Ilham Shaban says 2011 was notable for energy achievements

Ilham Shaban, head of the Baku Center for Oil Research, said that oil extraction dropped by 10.5% for the first time in 15 years in 2011. Oil prices increased by 40%, the expert notes.

Shaban noted signing of an energy declaration between the European Union and Azerbaijan on January 14. He added that Turkmenistan failed to reach such an agreement during the visit of an EU delegation.

The State Oil Company of the Azerbaijani Republic (SOCAR) increased share in the Azeri-Chirag-Guneshli project in June, the second largest shareholder after BP.

Totao (France) opened a new gas field Absheron in late August.

Azerbaijan and Turkmenistan signed a deal with Ankara on gas transit to EU states and sales of 6 billion cubic meters of gas to Turkey in late October.

Azerbaijan made its first major foreign investments in the last 20 years on October 25. SOCAR started construction of a refinery in Izmir worth $5 billion.

Azerbaijan and Turkey agreed to build a new gas pipeline to transport fuel to Europe, the Trans-Anatolia Gas Pipeline. The first document for realization of the project was signed by Energy Ministries of both states on December 26. Technical realization will start in January 2012. 80% of construction will be financed by SOCAR, 10% by Türkiye Petrolleri Anonim Ortaklığı (TPAO) and Botas (operator of the Turkish pipeline system).

Shaban reminded that SOCAR started first sales of petroleum in the EU on October 31. 11 petrol stations were launched in Romania. SOCAR announced purchase of 100% shares of Swiss trader Esso, a company belonging to ExxonMobil. This makes a total of 170 petrol stations under the SOCAR brand. SOCAR will control 10% of Swiss petroleum market.

SOCAR invested $1 billion in Georgia in January 2006. The SOCAR Georgia Company was opened.

Azerbaijan cooperate with Russia. About 1.5 billion cubic meters of gas were exported to Russia in 2011, exceeding the volumes in 2010 almost twofold (799 million cubic meters).

SOCAR head Rovnag Abdullayev met Gazprom President Alexey Miller in December. They agreed to increase exports of gas to Russia to 3 billion cubic meters. Russia and Azerbaijan have been increasing gas volumes since 2009.

Shaban said that Azerbaijani oil is still transported through the north route to Novorossiysk. Transit totaled 2 million tons in 2011. The expert explained that there is a slight reduction of oil extraction by 10% because 2.2 million tons were pumped a year before.