Azerbaijan would support further OPEC balancing actions

21 Oct 2017   Azerbaijan

Azerbaijan is ready to get in line behind any extraordinary effort needed to stabilize the market if a plan develops, its energy minister said Friday. Members of the Organization of Petroleum Exporting Countries implemented an agreement in January to sideline about 1.8 million barrels of oil per day from the market in an effort to drain the surplus on the five-year average for global crude oil supplies. The effort draws on the support from non-OPEC members, like Russia and Azerbaijan. “The situation on the oil market has stabilized recently and a certain balance has been reached,” Azeri Energy Minister Parviz Shahbazov was quoted by Russian news agency Tass as saying. “If a new […]

BP sees strong profits in renewed Azeri oil contract

15 Sep 2017   Azerbaijan

A deal by BP to extend oil production-sharing in Azerbaijan by 25 years is profitable at current oil prices even after paying a signing bonus and cutting foreign companies’ stake in the project, Chief Executive Bob Dudley said. The pact between a BP-led consortium and Azerbaijan to continue developing the Azeri-Chirag-Guneshli (ACG) offshore fields until 2050 comes as the oil and gas company prepares to boost production sharply by the end of the decade. Under the deal, BP and its partners cede part of their stake to Azerbaijan’s national energy company SOCAR and pay the government a $3.6 billion signing bonus. BP’s stake falls to 30.37 percent from 35.8 percent but it will remain the operator. The initial agreement, signed in 1994, was dubbed by […]

Billions more barrels of oil possible from Azerbaijan

15 Sep 2017   Azerbaijan

A contract for the largest oil complex offshore Azerbaijan could lead to billions of dollars in investments and billions more in oil barrels, analysis finds. British energy company BP led a consortium of international partners in extending a contract with the Statoil Oil Company of the Azerbaijan Republic for the Azeri-Chirag-Gunashli field in the Azeri waters of the Caspian Sea. Since the initial production sharing contract was signed in 1994, the oil field has produced more than 3 billion barrels of oil and delivered more than $125 billion in net profits to Azerbaijan. Under the terms of new contract, SOCAR takes another 11 percent stake in the development to 25 percent and the international partners pay $3.6 billion to an […]

Exclusive: BP’s stake in giant Azeri oilfields set to fall: sources

9 Sep 2017   Azerbaijan

BP’s stake in Azerbaijan’s vast oilfields is expected to shrink under a new production-sharing agreement with state energy company SOCAR, two industry sources familiar with the talks told Reuters. Azerbaijan plans to sign a new contract with BP next week on development of the giant Azeri-Chirag-Guneshli (ACG) oilfields that will run until 2050. The fields are the largest oilfields in the Azerbaijan sector of the Caspian basin. An existing deal is due to expire in 2024 and a BP-led consortium and SOCAR signed a letter of intent in December to continue development of the oilfields until 2050 in a move to unlock billions of dollars of fresh investment. “According to preliminary information, SOCAR will increase its share at the expense of a share reduction of other companies, including BP,” an industry source aware of the negotiations told Reuters. Another industry source, who also is familiar with […]

Blast hits Azeri gas pipeline near Baku: Ministry

2 Jan 2017   Azerbaijan

An explosion has occurred at a gas pipeline near Azerbaijan’s capital Baku early on Monday, the country’s Emergencies Ministry said, the second such incident in a week. An explosion hit the Baku-Alyat pipeline at around 0700 local time (0300 GMT), causing a fire that the ministry said had been contained. It gave no reason for the accident and there were no reports of casualties. Last week, the same section of the pipeline was hit by explosion that led to a fire. (Reporting by Nailia Bagirova; writing by Maria Kiselyova; editing by Louise Heavens)

A Nation That Capped Year of Devaluations in 2015 Is at It Again

29 Nov 2016   Azerbaijan

Azerbaijan can’t seem to turn the page on what’s been a year of currency jitters following its 50 percent devaluation in 2015. Dollars are again in short supply in Azerbaijan’s capital, raising the specter of another crisis three months after previous bouts of currency shortage undermined banks and fanned consumer prices. Only one of the nine banks visited in central Baku on Monday sold dollars. The manat, which suffered the world’s biggest drop in 2015, has depreciated against the dollar for seven straight weeks, extending its decline to more than 11 percent since the central bank loosened its control over the exchange rate a year ago. The third-biggest crude producer in the former Soviet Union caved to the crash in oil by following countries including Kazakhstan and Argentina and abandoning its peg to the dollar last December. While currencies in commodity-producing nations from Russia to South Africa have benefited […]

