic influence in the Caspian Basin. This is a development that significantly increases the challenges that Russia faces as it seeks to defend its dominating energy position in the region. East Asian states' intensified quest for access to Caspian energy points to their increased skepticism concerning the reliability of Russia as exporter and producer. South Korea, China and Japan, as well as the South Asian states of India and Pakistan, are unwilling to assume the role of supplicant to Moscow, thereby exposing themselves to bullying and blackmail on the part of the Kremlin, as has been the case with Ukraine, Belarus and Georgia. Over the past decade, East and South Asian states have all seen Russian promises broken, contracts disregarded, and projected deliveries and pipelines stalled for reasons of Russian foreign policy or bureaucratic politics. Consequently, these states see Caspian energy sources as a more reliable alternative to Russia. Even if the rapidly increasing energy demands require that they purchase Russian oil or gas, East and South Asian leaders are determined to avoid becoming energy dependent on Moscow. Asia's thirst for new energy sources is coinciding with a desire by Aliyev to use Azerbaijan's leverage and revenues generated by its oil and gas holdings to enhance its foreign-policy independence from Russia. The Baku-Tbilisi-Ceyhan pipeline at present serves as Azerbaijan's primary mechanism for the enhancement of its autonomy. Aliyev is now pressing hard to build another pipeline that circumvents Russia -- trans-Caspian route that links his country to Turkmenistan and Kazakhstan. In addition, Azerbaijan has committed to shipping natural gas to Georgia to make up for shortfalls created by Russia's punitive price hike, and it is exploring export deals with the European Union, which has professed a desire to diversify its energy sources. Russian commentators have complained bitterly about Azerbaijan’s energy policies. Observers elsewhere, however, see the moves mainly as a response to the opportunities created by globalization. Whatever Baku’s motivations, recent developments -- in particular the rise of Asian states and major energy players -- are likely to make it much harder for Russia to maintain its dominant position, and the ability that comes with it of imposing the Kremlin's will on neighboring CIS states. Globalization appears to be helping Caspian Basin energy suppliers -- Azerbaijan, Kazakhstan, and now, potentially, Turkmenistan -- enhance their independence by creating multiple new export opportunities. In the months and years ahead, it will become more difficult for any one state to corner the region's energy market.

03 May 2007 – Today.Az - Business -Palmali to transport SOCAR oil from Ceyhan Port 03 May 2007 [18:32] - Today.Az The State Oil Company of Azerbaijan (SOCAR) and Palmali Group of Companies have signed an agreement on transportation of Azeri oil pumped to the Ceyhan Port via Baku-Tbilisi-Ceyhan pipeline. Palmali Office in Azerbaijan told that SOCAR President Rovnag Abdullayev and Palamali President Mubariz Mansimov signed the 10-year deal, APA reports.

03 May 2007 [17:14] - Today.Az - Petrom director general Mariana George said the company intends to establish an office in Turkmenistan and also enter Azeri market, APA Bureau reports. "After Romania, Petrom is planning to focus the main attention in the Caspian region and to open the second operation center here. The center will cover the Caspian region, especially Kazakhstan and Russia," George said. The company will also continue its production activities in the Black Sea region.

03 May 2007 - Today.Az – Azerbaijan has given up oil transit via Russia's territory, the Prime-Tass news agency quoted Transneft as saying on Wednesday. According to Transneft, Azerbaijan gave up oil transit via Russia's territory till the end of the year. In April Azerbaijan stopped oil export via Russia’s territory, the company said. In the first quarter of 2007 oil transit from Azerbaijan reached 1.023 million tonnes.

01 May 2007 [12:08] - Today.Az - A site has been allotted in Heydar Aliyev Avenue to construct a new building for the State Oil Company of Azerbaijan (SOCAR). Leading companies of France, Italy, the UK, South Korea, Turkey and Azerbaijan were involved in architectural designing (engineering) of the building. SOCAR told APA-Economics that the building will be constructed on the basis of the architectural style proposed by South Korea's Heerim Architects & Planners Co. Ltd. The building is slated to be 149.4 meters high, 59,102 sq. m and to accommodate more than 2,000 employees. The building will have 2 underground and 35 overhead floors and will be constructed by local builders under supervision of Heerim Architects & Planners Co. Ltd.

01 May 2007 - APA-Economics - SOCAR's Bayil Port Sea Exploration Drilling Department has handed over well #74 to 28 MAY Oil and Gas extraction Unit. The 3,500 meter-deep well produces between 120,000 and 150,000 cubic meters of gas a day. The well has been connected to the high pressure pipeline. Well #75 will be brought online in platform #19 in a few days. Within bringing the well online, Guneshli Filed will beat daily 11mln cu m gas output. SOCAR plans to drill more than 20 new gas wells and 2 oil wells in Guneshli field. It is slated to double the output in the field next year.

04 May 2007 - Upstream OnLine - Azerbaijan's huge Shah Deniz gas field may reach peak annual production of 9.6 billion cubic metres in its first phase rather than the previous forecast of 8.6 Bcm, Azeri state energy company Socar said today. Kyamal Abbasov, head of gas operations at Socar, said the companies behind Shah Deniz were discussing raising production in late 2008, which might take output to the new peak in 2009-2010. "Right now the Shakh Deniz partners are discussing additional investments to increase production by 1 Bcm a year from the fourth quarter of 2008," he told Reuters, without disclosing the amount of investment required. He said the extra production would be exported at commercial terms, unlike the volumes specified in the Shah Deniz contract, which are sold at a fixed price. The $4 billion project is operated jointly by UK supermajor BP and Norway's Statoil. It started production in December but had to halt output soon afterwards due to a leak from the first well, which has also halved this year's production forecast. Abbasov said the second of four production wells planned for this year would be brought on stream later this month. The group plans to start exports to Georgia and Turkey in the second quarter of this year and Abbasov said construction of the Baku-Tbilisi-Erzerum pipeline had now finished in Turkey, although testing was still required. Talks with buyers of gas from the second stage, which will start development in 2012, would start at the end of this year or early in 2008. "According to a preliminary assessment, the second phase of Shah Deniz will produce 12 bcm a year at its peak," said Abbasov. Shah Deniz's total reserves are estimated at 1.2 trillion cubic metres. Besides BP and Statoil, which have 25.5% of the project each. Socar, Russia's Lukoil, Iran's Nico and French giant Total each have 10% owned. The other 9% is held by Turkey's TPAO.