By Maria Sidelnikova exclusively to Vestnik Kavkaza
The visit by Russian President Vladimir Putin to Azerbaijan, which resulted in signing the agreements on cooperation between energy giants of the two countries, Rosneft and SOCAR, made many analysts reconsider relations between the countries.
Commenting for Vestnik Kavkaza the most interesting joint projects in the energy sphere between Russia and Azerbaijan, Alexei Belogoriev, deputy director of the Institute of Energy Strategy, notes that it is, first of all, offshore exploration. According to the expert, Russian companies are not inclined to allow foreign companies to work in the Russian territory, so the projects will be initiated in the territory of Azerbaijan.
“That is, exploration more than mining is interesting so far. That is a job for the future after 2020. Of course, those companies that are already there - first of all LUKOIL - they retain their participation,” Belogoriev thinks. “But I cannot say that Azerbaijan is one of the most interesting areas - for example, for Russian investment in the oil industry the prospects for the oil industry of Azerbaijan are now quite limited. And even within the CIS, Kazakhstan, Uzbekistan and other Central Asian republics, and other attractive, of course, regions of the world - Latin America, in which Russian companies are now actively trying to invest.”
Director of the Center for Global Energy Markets of the Energy Research Institute of the Russian Academy of Sciences, Vyacheslav Kulagin, agrees with this view. He thinks that the situation in the oil sector of Azerbaijan is not so simple. “Actually, for a long time, even in the former USSR, Azerbaijan was regarded as a source of oil where we, in general, took everything, supplied it to the domestic market and exported it. But now the situation is such that, in the future, oil production will decline, and the decline will be quite serious. And now Azerbaijan is refocused on the gas sector, especially in the framework of the "Shah -Deniz" project,” Kulagin told Vestnik Kavkaza.
The most interesting thing, in Kulagin’s opinion, is technological cooperation, particularly technological cooperation in terms of increased oil extraction. “Compared to global peers today, our oil industry, the Azerbaijani oil industry, does not reach the recovery factor of the West. And prospects for that exist. And most importantly, indeed, all this happens against the background of fairly solid deposits that have a high degree of exhaustion both in Azerbaijan and in Russia. That's the direction we have to develop. And some work has been done; in my view, it is quite sluggish, that is, we should go much deeper in this direction,” Kulagin believes. He is acquainted with some works that are caused, for example, by the use of biotechnology to improve the recovery factor of oil, which is now experimentally applied in Azerbaijan. In my opinion, this is really promising. “If this happens, in the scientific field and at company level we can work with the Azerbaijani side.”
Alexei Belogoriev thinks that Russia is staking a lot on its Caspian shelf area. “Of course, those technologies that we employ and develop ourselves, first of all LUKOIL itself, can be used for the development of both the Kazakh and the Azerbaijani fields, that is, here we can act not only as investors but also as exporters of technology, which is even more attractive for us.”
Vyacheslav Kulagin states that after Sechin 's visit to Baku and the subsequent visit of Vladimir Putin there were no some fundamental changes which have taken place in the framework of projects, but he thinks these visits will add some understanding. “Speaking about geopolitics, for a very long time we have countries such as Azerbaijan, Turkmenistan, and they are opposed to Russian energy field . That is, for the West, this is an alternative to Russia. But at the same time, we live in the same region. The Caspian Sea definitely has players which, in general, need to address the status of the Caspian Sea and, of course, those trans-Caspian gas pipeline projects, and so on. And then we just doomed to work together. And these visits at the highest level, in my opinion, they should remove some tension and improve mutual understanding,” Kulagin summed up.
