STRUGGLE FOR ENERGY RESOURCES AT CASPIAN OIL AND GAS CONFERENCE IN BAKU
On June 1-4, 2010, Baku hosted the 17th Caspian International Oil and Gas Conference whose practical dimension was highlighted by a Refining and Petrochemicals Exhibition organized at the Baku Expo Centre.
By opening and ending its annual edition with a geopolitical approach to Eurasian energy issues, this event underlined once again the fundamental role of geopolitics in the region’s economic affairs. While the conference gathered the biggest European energy companies, several political officials were also present, who spoke on the significance of Azerbaijan and the Caspian region in improving European energy security. As Angus Miller, adviser on Caspian energy issues at the U.K. Foreign and Commonwealth Office said, “Azerbaijan is an inseparable component in ensuring Europe’s energy security”, while Richard Morningstar, the U.S. Special Envoy for Eurasian Energy Issues stressed that “we support projects to supply Caspian energy resources to Europe since they play an important role in Europe's energy security”.
The officials of Azerbaijan and those of regional (Georgia, Turkey) and extra-regional actors (U.S., EU) attended this event with the purpose of openly expressing their support for the construction of the Southern Corridor for transporting Caspian gas to European markets. According to Heinz Hilbrecht, the Director of Security of Supply, Energy markets and networks of the EU Directorate-general for Energy, “European consumers are interested in purchasing gas from Azerbaijan and other countries of the region” guaranteeing that “the EU will pay the highest price for it”. Consequently, Brussels strongly favors the Nabucco, Turkey-Greece-Italy and Trans-Adriatic gas pipeline projects, which are considered “mutually complementary systems”, and which were at the core of the discussions at the conference.
Being perfectly aware of the importance of Azerbaijani-Turkish energy dialogue for the accomplishment of these European projects, the U.S. and EU representatives called for a conclusion of an Azerbaijani-Turkish gas agreement (signed on June 7), which is crucial to future energy corridors from the Caspian region to Europe.
Azerbaijani representatives confirmed their political and economic interest in EU energy projects, since these are crucial to Azerbaijan’s current aim of diversifying its energy exports. According to Rovnag Abdullayev, the head of Azerbaijan's state Oil Company, SOCAR, “in the near future, Azerbaijan’s annual oil production will reach 60 million tonnes and gas production 35-40 billion cubic meters, which will increase Azerbaijan's role as an energy supplier to European and global markets”. Azerbaijan is thus “interested in supplying gas to Bulgaria, Greece and Romania through the Southern Corridor, and this explains the importance of the Nabucco project for Azerbaijan”, according to Natig Aliyev, the Azerbaijani Minister of Energy and Industry.
In turn, Turkey's deputy Minister of energy and natural resources Yusuf Yazar, underlined that “Turkey is ready to play a leading and constructive role in the supply of Caspian and Central Asian energy sources to Europe”, and is ready to participate in Nabucco project which is “one of the most important elements in the provision of energy supplies to Europe”.
Russia was absent at the conference, sending neither political, nor economic official representation. While some suggested that the arrogance of Russian oil and gas companies could be the reason for their absence, the competing energy projects promoted by the Kremlin is probably a better explanation. One of the major Russian projects, the South Stream pipeline, is a rival to the Nabucco pipeline, which was the conference’s main topic.
Along with Russia, other Caspian Sea riparian countries like Iran and Turkmenistan were not politically represented. Iran is isolated because of its nuclear issue and the firm position of the U.S., whose representative emphasized that “the U.S. attitude on this remains unchanged and I do not think that Iran can take part in the Southern Corridor”. On the other hand, Turkmenistan chose to isolate itself by missing the conference, in spite of the interests of the conference participants in Turkmen’s energy resources. Turkey’s representative mentioned the participation of Turkmenistan and Kazakhstan in the existing Baku-Tbilisi-Erzurum gas pipeline, hoping for its involvement in future projects and the U.S. representative said “it would be desirable for Turkmenistan to take part in the Southern Corridor projects”. Due to its locked geographical position, Turkmenistan is to an even larger extent than other Caspian states forced to find multiple solutions for the export of its energy resources.
Finally, the need for cooperation in the Caspian Sea region is indispensable to all riparian states, because as Angus Miller stressed “no country could rely only on its own energy resources”. However, as long as politics and geopolitical interests prevail over economic gains, the Caspian states will continue to promote their energy agendas individually, not least by organizing conferences such as the present one, with the purpose of attracting attention from extra-regional actors. Such events are organized annually by all Caspian states, and have become an important tool in advancing these agendas.
