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Azerbaijan and energy security by Ambassador Tahir Taghizadeh Azerbaijan, country between East and West 2012.02.28 Outline: 1. General information, periods of modern history and main features 2. Oil and gas industry 3. Energy security, challenges and future strategy 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 history 1918 – 1920 Azerbaijan Democratic Republic 1920 – 1991 Azerbaijan Soviet Socialist Republic Since 1991 Republic of Azerbaijan Main features of Azerbaijan Geo-strategic location at the crossroads between East and West, South and North Rich mineral resources, especially oil and gas Fastest growing economy 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. Second period: 1920 – 1949 nationalization of oil industry increase in oil production which made up 76 % of the total volume of oil production in USSR History of oil industry 3. Third period: 1949 – 1991 commissioning of the Neft Dashlary (Oil Rocks) filed which was established on the Estacade in the open sea for the first time in the world expansion of offshore exploration works development of oil production infrastructure History of oil industry 4. Modern period: since 1991 opening up of the oil industry to foreign investors conclusion of the Contract of the Century construction of Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum pipelines Oil and gas pipelines of international importance 1. Baku-Tbilisi-Ceyhan length – 1769 km, capacity – 50 million tons per year operation started – 25 May 2005 2. South Caucasus Pipelines length – 692 km, capacity – 20 billion m3 operation started – in 2006 Contribution of Azerbaijan to Europe’s energy security diversification policy Memorandum of Understanding between EU and Azerbaijan on Strategic Partnership in Energy Area (November 7, 2006) Contribution of Azerbaijan to Europe’s energy security Memorandum of Understanding between Azerbaijan and the US Government on Dialogue on Energy Security (March 22,.2007) Vilnius International Conference on Energy Security (October 10-11, 2007) Joint Declaration between the President of Azerbaijan and the President of European Commission on the Southern Gas Corridor (January 13, 2011) Challenges Main problems impending final definition of legal status – differences in positions of coastal states a) Azerbaijan backs centerline principle, together with Kazakhstan and Russia b) Iran claims 20 % of the sea for each coastal state c) Turkmenistan seems to support Iran’s stance Future strategies search and explorations of new fields involvement of discovered fields in fullscale development construction, reconstruction and modernization of oil-gas production, transportation and refining systems Future strategies identification of directions of development of non-oil sector of industry expanding the use of alternative and restored energy sources widely use achievements of science and techniques and advanced experience THANK YOU FOR YOUR ATTENTION AND WELCOME TO AZERBAIJAN