Azerbaijan signals OPEC wants big cuts from non-OPEC producers

24 Nov 2016   Azerbaijan, OPEC

OPEC may ask oil producers outside the cartel to make big cuts in output, Azerbaijan said on Thursday, highlighting the challenges in striking a deal as the two sides enter the final stages of talks aimed at cutting production to stabilize prices. The oil minister of Azerbaijan, which is not a member of OPEC, was quoted in a newspaper as saying the cartel may want non-OPEC producers to cut output by as much as 880,000 barrels per day (bpd). However, an OPEC source told Reuters the group had yet to decide on the final figures to be discussed on Nov. 28, when OPEC and non-OPEC experts meet in Vienna. “It could be expected that OPEC members may ask non-OPEC countries to cut production volumes for the next […]

Exclusive: New Caspian fields to add at least 200,000 bpd to oil market by year-end

 Two major Caspian Sea oil fields scheduled to come on stream this year will together produce at least 200,000 barrels of crude per day (bpd) by the end of 2016, according to industry sources and a loading schedule seen by Reuters. The production plans, for the Kashagan field in Kazakhstan’s sector and Lukoil’s Filanovsky field in the Russian sector, are the clearest sign yet that significant volumes from the projects will be going imminently on to a world market that already has a glut of supply, possibly pushing down prices. By the end of next year, according to targets previously announced by the fields’ operators, Kashagan and Filanovsky will between them produce about 500,000 bpd, equivalent to about 0.5 percent of […]

BP reaches new heights offshore Azerbaijan

18 Aug 2016   Azerbaijan

A BP subsidiary working in the Caspian Sea announced it reached a landmark for oil pulled from Azeri waters with its 3 billionth barrel. BP’s regional office for Azerbaijan, Georgia and Turkey began work at the supergiant Azeri-Chirag-Gunashli oil field in the Caspian Sea in 1997 and, more recently, started operations at the West Chiraq platform tied to the field. Gordon Birrell, the regional president for BP, said in a statement reaching 3 billion barrels of oil produced from the field “is a significant milestone for both BP and for Azerbaijan.” Four years ago, the government in Azerbaijan criticized BP’s role in the ACG complex, complaining production during the first half of 2012 was […]

Russia sees tighter energy ties with Iran, Azerbaijan

10 Aug 2016   Azerbaijan, Iran, Russia

Projects meant to exploit the strategic position of the Caspian Sea and its oil and natural gas are national priorities, Azerbaijan, Iran and Russia said. The Iranian and Russian presidents met with their Azeri counterpart in the nation’s capital, Baku, to review trilateral relations. All three are energy rich and positioned to take advantage of opportunities in the Caspian Sea. In a statement, Russian President Putin said the nations could work together to create a regional counterpart to Western trade corridors. “In the energy industry, priority should be given to the implementation of projects for the exploration and development of oil and gas deposits, first of all in the Caspian region,” he said. […]

Turkey-Russia Rapprochement Spells Bad News for Azerbaijan

10 Aug 2016   Azerbaijan, Russia

Russia and Turkey signaled that they would resuscitate the development of a natural-gas pipeline between them, potentially undermining European efforts to reduce reliance on Russian energy with fuel piped in from Azerbaijan. Presidents Vladimir Putin and Recep Tayyip Erdogan, in a meeting Tuesday in St. Petersburg, indicated the way was clear again for the pipeline known as TurkStream, which would bring gas from Siberia under the Black Sea. The project had been sidelined after a Turkish jet shot down a Russian warplane near the Syrian border in November, causing a diplomatic rupture. When complete, the pipeline would have the capacity to pump more natural gas into Turkey than it could consume, making the country a potential hub for sending Russian gas into Europe. That would be a blow for Azerbaijan. President Ilham Aliyev has said he wants to make his country a major gas exporter. The country needs to […]

Exclusive: BP-Exxon impasse blocks renewal of giant Azeri oil deal – sources

2 Jul 2016   Azerbaijan

U.S. oil major Exxon Mobil ( XOM.N ) and Britain’s BP ( BP.L ) are at loggerheads over a giant oil production deal with Azerbaijan, blocking renewal of what was once called “the contract of the century”, three high-level industry sources told Reuters. BP, which operates the Azeri-Chigar-Guneshli (ACG) fields in the Caspian Sea and relies on them for a tenth of its global output, has tentatively agreed terms with the Azeri government on extending the 30-year contract, they said. But Exxon, which gets around one percent of its hydrocarbon production through its stake in the ACG consortium, has been holding out for a better deal since the halving of world oil prices in 2014. The result is deadlock in talks over a project that may produce another $100 […]

