Baku News

November 19, 2007 - BLOOMBERG by Lucian Kim - ASHGABAT, Turkmenistan -- Azerbaijan sent its first delegation of oil officials to Turkmenistan, opening the possibility the two Caspian Sea countries will agree to participate in a U.S.-backed natural-gas pipeline bypassing Russia. Elshad Nassirov, vice president of Socar, the Azeri state oil company, and Mukhtar Babayev, the company's head of marketing and sales, attended an energy conference in the Turkmen capital Ashgabat last week. The first visit is a "thaw" in relations between the two countries, Socar spokesman Nizametdin Guliyev said by telephone from Baku, Azerbaijan, on Friday. The two countries are in dispute over how to divide their common border in the Caspian Sea, thwarting progress on a U.S.-backed project to connect Turkmenistan to Azerbaijan via a sub-sea pipeline. The United States revived a plan to build a trans-Caspian pipeline after the death in December of Turkmen President Saparmurat Niyazov, who led the country into isolation. The new link would transport Turkmen gas to Europe through a new "southern corridor" of pipelines crossing Turkey, breaking Russian control over Central Asian gas exports. "We're optimistic the political and technical challenges will be overcome for the trans-Caspian," Reinhard Mitschek, the managing director of the Nabucco pipeline from Austria to Turkey, said in an interview in Ashgabat on Thursday. The Socar delegation will be followed early next week by a visit to Ashgabat by Azeri Deputy Foreign Minister Khalaf Khalafov, who is responsible for negotiations with Turkmenistan. Gurbanguly Berdymukhammedov, Niyazov's successor, will host Ashgabat's first summit of post-Soviet republics in a decade on Nov. 22, when prime ministers from the Commonwealth of Independent States meet. Berdymukhammedov is opening up the country to foreign investment and exploring new export routes. Since taking office in February, he has visited all of Turkmenistan's Caspian Sea neighbors except Azerbaijan. Socar made its debut in Ashgabat at a conference attended by 500 foreign government officials and executives. The official U.S. delegation included Energy Secretary Samuel Bodman, the State Department's top diplomat for Caspian energy, Steven Mann, and U.S. Ambassador to Azerbaijan Anne Derse. "We've concluded that all you need is two countries to agree," Bodman told reporters Thursday, rejecting Russian and Iranian objections that all five Caspian nations must first agree on the division of the sea's energy riches. Though it's the second-largest gas producer in the former Soviet Union, Turkmenistan has already contracted out more gas than it produces, creating the need for investment into new fields. "Pipelines naturally follow investment, they cannot come first," Bodman said. "It's clear that Turkmenistan will need new export options." The European Union wants to help Turkmenistan develop wind and solar power capacity to free up additional gas for export, Energy Commissioner Andris Piebalgs said in an interview Thursday after meeting with Berdymukhammedov.

November 19, 2007 - Moscow Times - TURKISH/GREEK BORDER - Greece and Turkey on Sunday inaugurated a pipeline that will pump natural gas from the Caspian Sea to Europe, easing the continent's dependence on Russian energy supplies and boosting ties between old rivals. Turkish Prime Minister Tayyip Erdogan and Costas Karamanlis, his Greek counterpart, shook hands in a symbolic meeting on a bridge over the river Evros, or Meric in Turkish, which separates the two countries. "We are forming a bridge as an energy transit country," Erdogan said in a speech at a ceremony held at Ipsala on the Turkish side of the border. The project marks another step forward in boosting ties between two former foes, creating energy partners out of two NATO members who came close to war as recently as 1996. The pipeline will eventually carry around 12 billion cubic meters of gas a year -- 3 bcm for Greece and the rest for re-export to Europe -- from Azerbaijan's Shah Deniz field. The European Union is backing the Greek-Turkish project as it seeks to diversify its energy suppliers and reduce its natural gas dependence on Russia, from where it buys about a quarter of its gas.

