JULY 30 2013 (The Conway Bulletin) — Azerbaijani state energy company SOCAR (20% stake), BP (20%) and Total (10%) joined the consortium developing the Trans Adriatic Pipeline (TAP) that will pump gas from the Azeri sector of the Caspian Sea to Italy, TAP said. The other members of the consortium are Statoil (20%), Fluxys (16%), E.ON (9%) and Axpo (5%).
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(News report from Issue No. 146, published on Aug. 5 2013)
JULY 8 2013 (The Conway Bulletin) — Azerbaijan state energy company SOCAR and Russian pipeline monopoly Transneft are negotiating on re-starting oil shipments along the Baku-Novorossiysk pipeline, media reported.
This is probably more significant for Azerbaijan-Russia relations than to energy supplies.
With construction finished in 1997, the Baku- Novorossiysk pipeline was one of the early post-Soviet Union pipelines. It runs 1,330km from Baku to the Black Sea port of Novorossiysk. From there the oil is shipped on to Europe. Volumes along the route, though, have been declining as Azerbaijan has worked to open up alternative routes to Europe, including the Baku-Tbilisi-Ceyhan pipeline.
Last year, the Baku-Novorossiysk oil pipeline pumped only about 8% of Azerbaijan’s oil to its export markets.
In May 2013, throughput along the Baku-Novorossiysk pipeline stopped altogether. Both sides were losing money on the deal. There wasn’t enough volume for the Russians and the price for its oil was too low for the Azerbaijanis.
It may be economically more efficient for the pipeline to stay idle but politically it needs to re-open.
Russia has approved a major arms deal with Azerbaijan, executives from Rosneft, the Russian state energy company, have visited Baku and senior Russian politicians have talked about a strategic deal between the two countries.
Re-starting an oil pipeline between the two countries may fit the pattern of increasingly close cooperation.
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(News report from Issue No. 143, published on July 15 2013)
MAY 28 2013 (The Conway Bulletin) — Austria’s OMV has agreed to sell a 9% stake in the company planning to build the proposed Nabucco gas pipeline from the Shah Deniz II gas field in Azerbaijan to Europe. France’s GDF Suez agreed to buy the stake for an undisclosed amount. The consortium developing Shah Deniz II will decide whether to use Nabucco or a rival to deliver gas to Europe.
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(News report from Issue No. 137, published on June 3 2013)
MAY 17 2013 (The Conway Bulletin) — SOCAR, Azerbaijan’s state-owned energy company, said it would borrow $4b to part-finance an ambitious new oil refinery in Turkey, only 10 days after figures showed slowing output at its most important oil field.
The refinery, to be built in western Turkey, will be operational by 2016 and produce 10m tonnes of oil a year. The $4b loan will cover around two-thirds of the construction costs.
SOCAR will fund the rest of the project itself.
Azerbaijan’s wealth is anchored to its energy industry and the refinery plan projects both a confidence about the future and an understanding of its most important market — Europe.
The importance of Europe as Azerbaijan’s main market was underlined when the European Commission approved plans to build a pipeline to pump gas from Azerbaijan across the Adriatic to Italy, on May 17.
A few days earlier, though, on May 7, BP announced that production at the main oil field in the Azeri sector of the Caspian Sea, Azeri-Chirag-Guneshli (ACG), was still falling. Bloomberg reported that production at ACG, which produces three-quarters of the country’s oil, had dropped to 662,000 barrels per day in Q1, a fall of 8.4% from a year earlier.
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(News report from Issue No. 135, published on May 20 2013)
APRIL 6 2013 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev made one of his regular visits to Beijing to meet his Chinese counterpart Xi Jinping. During the visit, Mr Nazarbayev agreed a number of bilateral deals including an extension, media reported, to a pipeline pumping oil from Kazakhstan to China.
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(News report from Issue No. 131, published on April 12 2013)
MARCH 30 2013 (The Conway Bulletin) — As if waking from a deep slumber and noticing nearby riches to grab, India is slowly buying up energy resources in the Caspian Sea region.
On March 29, Sudhir Vasudeva, head of India’s state-owned energy company ONGC, said that its subsidiary ONGC Videsh had completed the purchase of a 2.72% stake in Azerbaijan’s Azeri-Chirag-Guneshli oil fields in the Caspian Sea and a 2.36% stake in the Baku-Tbilisi-Ceyhan pipeline.
ONGC Videsh bought the stakes from the US oil company Hess for $1b. The deal was announced last year. This deal is important as it marks India’s entry into the Caspian Sea energy race.
India needs more energy and has announced an ambitious expansion plan to match; Central Asia and South Caucasus region is an obvious place to expand in to.
But India is playing catch-up. Chinese, Russian and Western energy companies are already entrenched in the region.
That said, India has unveiled impressive plans. It is pushing to build a pipeline from gas fields in Turkmenistan across Afghanistan to south Asia and it has agreed a $5b deal to buy an 8.4% stake in Kashagan, in the Kazakh sector of the Caspian Sea, from US’s Conoco Phillip.
Kazakhstan has yet to approve the Kashagan deal but India’s Caspian Sea intentions are clear.
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(News report from Issue No. 130, published on April 5 2013)
JAN. 31 2013 (The Conway Bulletin) – Azerbaijan’s government approved the purchase by India’s state-owned energy company ONGC Videsh, of a 2.72% stake in the Azeri-Chirag-Guneshli (ACG) oil fields and a 2.36% stake in the Baku-Tbilisi-Ceyhan (BTC) pipeline from the US’s Hess for $1b. Both ACG and BTC are Azerbaijani flagship projects.
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(News report from Issue No. 122, published on Feb. 1 2013)
DEC. 4 2012 (The Conway Bulletin) – PMs of members of the Russia, China lead Shanghai Cooperation Organisation (SCO), which focuses on Central Asia, met in Bishkek. China’s Wen Jiabao also met privately with Kyrgyz PM, Zhantoro Satybaldiyev. They discussed China’s future investment in Kyrgyzstan, and a potential trans Central Asia pipeline.
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(News report from Issue No. 116, published on Dec. 7 2012)
NOV. 7 2012 (The Conway Bulletin) – BP, Statoil and Total have bought stakes in the proposed TANAP pipeline that will pump gas from Azerbaijan to Turkey, media reported. The ultimate market is the EU which has been trying to reduce its dependency on Russia for gas supplies. BP and Statoil will each buy 12% stakes in TANAP and Total will buy 5%.
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(News report from Issue No. 112, published on Nov. 9 2012)
OCT. 14 2012 (The Conway Bulletin) – Turkmenistan’s minister for oil and gas, Kakageldy Abdullayev, told reporters at an energy forum that construction of the TAPI pipeline would begin in 2017. TAPI aims to pump gas from Turkmenistan across Afghanistan to markets in Pakistan and India. Bangladesh has again stated it would like to join the project.
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(News report from Issue No. 109, published on Oct. 19 2012)