Azerbaijan on cusp of gas greatness

30 Jun 2016   Azerbaijan

Though some geopolitical conflicts may impede the progress, Azerbaijan is positioned to become one of the region’s key players in natural gas, analysis finds. A review from the U.S. Energy Information Administration finds Azerbaijan has been a legacy oil producer, with some fields in production since the early 1950s. Natural gas reserves, meanwhile, exceed 30 trillion cubic feet and most of that is in the Shah Deniz field, tapped to feed the European market . “Although historically an oil producer, Azerbaijan’s importance as a natural gas producer and exporter is growing,” EIA’s analysis said. A series of pipelines dubbed the Southern Corridor are planned for delivery of natural gas from the Shah Deniz reserve basin in the Azeri waters of the Caspian Sea. More […]

BP hands out more contracts for Azeri gas project

4 May 2016   Azerbaijan

A BP subsidiary trying to pull gas from offshore Azerbaijan said it doled out a $1.5 billion contract to help get gas flowing within the next two years. BP, working on behalf of a consortium managing the Shah Deniz natural gas field in the Caspian Sea, said it awarded the contract to a build a vessel that will transport and install the production systems for the project. The bulk of the contract goes to Italian contractor Saipem, which in April secured a contract to help build the Trans-Adriatic natural gas pipeline from offshore Azerbaijan to Italy. “This major contract award for the installation of subsea production systems underpins our commitment to deploy […]

Georgia: Energy Minister Signs A Deal With Azerbaijan’s State-Owned Oil Company

5 Mar 2016   Azerbaijan, Georgia

Georgian Energy Minister Kakha Kaladze struck a deal with Rovnag Abdullayev, the president of the State Oil Company of Azerbaijan Republic (SOCAR), Civil Georgia reported March 4. Under the terms of the new deal, which is an amended version of a 2011 agreement, SOCAR will continue to supply Georgia with natural gas, increasing its exports by 500 million cubic meters in the coming years to keep pace with Georgia’s growing demand. In light of the deal, Georgia will not pursue talks with Russia’s Gazprom to secure additional imports, Kaladze said.

IMF and World Bank move to forestall oil-led defaults

28 Jan 2016   Azerbaijan, Prices

Ilham Aliyev, Azerbaijan’s president Officials from the International Monetary Fund and the World Bank are heading to Azerbaijan to discuss a possible $4bn emergency loan package in what risks becoming the first of a series of bailouts stemming from the tumbling oil price . The Baku visit, which follows a currency crisis triggered by the collapse in crude, comes amid concern at the two global institutions over emerging market producers from central Asia to Latin America. The fund and the bank have also been monitoring developments in other oil-producing countries such as Brazil, which is now mired in its worst recession in more than a century , and Ecuador. The oil-driven crisis in Venezuela has even raised the possibility of repaired relations between the fund and Caracas, a city IMF staff last visited more than a decade ago. Azerbaijan depends on oil and gas for 95 per cent of […]

Lenders back Azeri gas project with European focus

8 Aug 2015   Azerbaijan

Asian and European lenders unveiled a $1 billion finance package Friday to help fund an Azeri natural gas field meant to diversify the European energy sector. The Asian Development Bank and the European Bank for Reconstruction and Development, with support from the Black Sea Trade and Development Bank, announced funding support for the second stage of the Shah Deniz natural gas field off the coast of Azerbaijan. The ADB said the project is “crucial” for energy security in the European economy. “This project is one of the European Union’s highest priorities for the energy sector,” EBRD Managing Director for Energy and Natural Resources Riccardo Puliti said in a statement. “It is key for energy security because it diversifies routes and […]

War Haunts Russia’s Southern Fringe, Threatening Pipelines

27 Apr 2015   Azerbaijan

 Russia’s southern periphery is closer to open war than at any time since the 1990s. Hostilities between Azerbaijan and Armenia are mounting 21 years after a cease-fire froze a conflict that flared in the dying days of the Soviet Union. During the relative calm, companies including BP Plc poured billions of dollars into producing oil and gas in Azerbaijan and building pipelines to link the country with southern Italy. The upswing in violence now threatens to put some of those investments at risk and destabilize a region that separates Russia from Turkey and Iran. A May 3 election looming in Nagorno-Karabakh, the region Armenians took over in the war more than two decades ago, may trigger a wider confrontation, the Royal Bank of Scotland Group Plc said. The vote “could further escalate the tensions, increasing the risks […]

