AzerbaijanAzerbaijanand and

energy securityenergy security

Azerbaijan, country between East and West Azerbaijan, country between East and West 2012.02.282012.02.28

by Ambassador Tahir Taghizadeh by Ambassador Tahir Taghizadeh

Outline:Outline:

1. General information, 1. General information, periods of modern periods of modern history and main history and main

featuresfeatures2. Oil and gas industry2. Oil and gas industry

3. Energy security, 3. Energy security, challenges and future challenges and future

strategystrategy

The Republic of Azerbaijan

capital: Baku territory : 86 600 km2

population: 9 111 100 official language:

Azerbaijani state structure:

Presidential republic currency: Azerbaijani

manat (AZN) 1 $ - 0.7863 AZN

Periods of modern Periods of modern historyhistory

1918 – 1920 Azerbaijan 1918 – 1920 Azerbaijan Democratic Democratic Republic Republic

1920 – 1991 Azerbaijan Soviet 1920 – 1991 Azerbaijan Soviet Socialist Socialist Republic Republic

Since 1991 Republic of AzerbaijanSince 1991 Republic of Azerbaijan

Main features of Main features of AzerbaijanAzerbaijan

Geo-strategic location at the Geo-strategic location at the crossroads between East and crossroads between East and West, South and NorthWest, South and North

Rich mineral resources, Rich mineral resources, especially oil and gasespecially oil and gas

Fastest growing economyFastest growing economy

Diverse nature Diverse nature

History of oil industry

1. First period: 1847 – 1920

first industrial production of oil construction of the first oil refineries construction of the first oil pipelines

History of oil industry

2. 2. Second period: 1920 – 1949Second period: 1920 – 1949

nationalization of oil industry nationalization of oil industry

increase in oil production which increase in oil production which made up 76 % of the total volume made up 76 % of the total volume of oil production in USSRof oil production in USSR

History of oil industry

3. 3. Third period: 1949 – 1991Third period: 1949 – 1991commissioning of the Neft Dashlary (Oil commissioning of the Neft Dashlary (Oil Rocks) filed which was established on the Rocks) filed which was established on the Estacade in the open sea for the first time in Estacade in the open sea for the first time in the world the world

expansion of offshore exploration worksexpansion of offshore exploration works

development of oil production infrastructuredevelopment of oil production infrastructure

History of oil industry

4. 4. Modern period: since 1991Modern period: since 1991opening up of the oil industry opening up of the oil industry to foreign investors to foreign investors

conclusion of the Contract of conclusion of the Contract of the Centurythe Century

construction of Baku-Tbilisi-construction of Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum Ceyhan, Baku-Tbilisi-Erzurum pipelines pipelines

Oil and gas pipelines of international importance

1. Baku-Tbilisi-Ceyhan1. Baku-Tbilisi-Ceyhanlength – 1769 km, capacity – 50 length – 1769 km, capacity – 50 million tons per yearmillion tons per year

operation started – 25 May 2005operation started – 25 May 2005

2. South Caucasus Pipelines2. South Caucasus Pipelineslength – 692 km, capacity – 20 length – 692 km, capacity – 20 billion billion m3

operation started – in 2006operation started – in 2006

Contribution of Azerbaijan to Europe’s

energy security

diversification policydiversification policy

Memorandum of Memorandum of Understanding between EU Understanding between EU and Azerbaijan on Strategic and Azerbaijan on Strategic Partnership in Energy Area Partnership in Energy Area (November 7, 2006)(November 7, 2006)

Contribution of Azerbaijan to Europe’s

energy security

Memorandum of Understanding Memorandum of Understanding between Azerbaijan and the US between Azerbaijan and the US Government on Dialogue on Energy Government on Dialogue on Energy Security (March 22,.2007)Security (March 22,.2007)

Vilnius International Conference on Vilnius International Conference on Energy Security (October 10-11, Energy Security (October 10-11, 2007)2007)

Joint Declaration between the Joint Declaration between the President of Azerbaijan and the President of Azerbaijan and the President of European Commission on President of European Commission on the Southern Gas Corridor (January the Southern Gas Corridor (January 13, 2011)13, 2011)

Challenges

Main problems impending final Main problems impending final definition of legal status – definition of legal status – differences in positions of differences in positions of coastal statescoastal states

a)a) Azerbaijan backs centerline Azerbaijan backs centerline principle, together with principle, together with Kazakhstan and RussiaKazakhstan and Russia

b)b) Iran claims 20 % of the sea for Iran claims 20 % of the sea for each coastal state each coastal state

c)c) Turkmenistan seems to support Turkmenistan seems to support Iran’s stanceIran’s stance

Future strategies

search and explorations of search and explorations of new fieldsnew fields

involvement of discovered involvement of discovered fields in full-scale fields in full-scale development development

construction, reconstruction construction, reconstruction and modernization of oil-gas and modernization of oil-gas production, transportation production, transportation and refining systems and refining systems

Future strategies

identification of directions of identification of directions of development of non-oil development of non-oil sector of industrysector of industry

expanding the use of expanding the use of alternative and restored alternative and restored energy sourcesenergy sources

widely use achievements of widely use achievements of science and techniques and science and techniques and advanced experience advanced experience

THANK YOU FOR YOUR ATTENTION

AND WELCOME TO AZERBAIJAN