Baku News

19 June 2007 - Upstream OnLine - Azerbaijan has raised the estimates for reserves in the Azeri-Chirag-Guneshli (ACG) oilfields to 1.2 billion tonnes (8.82 billion barrels) from a previous estimate of 900 million tonnes (6.6 billion barrels), President Ilham Aliyev said today. The ACG fields are the main source of crude for the Baku-Ceyhan pipeline, which will eventually pump more than 1 million barrels per day from Azerbaijan to the Turkish Mediterranean coast. Both ACG and Baku-Ceyhan are operated by BP. Aliyev, addressing a regional summit, gave no explanation for the raised estimate. "If we need to, by 2010, we can produce 65 million tonnes per year (1.3 million bpd) from all of our fields," Reuters quoted Aliyev as saying. "We can pump as much crude as we need to."

June 19, 2007 - Kommersant by Gennady Sysoev - Russia’s current attitude to GUAM may be described so: the policy to counteract this organization it growing into the policy to collapse it. This transformation happened after the price of GUAM’s existence had become considerably higher for Russia: the alliance began turning into a structure that got in the way of Russia’s aspiration to control CIS energy supplies to the West. Moscow felt strong dislike towards GUAM (originally – GUUAM) ever since the alliance’s birth, because its member states were not hiding that they united specifically to restrict Russia’s influence on the post-Soviet space. So, it pushed Russia to taking steps in response. First, Russia asked for membership in the alliance, but received a polite refusal: no one needed a Trojan Horse there. Then, Moscow changed its strategy. To spite GUAM, the Euro-Asian Economic Community (EurAsEC) was founded, uniting Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Armenia, that joined them later. Then Russia took another step towards unhinging GUAM: it initiated accepting Uzbekistan into the Shanghai Cooperation Organization (SCO). Nevertheless, it was too early to see all those steps as the purposeful policy for collapsing the alliance. Although Moscow disliked GUAM, it put up with its existence, and even bore the strikes inflicted by it. Thus, Moscow reconciled itself to the fact that for the sake of membership in the new alliance, Uzbekistan left in 1999 the Collective Security Treaty Organization (CSTO), to which Russia always attributed strategic significance. Moscow also put up with GUAM members’ unanimously acting in various international organizations (for instance, the OSCE), and taking steps according to EU and U.S. wishes, rather than the Kremlin’s. Last year, however, GUAM underwent a drastic change. First, the alliance renamed itself into the Organization for Democracy and Economic Development. Second, it decided to closely handle the energy security issues, so as to successfully counteract Russia’s oil and natural gas levers of influence. It radically changed the situation for Moscow. Two GUAM member states control the Baku-Tbilisi-Ceyhan oil pipeline, inaugurated in 2006, which became a significant alternative route for supplying Caspian oil to Europe. The Baku-Tbilisi-Erzurum natural gas pipeline is going thru Georgia and Azerbaijan. Moreover, the launch of the Odessa-Brody oil pipeline, detouring Russia thru Ukraine’s territory and leading to Poland, is just a matter of time. Thus, GUAM might eventually become a structure thru which the West will gain an alternative to Russia’s access to CIS energy resources. Meanwhile, it will strike a strong blow against the key part of current Moscow’s strategy of strengthening its influence in the world.

18 June 2007- BBC News, Baku By Matthew Collin - Leaders from four former Soviet countries eager to reduce Russian influence and forge closer links with the West are meeting in Azerbaijan. The regional organisation is named GUAM and includes Georgia, Ukraine, Azerbaijan and Moldova. Though not an anti-Kremlin alliance, this is seen as an alternative to the Russian-dominated post-Soviet group, the Commonwealth of Independent States. The politically-charged issue of energy will be high on the agenda. Each of the four countries which makes up GUAM has had disagreements with Moscow over the past year. Issues have included large price rises for Russian gas and Moscow's ban on imports of leading Georgian and Moldovan products. Wide variations The leaders of some of the GUAM countries are keen to develop regional co-operation on economic issues like pipelines which take oil and gas to Western markets, bypassing Russia. Three of the four states also have long-running problems with separatist conflicts. Talks will continue at the summit in the Azeri capital, Baku, about the creation of a joint peacekeeping force, which some hope could ultimately be deployed in the volatile breakaway regions. One of the key aims of the organisation is to deepen European integration - another tendency which is not appreciated in Moscow. GUAM calls itself the Organisation for Democracy and Economic Development. But there are wide variations in the standards of democracy in the four countries - and while some of them have rapidly developing economies, others remain poor and still need international assistance.

