SOCAR makes strides in expanding ops in Europe

Azerbaijani state oil company SOCAR, which is the main producer of hydrocarbons in the country, actively continues to strengthen its position on the international markets.

The company, which is already among the world`s largest oil and gas companies, has made big steps forward in expanding its activities not only in the region, but also in such parts of the world as Europe.

Today SOCAR has its own gas stations in Azerbaijan, Georgia and Ukraine. The company has also acquired 14 gas stations in Romania and made an important and significant progress in its expansion goal by signing an agreement with Exxon Mobil to acquire its Swiss branch called Esso Schweiz GmbH. Following the acquisition of Esso Switzerland, SOCAR has taken over a retail network consisting of 170 gas stations, a fuel marketing division for industry and wholesale clients and a range of other oil and gas infrastructure assets.

SOCAR believes that the company`s entry into markets of Switzerland and Romania allows it to examine the European experience and consider the possibility of expanding markets in Austria, Hungary and several Balkan countries.

SOCAR`s existing network of petrol stations across Azerbaijan, Georgia, Ukraine and Romania, as well as the company`s new Swiss business are ``just the start of the story,`` Deputy Vice President of SOCAR, Vitaly Baylarbayov says.

``The strategy of the State Oil Company is obviously to expand its geography, first with regional expansion and then further to Europe and the rest of the world,`` Baylarbayov said in interview with Financial Times published on June 19.

SOCAR is one of the partners in the giant project on development of the Shah Deniz gas condensate field in Azerbaijan. The field`s second phase of development is another opportunity for SOCAR to reach attractive European market. Some 10 billion cubic meters per year that will be exported to the EU countries within the Shah Deniz 2 project are currently basic volumes for implementation of the Southern Gas corridor projects.

Upcoming signing of the package of agreements on TANAP pipeline will be epochal event in its implementation.

Azerbaijani gas is now considered as an important source that will contribute to increasing security of energy supply for the European Union.

Moreover, according to Baylarbayov, Shah Deniz 2 project will also create the possibilities for signing gas swap agreements, allowing SOCAR to enter British, European or any other market.

``We are co-operating with companies, who have significant interest in gas production in the North Sea: BP, Statoil and Total. The idea is to swap what they have with what we will have and in this way become a player on the UK market,`` Financial Times quotes Baylarbayov as saying.

Export of Azerbaijani gas to the European markets will significantly increase the strength of the country on the world energy market. And the country`s gas potential will enable it to preserve status of reliable supplier in the long-term perspective.

According to Baylarbayov, the second phase of Azerbaijani Shah Deniz gas condensate field development is not only project within which Azerbaijan is going to supply gas to its future buyers.

At present, Azerbaijan considers several options to export its gas to the European markets. The list of possible export routes is quite broad: it includes projects TAP (Trans Adriatic Pipeline), Nabucco (or the Nabucco West), and SEEP (South-Eastern Europe Pipeline). The choice between the projects aimed at transporting gas to Central European direction (Nabucco base case, Nabucco West and SEEP) will be made in the coming days. The final decision on a pipeline route to export Azerbaijani gas to the European markets is expected to be made by Shah Deniz Consortium in 2013.