Oil, natural gas, renewables represent major segments of Azerbaijani energy policy
Article by The Diplomatic Courier
ECONOMICS 14 June 2024 - 13:06
Writing in The Diplomatic Courier, Nikola Mikovic, correspondent, researcher and analyst working in Serbia and covering the foreign policy of Russia, Belarus and Ukraine, describes Azerbaijan’s energy potential.
Following the European Union’s “energy divorce” from Russia, Azerbaijan has established itself as a significant exporter of oil and natural gas to several European countries. The South Caucasus nation now aims to become a key source of green energy for Europe, according to the article.
During World War II, Azerbaijan accounted for 75 per cent of the oil produced in the Soviet Union. After the breakup of the USSR, the Caspian nation decided to focus on oil exports. And that decision proved to be very fruitful.
This year Azerbaijan marks the 30th anniversary since the signing of the Contract of the Century, a deal that increased the Caspian country’s political and economic might, and changed the economic landscape of the region. It was signed on September 20, 1994 between Azerbaijani officials and 11 major foreign oil companies (BP, Amoco, Unocal, LUKoil, Statoil, Exxon, TPAO, Pennzoil, McDermott, Ramco, Delta Nimir) from six countries: the United Kingdom, the United States, Russia, Norway, Türkiye, and Saudi Arabia.
The document effectively transformed Azerbaijan into one of the world's major oil exporters. But the country also has significant reserves of natural gas. Russia’s invasion of Ukraine has helped Azerbaijan also become one of Europe’s major gas suppliers.
The energy–rich country’s natural gas exports to Europe have increased from 19 billion cubic meters in 2021 to 23.8 billion cubic meters in 2023. Although natural gas and oil represent major segments of Azerbaijani energy policy, Baku also seeks to develop its green energy potential. The authorities plan to supply Europe with hydrogen, as well as with “green electricity” that will be produced in Karabakh, a region that was under Armenian control for three decades, but was recaptured by Azerbaijani forces last year.
“No fossil fuels will be used in Karabakh,” Azerbaijani Energy Minister Parviz Shahbazov said at the Baku Energy Forum (which is part of the Baku Energy Week) held in the South Caucasus nation’s capital on June 4, 2024.
According to the country’s top energy official, Karabakh, as well as the regions of Eastern Zangazur and Nakhchivan, will be transformed into green energy zones. But Azerbaijan also plans to export that energy, in the form of electricity, to Europe.
That is why, back in 2022, Masdar, a United Arab Emirates state-owned corporation, signed a Memorandum of Understanding with Azerbaijan on cooperation in the field of renewable and clean energy in Karabakh. But the Abu Dhabi–based corporation’s representatives have told Diplomatic Courier that any projects in the mountainous region of Azerbaijan are unlikely to be realized in the near future. Instead, the company will focus on the development of green energy facilities in other parts of Azerbaijan.
Meanwhile, Baku will seek to build the Caspian–Black Sea–European Green Energy Corridor, which will deliver electricity produced from offshore wind farms in the Caspian Sea to Europe.
“First results of the project feasibility study are expected by the end of this year,” Shahbazov stated at the Baku Energy Forum, where renewable energy was one of the major topics.
The Baku Energy Week, which took place in Azerbaijani capital from June 4-6, 2024, combined three events: the 29th International Caspian Oil and Gas Exhibition, the 12th Caspian International Power and Green Energy Exhibition, and the 29th Baku Energy Forum. While the Caspian Oil and Gas Exhibition focused on major fossil fuel projects in the Caspian region, the two latter events’ main agenda included the development of the renewable energy sector.
Such an approach clearly suggests that oil, natural gas, and renewables seem to represent the major segments of Azerbaijani energy policy. More importantly, the fact that US President Joe Biden sent a letter that was read at the Baku Energy Week forum, and that Harry Kamian, senior adviser for multilateral energy diplomacy for the US State Department’s Bureau of Energy Resources, participated in the event, perfectly illustrates that Baku can count on Washington’s support in its plans to continue ensuring energy security in Europe.
In other words, the US welcomes the EU’s decision to end its dependency on Russian oil and gas, which is why it encourages Azerbaijan to produce more energy and export it to Europe. The problem, however, is that it will take time for Azerbaijan to develop its green energy potential, and increase natural gas supplies to the European market.
Quite aware of that, Hungarian Foreign Minister Peter Szijjarto emphasised at the energy conference in Baku that his country will continue purchasing Russian gas, despite pressures coming from the European Union.
“This is not a political declaration but a matter of national sovereignty and rationality. Energy supply should be freed from ideological and political debates,” Szijjarto stressed, pointing out that supplying energy is a “physical and mathematical problem rather than a philosophical one.”
But given that his country also aims to strengthen energy ties with Azerbaijan, and that Budapest plans to acquire a stake in Azerbaijan's Shah Deniz gas field, in the long–term the landlocked EU member will likely have to comply with the EU’s official policy, and significantly reduce its energy cooperation with Russia.