November 14, 2007 - The Associated Press - LONDON: Oil and energy company BP PLC made "a potentially significant" gas discovery in the Caspian Sea south of Azerbaijan, the company said Wednesday. Test results show sufficient gas at the Shah Deniz field for a second stage of development, BP — which is leading the development of the field — said in a statement. "Although further work is required to define this second phase it will likely be similar or larger than stage 1 — 8.6 (billion cubic meters a year)," the company said. The reservoir lies beneath an existing source at the Shah Deniz field, which lies in water depths between 50 meters and 600 meters (164 feet and 1,968 feet), some 70 kilometers (44 miles) south east of Baku. Azerbaijan's state oil company announced in September that natural gas reserves at the Shah Deniz field are believed to be nearly twice as large as previously estimated. Drilling at the field showed that total gas reserves could be as much as 1.2 trillion cubic meters of natural gas and 240 million tons of gas condensate, the State Oil Company of Azerbaijan said then.

November 14, 2007 – LONDON - BP PLC made "a potentially significant" gas discovery in the Caspian Sea south of Azerbaijan, the British energy company said today. Test results show sufficient gas at the Shah Deniz field for a second stage of development, BP said in a statement. BP is leading the development of the field, and said it appears the second phase "will likely be similar or larger than stage 1" at 8.6 billion cubic meters a year. The reservoir lies beneath an existing source at the Shah Deniz field, which lies in water depths between 164 feet and 1,968 feet, some 44 miles south east of Baku. Azerbaijan's state oil company announced in September that natural gas reserves at the Shah Deniz field are believed to be nearly twice as large as previously estimated. Drilling at the field showed that total gas reserves could be as much as 1.2 trillion cubic meters of natural gas and 240 million tons of gas condensate, the State Oil Company of Azerbaijan said then. That was nearly double the recent reserve estimate by BP — about 640 billion cubic meters. BP shares gained 2.7 percent to 598.5 pence ($12.36) in trading Wednesday in London. The consortium it leads developing Shah Deniz also includes Norway's Statoil ASA, France's Total SA and Russia's OAO Lukoil.

08 November 2007 - Upstream OnLine - Ankara may increase the amount of gas it plans to consume from a pipeline running through Turkey from the Shah Deniz gas fields in Azerbaijan to Greece, a senior energy ministry official said. Turkey has been promised 15% of the gas when the pipeline starts operation. "The priority is that the gas taken through this pipeline will be used to meet domestic demand. It was initially planned that (Turkey) would take 15% of the gas from this pipeline, but this may be increased," the energy ministry official told Reuters. Ministers from Turkey, Greece and Italy signed an agreement in July on construction of the pipeline that will connect Azerbaijan's Shah Deniz gas to Italy and is expected to cost €400 million ($549 million). The South European gas pipeline deal, under which Turkey will sell gas, is the second major agreement the country has signed recently to secure its role as a regional energy hub and natural gas trader. An increase in gas supplies is more likely if more of the pipeline's capacity is used. "The current capacity of the pipeline is (between) 20 billion (and) 22 billion cubic metres, while the amount which is taken through it is 6.6 Bcm," the official said. The second, $10 billion phase of Shah Deniz, Azerbaijan's biggest gas field, has been delayed by one year to 2013 as the project faces development problems. Turkey is trying to find more sources to fill the pipeline and talks are being held on carrying Turkmen, Kazakh, Iranian and Azeri gas to Europe via the BTE pipeline between Azerbaijan and Turkey, the official said. "Turkmen and Kazakh natural gas may be transported to Europe through this pipeline. In addition, Azeri gas may be transported to the West through this line in the second phase of Shah Deniz," he said.

November 7, 2007 - The Moscow Times - BAKU, Azerbaijan -- Azeri authorities said Tuesday that they had detained eight Islamic radicals, including an Arab man with apparent ties to al-Qaida, and seized a large weapons cache. The announcement came a week after officials said security forces had thwarted a plot by Islamic militants to attack the U.S. and British embassies and other government buildings. The Arab man -- detained over the weekend in Sumgait, the country's third-largest city -- was identified as Abu Jafar. His nationality was not released. The other seven have Azeri-sounding names, and they were said to have fought in conflict zones abroad. The fighters had maps of the town, the National Security Ministry said. Ministry spokesman Arif Babayev said secret agents had uncovered a cache containing four crates of submachine guns, three pistols, hundreds of rounds, a dozen hand grenades and 1.75 kilograms of explosives. An official statement gave no specific grounds for the claim of al-Qaida links. It said Abu Jafar was also connected with a group called Al-Jihad. An additional seven suspected associates of Abu Jafar were detained last month, but he escaped an initial attempt to capture him on Oct. 10, the ministry said. It did not accuse him of any specific terrorist plans. Azeri officials and law enforcement agencies declined to give any further details.