Azernews.Az

By Aynur Jafarova

The Azerbaijan and Caspian Sea Oil and Gas Week 2013 kicked off in Azerbaijan's capital Baku on November 11, and will last till November 13.

The Caspian region with its strategic importance is comparable to the Atlantic or Persian Gulf regions, the Deputy Chancellor on International Affairs of the Gubkin Russian State University of Oil and Gas said.

Anatoly Zolotukhin made the remarks at the Azerbaijan and Caspian Sea Oil and Gas Week 2013.

"The events, even the destiny of other regions, depend on the decisions made here. In this regard, it is impossible to overestimate the importance and significance of the Caspian Sea region," Zolotukhin said at the event chaired by him.

Speaking at the event President of Entrepreneurship Development Foundation and Director of Center for Economic and Political Research Sabit Bagirov said that Azerbaijan's position as a gas exporter will continue to strengthen in future.

"As of October 1, 2013, Azerbaijan's state oil fund SOFAZ's assets reached $35.81 billion. The total of Azerbaijan's strategic currency reserves reached $50 billion. These indicators have increased year by year and I'm sure that this tendency will not change," he said.

Bagirov went on to note that after the restoration of Azerbaijan's independence, oil revenues became one of the important financial resources of the country.

"The funds gained from the oil and gas sectors are allocated to financing various social, large infrastructure and other projects, including in a form of transfer to the state budget. The results of this policy can be seen with the naked eye," Bagirov said.

He also recalled that Azerbaijan exported 36.8 million tons of oil and 6.6 billion cubic meters of gas in 2012.

"The peak volume of oil production was observed in 2010, then it started to decrease which is completely normal. As for gas, Azerbaijan's export potential will continue to increase. Thanks to the Trans Anatolian gas pipeline project, Azerbaijan will annually export 25 billion cubic meters of gas till 2016," he said.

Speaking at the event, Energy Counselor of the European Union (EU) delegation to Azerbaijan Edyta Nowak said that the implementation of the Southern Gas Corridor project will facilitate further solidification of the EU's cooperation with the Caspian littoral countries, particularly Azerbaijan.

"The world energy map is changing with an unprecedented speed. Despite the increasing role of renewable and alternative energy resources, oil and gas keep a dominant position which will remain so by 2035," she said.

Nowak went on to say that market participants have to review their energy strategy with an eye the increasing role of the U.S., Australia, and other relatively new suppliers and actors.

According to the forecasts, Europe's dependence on oil and gas import will increase by 2030, she said.

"According to BP Energy Outlook data, the shale gas which will experience boom will not be enough. The future of nuclear energy in Europe is also not clear after the accident in the Fukushima plant," Nowak said.

Meanwhile, natural gas's significant role in meeting energy demands is also mentioned by the EU, she said.

"The countries of the Caspian basin -Azerbaijan and Kazakhstan- provide 11 percent of Europe's oil imports," she said.

Currently the EU's attention in its search for new routes of gas delivery gas is focused on Azerbaijan, in particular the giant Shah Deniz field, which sets the basis for the Southern Gas Corridor.

"Significant work has been done for its implementation, and important agreements were signed. Final investment decision on the second stage of the development of the Shah Deniz field will be made by the year-end. I want to mention that the EU and Azerbaijan and other participants of the project are surely focused on its successful implementation and strengthening cooperation," she said.

Gas which will be produced within the second stage of Azerbaijan's Shah Deniz field development will be the main source for the Southern Gas Corridor, which envisages the transportation of Caspian gas to European markets.

In late June, the Shah Deniz consortium announced the selection of TAP as the main route for transporting its gas to Europe. Another pipeline which was vying for Azerbaijani gas transportation to Europe was Nabucco West.

The selection of TAP marked the start of the implementation of the Southern Gas Corridor project that will allow Europe to diversify its supply sources and increase energy security as well as enable Azerbaijan to acquire a new market, Europe.

Shah Deniz, estimated to contain 1.2 trillion cubic meters of gas, is operated by the London-based BP. Partners include SOCAR, Statoil, Total, Lukoil, NICO and TPAO. Last year, the partners extended the Shah Deniz contract for another five years, till 2036.

The Azerbaijan and Caspian Sea Oil and Gas Week 2013 is a must-attend event for any company interested in the wealth of potential and opportunities that exist in the Caspian's oil and gas sectors.

The conference includes discovery of the latest developments in current pipeline and infrastructure projects, uncovering the potential in the regions Gas Storage and pipeline projects, networking with the key players involved in exploration and production in the region, and finding the latest underwater and subsea technological trends and updates.