06.18.07 Associated Press By Aida Sultanova - Top diplomats from four ex-Soviet republics met in the Azerbaijani capital Monday on the first day of a two-day summit for a regional grouping seen as an attempt to counterbalance Russia's wide influence. The summit is the first for the organization called GUAM-Organization for Democracy and Economic Development since its four member countries - Georgia, Ukraine, Azerbaijan and Moldova - agreed last year to deepen ties and cooperation. Officials have repeatedly denied that the organization is anti-Russian, but three of the four members have had serious trade or other disputes with Moscow, and Russia is deeply enmeshed in unresolved territorial disputes in two of the countries. The organization also has garnered public support from the United States and the European Union. Several of the member countries have also expressed impatience with the Commonwealth of Independent States. The CIS is a larger grouping of ex-Soviet republics that is dominated by Russia. "Organizations are viable when they are founded on common values, on a mutual vision, on common principles. That's what sets GUAM apart from the CIS, and to those experts who would say otherwise, I would advise them to look at the common principles, the goals and the tasks that the CIS has put forth and look at .... those of GUAM," Georgian Foreign Minister Gela Bezhuashvili told reporters in Baku. Azerbaijani energy minister Natiq Aliev, meanwhile, highlighted efforts to set up a multinational consortium to extend the Odessa-Brody crude oil pipeline through Ukraine to bring Caspian Sea oil to a refinery in Plock, Poland and on to the Baltic Sea port of Gdansk. Aliev said the consortium overseeing the pipeline extension, which would provide another outlet for European-bound, Caspian Sea oil to bypass Russia, should also concern itself with the best way to get refined oil products to European and other markets. Azerbaijan has some of the largest oil reserves in the former Soviet Union; much of the oil pumped from its Caspian Sea fields now travels via a pipeline through Georgia and across Turkey to the Mediterranean port of Ceyhan. "Right now the Odessa-Brody project needs Azerbaijani oil, but for us, the main thing is the conditions by which this can be realized; that is, what can the Odessa-Brody company offer us so that it is advantageous for us not to sell oil on the Black Sea markets but to send it directly to Eastern Europe," Aliev said. "What attracts us to Odessa-Brody? There are political interests, but it's necessary that that coincides with economic (interests)," he said. Presidents of the four countries are slated to meet on Tuesday, along with presidents from Poland and Lithuania, where interest in the Odessa-Brody pipeline is also high and distrust of Moscow remains strong

Wednesday, June 13, 2007

Lukoil wins Turkmen treble

13.05.2007 - Upstream OnLine - Russian producer Lukoil has won the three blocks in the Turkmen sector of the Caspian Sea, according to reports in Turkmen state media. Turkmenistan's President Kurbanguly Berdymukhamedov held talks with Lukoil boss Vagit Alekperov and, separately, with Bob Dudley, head of BP's Russian venture TNK-BP , state media said. It was not clear whether the unnamed blocks in the Caspian were thought to contain oil or gas. "I am sure that this process will be effective as we have professionally prepared for exploiting these unique fields," Alekperov was quoted as saying on state-controlled television. State news agency Turkmenkhabarlary said the companies expressed their wish to work in Turkmenistan but gave no further details.

18 Jun 2007 APA-Economics - The GUAM Summit will mainly discuss Odessa-Brody pipeline project agreed by Ukraine, Poland, Lithuania, Georgia and Azerbaijan at Krakow Summit, Poland. Azerbaijani Energy Minister Natig Aliyev said each party wants to take a particular role in this project. “It has not yet agreed how the parties will participate in this project. Azerbaijan will be represented by the State Oil Company (SOCAR) in the project,” he noted. Natig Aliyev added that Vilnius will host the Energy Summit in September. “Odessa-Brody pipeline project will be reviewed at the Vilnius Summit. These countries take interest in our oil only at present. Likely, our gas will interest them in the nearest future,” he concluded. /APA-Economics/

14 June 2007 - APA-Economics - World Bank’s senior energy economist Bjorn Hamso will lead an energy mission to Baku on June 18. The World Bank Office in Baku told that the objective of the visit is to get acquainted with the World bank-funded Power Transmission Project and have discussion over prospects of cooperation. The Power Transmission Project will improve the reliability, quality and cost-effectiveness of the electricity supply in the country through investments improving management and performance of the high-voltage transmission network. The Project will consist of three main components. The first component, Power Transmission Management, will upgrade the electricity dispatch system in the country, which in turn will support more reliable, secure and economic operation of the electricity sector and facilitate financial settlements in a future wholesale electricity market. The second component, Transmission Network Rehabilitation, will cover priority investments in rehabilitation of high voltage transmission lines and selected high-voltage substations. Under the third component, Management Assistance, technical assistance will be provided to improve the management systems of Azerenerji and prepare the company for a future restructured energy sector. The project was approved in 2005. The total cost of the project is $55 million, of which $47 million is to come from the World Bank.