Gas key to EU ties with Azerbaijan

25 Mar 2015   Azerbaijan

Development of a natural gas pipeline network from Azerbaijan is one of the most important aspects of bilateral ties, a European Union report said Wednesday. The European Union published a series of reports Wednesday on the neighborhood policy for Eastern European and Central Asian countries, some of which are former Soviet republics. The report for Azerbaijan said the country’s economy was stable and diverse in part because of growth outside of the energy sector, which nevertheless underpinned bilateral ties . Azerbaijan is rich in natural gas reserves, which the EU sees as a source of diversification for an energy sector dominated in large part by Russia. “The commitment for the implementation of the Southern Gas Corridor continued to be of utmost importance for the EU-Azerbaijan dialogue,” the country report […]

BP closer to bringing Azeri natural gas to Europe

21 Nov 2014   Azerbaijan

 A Canadian pipeline company said it secured a $200 million contract from BP to help develop the second phase of the Shah Deniz gas field off the Azeri coast. ShawCor Ltd., which has headquarters in Toronto, said its pipe coating division secured the contract for work at a plant in Baku , the capital of Azerbaijan. The contract is the second development contract awarded by BP for work in Azerbaijan this month. Energy services company Emerson Process Management secured a $40 million contract from BP to provide control and safety systems for an onshore terminal associated with Shah Deniz BP has awarded more than $1 billion in development contracts since selecting the Trans-Adriatic pipeline as its option for Shah Deniz last year. TAP […]

Russia doesn’t fear Azeri gas, scholar says

21 Oct 2014   Azerbaijan, Russia

Trade deals between Russia, Turkey and Azerbaijan should ease Kremlin concerns about Baku’s energy agreements with Europe, an Azeri scholar said. Elhur Soltanov, a foreign policy export at Azerbaijan Diplomatic Academy, told Turkish newspaper Hurriyet trilateral relations between Baku, Ankara and Moscow are a diplomatic success . “This interdependence, with all the interrelated energy and trade deals, eases Russia’s concerns over Azerbaijan’s energy deals,” he said Monday. A European economy fearful that conflict in Ukraine could jeopardize the gas supplies Russia sends through the former Soviet republic has looked to Azerbaijan as a source of energy security. Last week, the State Oil Co. of Azerbaijan Republic announced it signed contracts in Turkey for the construction of the Trans-Anatolian natural gas pipeline . TANAP will transport natural gas from the Shah Deniz complex […]

Azeri gas line contracts signed in Turkey

16 Oct 2014   Azerbaijan

The State Oil Co. of Azerbaijan Republic announced it signed contracts in Turkey for the construction of the Trans-Anatolian natural gas pipeline. SOCAR President Rovnag Abdullayev signed the documents in Ankara with Turkish Prime Minister Ahmet Davutoglu and Turkish Energy Minister Taner Yildiz . The contract calls for a consortium of Turkish companies, and one Chinese contractor, to provide pipes for the TANAP pipeline . “TANAP is not only an energy project, but also a huge peace project,” the Turkish prime minister said in a statement Tuesday. “It builds a peace bridge between the Balkans and Caucasus.” TANAP will transport natural gas from the Shah Deniz complex off the coast of Azerbaijan through Turkey to the Greek border. British energy company BP leads the group that […]

New War Risk on Russia Fringes Amid Armenia-Azeri Clashes

4 Aug 2014   Azerbaijan

The leaders of Armenia and Azerbaijan plan to meet this week in a bid to defuse escalating tensions between the two countries after at least 18 soldiers were killed in the worst clashes in two decades. The fighting in the past week in the disputed region of Nagorno-Karabakh has been the deadliest since the two former Soviet states signed a cease-fire in 1994. Armenian President Serzh Sargsyan will hold talks with his Azeri counterpart Ilham Aliyev in the Russian city of Sochi on Aug. 8-9, Armenian Prime Minister Hovik Abrahamyan said on the government’s website. “We hope that serious arrangements will be reached during the meeting,” Abrahamyan said. “We are not afraid of war, I just think it is not clever to solve problems with wars in the 21st century.” The skirmishes between the South Caucasus countries, which border Turkey and Iran , flared amid the worst geopolitical standoff […]

Europe leans on Azerbaijan for gas security

16 Jun 2014   Azerbaijan

Building a gas corridor from Azerbaijan is just as as it is Azeri economic development, a top European leader said in Baku. European Commission President Jose Manuel Barroso spoke before an audience at the Azerbaijan Diplomatic Academy University, saying the country has undergone “radical and rapid change” since it gained independence from the Soviet Union in 1991. European leaders have said the huge volumes of natural gas off the coast of the former Soviet republic could help break Russia’s grip on the European energy sector. The so-called Southern Corridor envisions a series of pipelines from Caspian reserves to the European market. “This is a project that can encourage greater economic cooperation, improve energy security and create over 30,000 jobs in all countries along the corridor,” Barroso said Saturday. British energy company BP is leading efforts to draw natural gas from the Shah Deniz gas field off the coast of […]