Caspian Oil & Gas 2023: Azerbaijan, EU touch base Review by Caliber.Az

Aspects of energy dialogue, the expansion of natural gas supplies through the Southern Gas Corridor (SOGC), which several other European countries are ready to join, as well as issues of cooperation in the field of green energy were the leitmotif of meetings, conferences and presentations held during the Baku Energy Week that kicked off on the last day of May.

As usual, Azerbaijani President Ilham Aliyev attended the opening ceremony of the Caspian Oil & Gas 2023 international exhibition and the 11th Caspian International Power and Green Energy Exhibition, while companies and representatives of government agencies from the USA, EU and Great Britain paid particular attention to the oil and gas forum.

Since Baku held its first international oil and gas exhibition Xazarneftgaz back in 1994, the forum, which has acquired a new name and expanded many times, becomes the biggest event in the Caspian region year after year. This year was no exception.

According to Advisor to the Board of the British ICA Group Russell Taylor, official delegations and representatives of 320 companies from 35 countries came to Baku to participate in events of Baku Energy Week. It demonstrates the invariable interest of the world oil giants in hydrocarbon resources and renewable energy sources of the country.

"This year's exhibition coincided with an important event - the centennial anniversary of Azerbaijani national leader Heydar Aliyev, so special attention will be paid to this topic at the forum events," the ICA Group representative stressed at the opening of the conference at Baku Expo Centre.

This specialised exhibition traditionally demonstrates innovative technologies in the field of energy production and transportation, oil and gas storage systems and services, as well as presents current and future oil and gas projects in the region.

At the forum, the management of the Azerbaijani Energy Ministry and the State Oil Company of Azerbaijan (SOCAR) met with representatives of profile institutions from the European Union, the USA, Vietnam and the British BP to discuss current and future oil and gas projects, and exchange experiences and technologies. Besides, it was planned to sign a number of agreements and memoranda of understanding.

For the second year in a row, a prominent place in the pavilions of the exhibition has been given to projects in renewable energy, including offshore wind energy, solar and hydrogen production and the export of Azerbaijani "green" electricity to Southern Europe.

“The Caspian Oil & Gas international exhibition and conference held as part of the Baku Energy Week has helped Azerbaijan to demonstrate its potential to international investors for nearly 30 years," Azerbaijani President Ilham Aliyev said, speaking at the opening of the forum.

“And 1994 was not only the year of the first Caspian Oil and Gas Exhibition, but also the year of signing the contract of the century, which changed completely the situation in our country, attracted investments, brought economic stability, and led to a more prosperous future of Azerbaijan,” he added.

As the president mentioned in his address to the forum participants, the realisation of the first oil contracts and the birth of the country's oil strategy are closely linked to the activity of national leader Heydar Aliyev, whose 100th anniversary is celebrated in Azerbaijan this year. The Azerbaijani president stressed that the principles laid down then allowed the republic to become a reliable guarantor of energy security and establish cooperation with all foreign partners in the oil and gas sector and export of energy resources.

The implementation of the oil strategy is effectively continuing these days, and Ilham Aliyev talked about the near-term prospects of expanding oil and gas production in his opening ceremony speech.

“We are already totally engaged with our strategic partner BP with respect to the production of so-called deep gas from the ACG [Azeri-Chirag-Guneshli] projects and if everything goes according to our plan, by the end of next year, we will have first gas production,” he noted.

Besides, the president stated that the EU treats Azerbaijan as a reliable partner and a common European supplier. He said Azerbaijan has sufficient resources to increase gas supplies by up to 20 billion cubic metres by 2027.

“One of them is our major gas field Shahdeniz and we hope to hear very good news from other gas field Absheron. We hope to hear good news about first gas from Absheron soon. I would even say very soon,” Ilham Aliyev emphasised.

It should be reminded that currently the reserves of ACG are estimated at 300 billion cubic metres of gas. At the same time, at the initial stage Absheron field is planned to produce about 1.5 billion cubic metres of gas annually, and in the future, these volumes may increase up to 5 billion cubic metres of gas.

In his speech, the president highlighted the joint project with Türkiye and the EU – the Southern Gas Corridor: the integrated pipeline system stretching 3,500 kilometres has become a historic achievement and an important tool for ensuring European energy security and energy diversification.

A reminder that today Azerbaijani natural gas is exported to Italy, Greece, Bulgaria and Romania, and this year these supplies are planned to be brought to about 12 billion cubic metres.

“The geography of our supplies, I'm sure, will expand because the need for Azerbaijani gas is growing. We've been approached by more than 10 countries during the last year and a half with respect to either increase of supplies or the beginning of supplies. And of course, we want to satisfy the needs of all our friends and definitely coordinate investments with market opportunities,” President Aliyev said.

According to him, if all the works are completed according to the schedule and the planned interconnectors are built in time, Azerbaijan will be able to start supplying gas to Hungary and Serbia by the end of this year.

The most important vector reflected at the Caspian Oil & Gas 2023 pavilions and discussed at the thematic sessions was the rapidly developing green energy in Azerbaijan. And as the head of state noted, Azerbaijan is now repeating its success in the oil and gas history by implementing projects associated with the export of green energy: using its rich natural resources, the country is making a significant contribution to the global agenda, such as increasing the production of renewable energy, decarbonisation and diversification of energy sources.

"In the medium term, Azerbaijan aims to become an exporter of electricity generated in the renewable energy sources segment, as well as green hydrogen," Ilham Aliyev said.

The head of state also noted that the implementation of large-scale projects in the liberated territories, including the creation of a "green" energy zone in Karabakh and Eastern Zangazur, will turn the republic into a leading producer and exporter of alternative energy.

Azerbaijan has a significant potential for renewable energy, in particular, the capacity of wind energy in the Azerbaijani sector of the Caspian Sea is estimated at 157 gigawatts.  

So far, the agreements and memorandums signed by Azerbaijan imply the generation of 25 gigawatts of green energy. One such project is planned to be realised within the "Agreement on Strategic Partnership in the Field of Development and Transmission of Green Energy between the Governments of Azerbaijan, Georgia, Romania and Hungary" signed in Bucharest on December 17, 2022.

Speaking at the opening ceremony of the forum, Ilham Aliyev touched upon the prospects of the project for laying 1,000 megawatts, 1,195 kilometres of electric cable on the Black Sea.

“We are now in the phase of expectation of finalisation of the feasibility study. We think that this project can transport a minimum of 4 gigawatts of green energy to Europe, which will be our additional contribution,” he stressed.

At the same time, the president said that the development of renewable energy would allow Azerbaijan to reduce the use of gas at thermal power plants and the country will be able to export the released volumes.

The Black Sea Energy project will take 3-4 years to implement and the European Commission is expected to provide €2.3 billion for laying a high-voltage submarine cable.