06 June 2007 - APA-Economics - 20.5 million barrels of crude oil was pumped to the world market via the Baku-Tbilisi-Ceyhan pipeline during May, said BP-Azerbaijan spokeswoman. “It is a record high we have to date achieved. We plan to pump 1 million barrels of oil per day through this pipeline next year,” she noted. Tamam Bayatli added that the average daily flow-rate via BTC is between 650,000 and 670,000 barrels at present.

01 June 2007 - APA-Economics - Baku hosted a workshop on cooperation between Azerbaijan and South Korea in electricity generation. Azerbaijan's Industry and Energy Minister Natig Aliyev said the country is carrying out comprehensive projects to increase electricity generation. "Last year we produced 23 billion kilowatts of electricity. The total capacity of our power plants to reach 10,000 megawatts of electricity in a few years. We think foreign companies will take an important part in these projects. The key issue is electricity delivery, in which we have a great amount of losses. We are working hard to implement projects on construction of high-tension lines and use of alternative energy sources," he noted. President of South Korean Electricity Association, Kim Chul, said he has led a delegation of representatives of 11 companies to Baku, adding that the workshop will contribute to expansion of cooperation between the two countries. President of Azerenergy, Etibar Pirverdiyev, added that five power plants with a combined output of 450 MWe each all based on multiple engined generating sets were constructed in regions during past two year. "Another 517 MWe power plant is under construction in Sumgait and the 1,000 MWe power station is being reconstructed in Ali Bayramli," he added. Pirverdiyev expressed sorry that South Korean companies have never taken part in bidding for energy projects in Azerbaijan, adding that the country is eager to involve foreign companies in harnessing alternative energy sources and constructing hydropower plants.

01 June 2007 - Today.Az – Azerbaijan-Germany Energy Forum will be held in Baku in July, 2007, Azerbaijani Embassy in Germany told. Azerbaijani and German Foreign Ministers promoted the organization of the forum, APA reports. The meeting of experts from both countries will debate energy issues, development of mutual cooperation in energy and security fields as well as expansion of cooperation and new projects.

01 June 2007 - Today.Az - State Oil Company's 28 May Oil and Gas Production Unit has brought Well #162 online in platform #8 in Guneshli Field in the Azerbaijani sector of the Caspian Sea. SOCAR told APA-Economics that the new well has been tied-in with the high pressure gas pipeline. On May 29 Guneshli Field produced a record of 11 million cubic meters a day against 6.9 million cubic meters in that time last year. Guneshli Field has 31 gas wells operational at present. 23 more wells are planned to be drilled within two years which will produce more than 7 million cubic meters of natural gas per day.

01 June 2007 - APA-Economics - Israel's Oil Refineries LTD has won a contest announced by the State Oil Company of Azerbaijan (SOCAR) for exportation of REBCO (Russian Export Blend Crude Oil) from Novorossiysk Port. The winner will export 1.2 million barrels of crude oil in two equal settlements on June 18-20 and June 26-30.

29 May 2007 - Upstream OnLine - BP has fixed problems at one of its two gas producing wells at the Azeri Shah-Deniz field and hopes to produce 2.7 billion cubic metres of gas this year - almost half its initial estimates, the company said today. BP had to halt output at the $4 billion project twice after its launch in December due to high pressure at the first producing well. Its partner in the project, Azeri state company Socar, has said the field would produce around 3 Bcm in 2007 instead of the planned 5 bcm due to problems. The setbacks have dashed the hopes of Georgia and Turkey to buy more Azeri gas this year to cut their reliance on Russia. Shah-Deniz resumed production after the second well was launched in February. "We have repaired Shah-Deniz's first well, which was drilled in December and had problems with pressure," Reuters quoted Bill Schrader, the head of BP in Azerbaijan, as saying. He said total output from the two wells now amounted to 5.2 million cubic metres a day. BP and the field's other operator, Norway's Statoil , plan to export gas from Shah-Deniz to Turkey via Georgia along the $1 billion Baku-Tbilisi-Erzerum pipeline. Schrader said the third well, initially planned to be launched in March, would start in the next two weeks, while the fourth was expected in the third quarter. Shah-Deniz's shareholders also include Russia's Lukoil, France's Total and Iranian and Turkish state oil companies.