A cornerstone of BP’s business in Azerbaijan has been its close cooperation with the State Oil Company of Azerbaijan (SOCAR). Turkhan Ahmad talks to Elshad Nasirov, SOCAR’s Vice President, Investments and Marketing, about the relationship
How important has BP’s cooperation with SOCAR been in the development of Azerbaijan?
BP and Azerbaijan are a very good match. Just like two great players in one team. Azerbaijan is the oldest oil producer in the world, so the nation’s hydrocarbon experience is exceptional. We may not be great at football but we are certainly one of the most experienced countries in the world when it comes to oil and gas. But BP’s technology and know-how and its willingness to work with Azerbaijan in the difficult years of 1992-94 has been worth a lot. So it’s a perfect match - an experienced international oil company and an experienced oil nation. BP has made a huge contribution to the development of Azerbaijan. When the company came to Baku Azerbaijan was not a country which foreign investors could fully trust. A ceasefire had just been signed. The country was torn apart by separatist movements and occupation of Nagorno Karabakh. A civil war was looming. It took great courage for any company to start investing billions of dollars here. But the seeds were planted in fertile soil. The partnership of BP and other foreign investors with SOCAR has turned Azerbaijan into a totally different, very prosperous country.
How do you find BP as a partner?
We have many friends in BP. We’ve seen a lot of BP staff arrive in Baku, leave and then return. So BP for us is a friendly company - a company we trust. And we hope that this trust is mutual. We find BP a very efficient company; it follows advice that we might give it from time to time. And we have mutually beneficial cooperation in the projects where BP is the operator. We appreciate that.
What are the key areas of cooperation between SOCAR and BP? And where else, apart from the oil and gas business do you think SOCAR and BP can cooperate?
Obviously, the main focus of our cooperation is ACG and Shah Deniz. The dedication of BP and a few specific individuals in the company was a solid factor for all of us to celebrate when the final investment decision for Shah Deniz 2 was taken on 17th December, 2013. BP as the operator of Shah Deniz, was and still is the most dedicated foreign company. It has a strong belief in the Southern Gas Corridor. For BP, and obviously for us, that is one of the biggest projects in our portfolios. As happened 20 years ago, BP had enough courage not only to believe in this project but also to bring it to a successful kick-off - the sanctioning of 45 bln USD Shah Deniz 2 Project. This is the most challenging, serious and expensive project that our company and our country have ever had. It’s the beginning of a new era for Azerbaijan. For the first time in the history, the country and the Caspian region will be linked to the biggest markets for natural gas. Beyond oil and gas, we cooperate with BP in many areas. For example, there were the London Olympics and now we are both sponsors of the 2015 Baku European Games. BP also greatly contributes to education – the development of young specialists in Azerbaijan. If BP proposed another area for cooperation, we would gladly consider accepting it.
Do you think BP can play a role in the gas future of Azerbaijan in addition to Shah Deniz 2?
Of course, I do. I see BP participating in many future gas projects. We are discussing a few such projects with BP at the moment.
What role has BP people and BP technology played in the development of Caspian basin?
It’s apparent to anyone that BP has made a major contribution with both its people and its technology. Through ACG we’ve achieved the peak in oil production in this country since the first well was drilled in 1848. This project is run and operated by BP. We hope that it will be a similar success story with Shah Deniz – one which will also bring new technologies to the region. I recall Bob Dudley’s speech at the end of 2013 in the Heydar Aliyev Centre about the ‘firsts’ that this country had at the beginning of the 20th century and later. He said that with the development of Shah Deniz, BP and its partners will introduce several more ‘firsts’. This project will provide gas not only to Azerbaijan, Georgia, Turkey and Europe but also will be accompanied by technological breakthroughs. We’re happy that these breakthroughs will be in Azerbaijan.
BP is widely seen as a strategic partner of Azerbaijan. Is that accurate?
Of course it is! BP is clearly a strategic partner of Azerbaijan since the biggest projects here are run and operated by BP and the contribution of BP in our oil and gas industry is tremendous. Azerbaijan as a country, and its people as a nation, do not change friends frequently. We’re absolutely sure that BP shares this philosophy. BP started its operations in this region long ago – much longer than the period since independence was restored to Azerbaijan in 1991.
So to us BP’s return to Azerbaijan was an expected move, and one that is appreciated highly. For me, it’s a given that BP is a strategic partner of Azerbaijan.
In his short speech by the BP stand during the latest Oil and Gas Show the President of Azerbaijan Mr. Ilham Aliyev noted that the country had worked for 20 years with BP and he wanted this relationship to last for 20 more years. Is this realistic?
President Aliyev worked in SOCAR for many years, so whatever he says is based on huge experience in an oil company. He participated in the ACG negotiations from the beginning. He witnessed the signing ceremonies of many big deals between BP and SOCAR as well as between SOCAR and other foreign companies. And he was always very well informed of the progress and the challenges that we had during the Shah Deniz negotiations, not only within the Shah Deniz consortium but also with the transit countries and the countries that were prospective consumers of our gas. Shah Deniz is a project that will last for many years. Therefore it’s reasonable to expect BP to remain our active friend and contributor to Azerbaijan’s economy for the next twenty and more years.
You’ve been involved in BP-SOCAR regular negotiations for a long time. How do you compare the past with the present?
Well, since we started the negotiating process over Shah Deniz with the transit countries and with the potential buyers, we have found ourselves on the same side of the barricade. Understanding BP’s negotiating techniques was a very good experience for us. After gaining this experience it has become easier for us to understand what exactly BP wants and needs in negotiations with SOCAR. So this kind of mutual experience has made our life easier. BP understands us better and we know what BP needs - a true win-win.
What are some of the issues lying ahead to be negotiated with BP?
Together with BP we have to work on ACG negotiations to extend the plateau of the field. And using this opportunity, I would like to wish success to BP all around the world, especially in Azerbaijan, and wish prosperity and good luck to everyone who works for BP.