JULY 9 2013 (The Conway Bulletin) — Norwegian energy company Statoil wants to re-start exploration at the Zafar-Mashal oil and gas bloc in the Azerbaijani sector of the Caspian Sea, media reported. The Zafar-Mashal bloc has been mothballed since the mid-2000s when ExxonMobil and ConocoPhillips withdrew from the field because it was commercially unviable.
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(News report from Issue No. 143, published on July 15 2013)
JULY 8 2013 (The Conway Bulletin) — Azerbaijan’s government voted to scrap import duty and VAT on a series of oil-based products used in the construction and road-building sectors, media reported. These products include petroleum bitumen which is used as asphalt to build roads. Duties on these products are due to be scrapped on Jan. 1 2014.
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(News report from Issue No. 143, published on July 15 2013)
JULY 10 2013 (The Conway Bulletin) — Azerbaijan will use $5b from its sovereign wealth fund to help young people get mortgages, a senior official from the presidential administration said. The announcement, coming shortly before a presidential election, could help young people buy a house or an apartment in Baku, an increasingly expensive property market.
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(News report from Issue No. 143, published on July 15 2013)
JULY 15 2013 (The Conway Bulletin) — Azerbaijanis, apparently, feel that the government is their best defence against corruption in the public sector.
In a new global corruption survey Transparency International asked roughly 1,000 people in Azerbaijan between September 2012 and March 2013 for their impression of official corruption.
The results were, broadly, positive. Of the interviewees, 41% said that corruption amongst officials was improving in Azerbaijan, 32% said it was roughly staying the same and 27% said it was getting worse.
Georgia, by contrast though, has been the region’s standard bearer for combating corruption and 70% of respondents in the Transparency International survey said that official corruption had decreased.
Back in Azerbaijan, nearly 60% of respondents thought corruption was a serious problem in the public sector but 70% also said government action was reasonably effective in dealing with this vice.
The institutions that respondents thought were most corrupt were the judiciary, medical services and the police. In each case over 40% of respondents thought these institutions were corrupt.
It may just be a snapshot but Transparency International’s Global Corruption Barometer of Azerbaijan provides an interesting psychological insight.
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(News report from Issue No. 143, published on July 15 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)
JULY 2 2013 (The Conway Bulletin) — Azerbaijan’s opposition coalition announced that well-known screenwriter Rustam Ibragimbekov would be its candidate in October’s presidential election. Mr Ibragimbekov is best known for co-writing the script for the 1994 Russian film “Burnt by the sun” which won an Oscar for best foreign film.
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(News report from Issue No. 142, published on July 8 2013)
JUNE 25 2013 (The Conway Bulletin) — Armenia’s national security service arrested three people and accused them of spying for Azerbaijan, media reported. Radio Free Europe/Radio Liberty reported that two of the people arrested were Armenian army officers, will raise tension between the two arch-enemies.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 28 2013 (The Conway Bulletin) — What has felt like a titanic battle between two competing proposals to link a gas transit route from the Caspian Sea to Europe is finally over.
At a press conference on June 28, the consortium of energy companies developing the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea said they had chosen the Trans-Adriatic Pipeline (TAP) to send their gas to Europe.
TAP route will carry the gas across Turkey, Greece and Albania and then under the Adriatic Sea to Italy. It is headed by Norway’s Statoil, Switzerland’s AXPO and E.ON Ruhrgas of Germany.
TAP’s victory means defeat for Nabucco West, its main rival headed by Austria’s OMV.
The decision, though, was hardly a surprise. While Nabucco West’s bid has slowly lost momentum its fate was sealed earlier this month when SOCAR, the Azerbaijani energy company, bought a 66% stake in DESFA, Greece’s natural gas distributor.
Now TAP has to be built. It will run for 520km and cost $2.2b. Once it’s up and running, Europe’s reliance on Russia for gas supplies will be reduced and Azerbaijan’s importance to Europe will be increased,
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(News report from Issue No. 141, published on July 1 2013)
JUNE 18 2013 (The Conway Bulletin) — Azerbaijan’s energy company SOCAR has agreed to buy a 66% stake in Greek gas distributor DESFA for $540m, media reported. The deal highlights cash-rich Azerbaijan’s appetite for foreign assets and should also make the Trans-Adriatic Pipeline, part of a gas route from the Caspian Sea to Europe, more viable.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 14 2013 (The Conway Bulletin) — Bloomberg News reported that Austrian prosecutors have accused nine bankers in Austria of bribing foreign bankers, including Adib Mayaleh, head of the Azerbaijani Central Bank. Mr Mayaleh denied he had taken a bribe. He has never been charged with corruption.
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(News report from Issue No. 139, published on June 17 2013)