Tag Archives: Azerbaijan

Russia offers Azerbaijan a discount for oil transit

FEB. 24 2014 (The Conway Bulletin) — Looking to boost the flow of oil through its Soviet-era Baku-Novorossiisk pipeline, Russian pipeline monopoly Transneft has offered Azerbaijan a reduced price for using the route, media reported.

Azerbaijan and Russia have been arguing about the price of oil shipments through the Baku-Novorossiisk pipeline over the past few years. Last year, as the row intensified, Russia said it would close the pipeline altogether.

The root cause of the problem is that Azerbaijan has increased the number of export routes it has serving its energy producing fields in and around the Caspian Sea.

Under a 2013 deal Azerbaijan was supposed to pump 5m tonnes of oil through the 1,330km Baku-Novorossiisk pipeline every year at a cost of just under $16/tonne. This volume never happened and the through-flow of oil from Baku to Novorossiisk dropped to about 1.75m tonnes.

At this volume, Transneft had said it would charge $21/tonne of oil, a price the Azerbaijanis quickly rejected.

The row over oil deliveries from Baku to Novorossiisk has strained relations between the two countries. Azerbaijan has still to respond to Russia’s new offer.

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(News report from Issue No. 173, published on Feb. 26 2014)

Honduras backs Azerbaijan over Nagorno-Karabakh

FEB. 24 2014 (The Conway Bulletin) — Azerbaijan chalked up a diplomatic success when the government of Honduras in Central America passed a motion earlier this year condemning Armenian aggression in Nagorno-Karabakh, Azerbaijani media reported. Azerbaijan fought a war over Nagorno-Karabakh with Armenia in the early 1990s. Watch out for fresh investment in Honduras by Azerbaijan.

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(News report from Issue No. 173, published on Feb. 26 2014)

Another immolation takes place in Azerbaijan

FEB. 13 2014 (The Conway Bulletin) — A 41-year-old man set himself alight in Azerbaijan, Radio Free Europe/Radio Liberty reported, the fifth self-immolation in the country since December. The man, Huseyn Mammadov, reportedly set himself alight outside the interior ministry office in Nakhchivan region after his taxi permit had been withdrawn by officials.

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(News report from Issue No. 172, published on Feb. 19 2014)

Azerbaijan expands Georgian pipeline

FEB. 17 2014 (The Conway Bulletin) — Azerbaijan’s state oil company SOCAR said that it was expanding its pipeline network in Georgia by 750km. This expansion, the company said, would boost its customer base by 22,000. SOCAR currently operates 1,179km of gas pipeline in Georgia and has 37,500 subscribers.

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(News report from Issue No. 172, published on Feb. 19 2014)

Homeowners rally against the government in Azerbaijan

FEB. 16 2014 (The Conway Bulletin) — Around 1,000 people protested in Azerbaijan against government compensation for homeowners due to lose their home as part of an urban re-generation scheme. The authorities in Azerbaijan want to demolish and re-build parts of Baku but residents say they are being offered only a fraction of the market price for their homes.

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(News report from Issue No. 172, published on Feb. 19 2014)

Georgian president visits Azerbaijan

FEB. 12 2014 (The Conway Bulletin) — Georgian President Giorgi Margvelashvili made his first trip to Baku since taking over the presidency in November. At a press briefing after meeting with Azerbaijan’s President Ilham Aliyev, Mr Margvelashvili said Georgia and Azerbaijan were part of a bridge linking Asia and Europe.

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(News report from Issue No. 172, published on Feb. 19 2014)

Azerbaijan and Iran sign transit deal

FEB. 14 2014 (The Conway Bulletin) — Azerbaijan and Iran signed a deal to improve cargo and passenger communication between the two countries. The deal may only be a minor one but any agreement between these two neighbours is important. Tension between the two sides has been rising over the past two or three years.

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(News report from Issue No. 172, published on Feb. 19 2014)

Oil output falls in Azerbaijan

FEB. 13 2014 (The Conway Bulletin) — A chastised BP said oil output at the Azeri-Chirag-Guneshli (ACG) oil fields in the Azerbaijani sector of the Caspian Sea fell last year by nearly 2%. ACG has been vital to Azerbaijan’s energy-powered boom and BP has been under pressure to reverse the decline.

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(News report from Issue No. 172, published on Feb. 19 2014)

Azerbaijan accuses the US of spying

FEB. 14 2014 (The Conway Bulletin) –Azerbaijan accused the United States of spying after two US officials visited a high-profile Azerbaijani opposition journalist.

Khadija Ismayilova, a journalist for US-funded Radio Free Europe/Radio Liberty said the authorities had accused her of giving dossiers on opposition politicians and other prominent figures to US government officials masquerading as US senators.

The accusations are important for a handful of reasons.

Firstly, it betrays Azerbaijan’s nervousness and paranoia. The US is meant to be an increasingly close post-Soviet ally and yet here it is accused of spying. The United States denied accusations that it had been spying on Azerbaijan.

Secondly, the accusations also have the tinge of a vendetta. The authorities in Azerbaijan dislike Ms Ismayilova and her work.

Ms Ismayilova is a relatively widely known investigative journalist who has revealed alleged corrupt government schemes. In 2012, video and pictures of Ms Ismayilova having sex appeared on the internet. They were taken with a camera secretly installed in her home. She accused the authorities of blackmail and intimidation.

(News report from Issue No. 172, published on Feb. 19 2014)

Oil output in Azerbaijan continues to fall

FEB. 13 2014 (The Conway Bulletin) — Azerbaijan’s key oil field complex, Azeri-Chirag-Guneshli (ACG), produced nearly 2% less oil in 2013 than in 2012, BP said.

ACG forms the backbone of Azerbaijan’s oil output and, although gas is becoming increasingly important, it is still vital to the national economy. In other words, BP’s figures are bad news.

It said that output at ACG dropped to 32.2m tonnes last year from 32.9m tonnes in 2012. In 2010, ACG had produced 40.6m tonnes of oil — nearly 25% more than it did in 2013.

This is doubly galling because Azerbaijani president Ilham Aliyev had personally told BP to stop the output drop. In response BP committed millions on updating infrastructure and also said that they would replace management.

This had appeared to have made the difference and BP even said that the decline had been stemmed. That, though, now appears premature. There is a slight plus side, though. BP said that although overall oil production at ACG fell last year, total oil and condensate production rose 0.4% to 43.5m tonnes. Condensate is a mixture of hydrocarbons.

BP also said that exports of barrels of oil had also actually risen from ACG to 286.2m from 283.9m, mostly through the Baku-Tbilisi-Ceyhan pipeline.

While Azerbaijan ramps up gas production, oil exports from ACG remain its main cash earner. With this in mind, BP has committed to spending another $2.1b on ACG this year.

(News report from Issue No. 172, published on Feb. 19 2014)