Azerbaijan will undoubtedly benefit from such an outcome.
Caliber.Az
1
|
Third Karabakh War becomes inevitable The region is on the brink of a major conflagration
22 June 2024 - 16:19
|
2
|
US diplomacy, the Zangazur corridor Balancing interests in the Caucasus
20 June 2024 - 15:14
|
3
|
Escalating tensions & prospect of war in the South Caucasus Can French arms supply reignite new regional war?
20 June 2024 - 15:53
|
4
|
Toyota just beat hydrogen forever New technology America doesn’t know about
21 June 2024 - 23:04
|
5
|
Paris and Baku: A clash of interests & ideologies Historical context & rivalry origins
21 June 2024 - 17:26
|
America beats hydrogen with new fuel
23 June 2024 - 22:02
Romanian village set to become Nato's biggest airbase in Europe
23 June 2024 - 20:03
Armenian PM announces failure of protest movement
23 June 2024 - 17:59
Iran prepares for extraordinary presidential polls following tragic helicopter crash
23 June 2024 - 17:46
New Caledonia pro-independence leader charged after deadly riots
23 June 2024 - 17:31
F-16 fighter jets set to counter Russian air superiority in Kharkiv region
23 June 2024 - 17:15
Ukrainian forces strike Sevastopol with ATACMS missiles - Russia
23 June 2024 - 16:55
Tandem of puppets
Pundit’s analysis23 June 2024 - 16:35
Russia restructures & replaces Wagner group post-mutiny
23 June 2024 - 16:20
Azerbaijani Defense Ministry presents weekly review
VIDEO23 June 2024 - 16:02
EU suggests bilateral mechanism to investigate Armenia-Azerbaijan ceasefire violations
23 June 2024 - 15:46
Armenia's truce violations amid rising tensions & strategic weapons deals with France
Those who ignore history are bound to repeat it23 June 2024 - 15:31
Iran announces offshore rial project
23 June 2024 - 15:16
India's Modi to skip annual SCO Summit in Kazakhstan in July
23 June 2024 - 14:56
Azerbaijani Air Force's Karabakh Casket strategy marked for role in Patriotic War victory
PHOTO23 June 2024 - 14:26
Macron urges French not to vote for “extremes” during parliamentary elections
23 June 2024 - 14:11
Israeli defence minister heads to Washington
Touting importance of ties with US23 June 2024 - 13:51
Vietnam elevates US to its highest diplomatic status
23 June 2024 - 13:35
America’s failed diplomatic approach towards Beijing & its business community
23 June 2024 - 13:16
EU high rep compares Europe to “garden” and rest countries to “jungle”
Are Borrell's statements important?23 June 2024 - 12:40
Pakistan announces national counter-terrorism campaign
23 June 2024 - 12:24
Azerbaijan to hold Forum of Non-Governmental Organisations in liberated lands for first time
23 June 2024 - 12:09
Iran's UN envoy highlights commitment to combating extremism & supporting Afghanistan at SC meeting
23 June 2024 - 11:55
Ukraine pushing US to strike high-value targets inside Russia using ATACMS
Article by Associated Press23 June 2024 - 11:39
Armenia’s military build-up & western alignments risk renewed conflict
Baku warns Yerevan23 June 2024 - 11:39
Russian president awards ambassador to Azerbaijan Order of Alexander Nevsky
23 June 2024 - 11:24
Serbia turns blind eye to its ammunition ending up in Ukraine
Article by Financial Times23 June 2024 - 11:09
European forum of Azerbaijani engineers begins in Germany, promotes collaboration & innovation
23 June 2024 - 10:54
Azerbaijan organises media tours on eve of Armed Forces Day
PHOTO / VIDEO23 June 2024 - 10:39
Seoul arms supplies to Ukraine depend on Russia-DPRK military cooperation - official
23 June 2024 - 10:35
Iran’s Supreme Leader urges presidential candidates to avoid divisive rhetoric
23 June 2024 - 10:20
Israeli media: Hezbollah may initiate large-scale military campaign
23 June 2024 - 10:05
Armenia proposes Azerbaijan to create mechanism for investigating ceasefire violations
23 June 2024 - 09:49
Azerbaijani Kalbajar District again under Armenian fire
23 June 2024 - 09:34
Steering through tangled web of conflict & peace between Azerbaijan & Armenia
High time to do away with a vicious circle23 June 2024 - 09:17
Greece to receive 164 M2A2 Bradleys
Including 62 as free aid from US23 June 2024 - 08:55
US Army plans deployment of over 1,000 Switchblade drones
Through Replicator initiative23 June 2024 - 06:30
French voters navigate snap election amid summer holidays
23 June 2024 - 04:23
Türkiye's interest in BRICS reflects strategy to broaden foreign policy
Not shift from West23 June 2024 - 02:20
EU tariffs on China not a "punishment", says German minister
23 June 2024 - 00:15