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Energy Ministry, BP mull oil prices, SGC meeting

26 February 2016 16:22 (UTC+04:00)
Energy Ministry, BP mull oil prices, SGC meeting

By Aynur Karimova

Azerbaijan's Energy Minister predicts oil prices to increase from 2017.

Speaking at a meeting with Gordon Birrell, BP Regional President for Azerbaijan, Georgia and Turkey, on February 26, Natig Aliyev said that since 2017, oil prices will rise and stabilize on the global oil markets.

During the meeting the sides discussed the sharp decline in oil prices on the global oil markets and its causes, priorities of the future development of the oil producing countries, as well as the areas of cooperation of foreign companies within the oil projects.

The decrease of oil price has been driven by oversupply, mainly due to the export of U.S. shale oil to the market, while demand has fallen because of a slowdown in economic growth in China and Europe.

To deal with this bitter reality, energy-rich Azerbaijan, the national economy of which faced challenges caused by drop in oil prices on the world market, has been reviewing the economic plans and taking anti-crisis measures to overcome the difficulties.

One of the main steps in this regard, was revision of the state budget for 2016 based on the oil price of $25 per barrel.

SGC meeting in Baku

Minister Aliyev and BP's Birrell also discussed the work carried out as part of the implementation of the multibillion-dollar Southern Gas Corridor project initiated by Azerbaijan.

The minister said that the preparations for holding the second meeting of the Southern Gas Corridor Advisory Council scheduled for February 29 in Baku have been already completed.

"The energy ministers of the countries, participating in the project, are expected to attend the meeting,” Aliyev said.

The meeting is expected to be attended by Maros Sefcovic, Vice-President for Energy Union, representatives of the International Finance Corporation, European Bank for Reconstruction and Development, Azerbaijan's state energy giant SOCAR, BP-Azerbaijan, TANAP, TAP and other organizations and companies.

“During the meeting it will be possible to assess the conducted work, discuss the challenges, faced by all transit countries, and jointly seek the ways of solving them," Aliyev said.

Baku hosted the first Southern Gas Corridor Advisory Council meeting on February 12 in 2015, during which the issues of further promotion of the project and the problems that may arise in its implementation were discussed.

The Southern Gas Corridor project envisages the transportation of the gas extracted at the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea. Shah Deniz Stage 2 gas will make a 3,500 kilometer journey from the Caspian Sea into Europe. This requires upgrading the existing infrastructure and the development of a chain of new pipelines.

The existing South Caucasus Pipeline will be expanded with a new parallel pipeline across Azerbaijan and Georgia, while the Trans-Anatolian pipeline will transport Shah Deniz gas across Turkey to meet the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The Southern Gas Corridor is set to change the energy map of the entire region, connecting gas supplies in the Caspian to markets in Europe for the very first time.

The first gas supplies through the corridor to Georgia and Turkey are given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first gas is produced offshore in Azerbaijan.

The Southern Gas Corridor pipeline system has been designed to be scalable to twice its initial capacity to accommodate additional gas supplies in the future.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz

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