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Energy news
Bulletine Energy 

2017 November 01 ( Wednesday )  10:26:27
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Azerbaijani Parliament Ratifies ACG-2 Contract

Baku/01.11.17/ Turan: The total costs of the Azeri-Chirag-Gunashli (ACG) offshore block project in 1995-2017 amounted to $ 43.5 billion, of which about $ 35 billion was capital expenditures. Such a statement was made by the vice-speaker of the Milli Majlis (Parliament) of Azerbaijan Valeh Aleskerov yesterday at the plenary session of the Parliament during the discussion of the new contract on ACG, which was signed on September 14, 2017.

According to him, the state"s net profit within the framework of the project, which is accumulated in the State Oil Fund of Azerbaijan Republic, amounted to about $ 130 billion.

"Foreign investors have paid a profit tax of about $ 15 billion to the state budget of Azerbaijan within the framework of the project," he said.

Aleskerov added that when developing the project, the profit of the State Oil Company of Azerbaijan (SOCAR) was $ 5.9 billion.

The Vice-Speaker added that from the beginning of the ACG block development and up to now SOCAR donated 42 billion cubic meters (bcm) of associated gas.

Thus, Azerbaijan"s net profit in the framework of the ACG-1 contract amounted to $ 150.9 billion and 42 bcm of associated gas.

The contract for ACG development was signed on September 20, 1994 and entered into force on December 12 of the same year. Oil production on the block began in November 1997. Azerbaijan received the first profitable oil shipment in December 1999.

The term of this agreement expired in 2024. However, SOCAR and the partners in the negotiations reached an agreement on extending the existing one and signing the new terms of the contract until 2050. At the same time, with the entry into force of the new contract, the state"s profit will remain at the same level of 75%. However, the share of SOCAR will increase from 11.6% to 25%. The share of SOCAR will be increased due to a proportional decrease in the share of other shareholders. In addition, the foreign project partners will pay $ 3.6 billion to Azerbaijan as a bonus (annually at $ 450 million). The bonus refers to returnable investments to companies. Thus, Azerbaijan in the first initial 8 years (the period of relatively low oil prices, as well as a gradual decline in production volumes) receiving each year a $ 450 million bonus receives the opportunity to compensate for its losses. During the same period, the country hopes through the introduction of new energy projects, as well as the build-up of the non-oil sector"s potential, to be able to stabilize further growth in the economy.

According to the new contract, the share of the shareholders of the project will be as follows: BP (operator of the project) - 30.37%, SOCAR - 25%, Chevron - 9.57%, ExxonMobil - 6.79%, Indian ONGC - 2.31 %, Japanese Inpex Corp. - 9.31% and Itochu Oil - 3.65%, Norwegian Statoil - 7.27%, and Turkish TPAO - 5.73%. -12B-

Recep Tayyip Erdogan: "Some People Are Very Worried about the Export of Azerbaijani Gas to Europe"

Baku/01.11.17/ Turan: "The 6th meeting of the Council was held today (October 31 - ed.), and yesterday the opening of the Baku-Tbilisi-Kars railway was held. All this shows how strong the ties between Turkey and Azerbaijan are," the Turkish President Recep Tayyip Erdogan said at a press conference following the meeting of the High-level Strategic Partnership Council between Turkey and Azerbaijan.

"An excellent example of strong ties between the two countries is the TANAP project. With God"s help, in the near future transportation of Azerbaijani gas to Europe will begin. This fact bothers some people. There were also those who during the construction of the Baku-Tbilisi-Kars railway claimed that this project was unrealistic. On October 30, we opened this railway. Hundreds of thousands of people will travel by this railroad and they will be able even to reach London by it. A large amount of cargo will be transported by this railway, and it will prove its economic efficiency," the Turkish leader said.

Recep Tayyip Erdogan also noted that the trade turnover between Turkey and Azerbaijan reached $ 1.6 billion. -0--

SOCAR Trading Discusses LNG Supplies with Pakistan

Baku/01.11.17/ Turan: SOCAR Trading (the trading house of SOCAR) is negotiating for the supply of liquefied natural gas (LNG) to Pakistan, a source in the oil and gas market said.

According to him, SOCAR Trading successfully implemented the project with LNG in Malta, builds an LNG terminal in Cote d"Ivoire and intends to move in new directions.

"Active negotiations are currently underway with Pakistan. On February 28, 2017, an intergovernmental agreement on cooperation in the field of energy was signed between Pakistan and Azerbaijan, which directly includes the delivery of LNG. Since that time, negotiations have been under way with the relevant structures in Pakistan. The work is on, and the parties are discussing the terms of supply, price and volumes," a source familiar with the situation said.

Currently, Pakistan imports about 4.5 million tons of LNG annually. -0-

Russian MFA on New Negotiations on Caspian Sea

Baku/01.11.17/ Turan: The summit of the Caspian states can be held in Astana in early 2018, and the Foreign Ministers of Russia, Azerbaijan, Iran, Kazakhstan and Turkmenistan may meet in Moscow in December to discuss preparations for the summit. The State Secretary, Deputy Foreign Minister of Russia Grigory Karasin said this on the TV channel Russia 24, TASS reported.

"Work in this direction is on. Now we are trying to complete certain details of this document. Perhaps, it will be possible to gather the Foreign Ministers in Moscow sometime in December, so as to organize the final summit closer to spring. This time it should take place in Kazakhstan, most likely in Astana," he said.

Karasin noted that the Caspian Sea should become an example of interaction on the background of "unpredictable different approaches to major international problems". "And this will give an opportunity to all the five states not to wait for favours from extra-regional players, and not to wait for any more rapid development of the international situation. This will enable us to act independently and become an example of good regional interaction," he added.

The convention on the legal status of the Caspian Sea is planned to be signed at the next summit of the Caspian states. -0

NIOC Concludes First LNG Production Contract in Its History

Baku/01.11.17/ Turan: The joint Iranian-Norwegian company should use the Caribbean FLNG floating plant owned by the Belgian company Exmar for LNG production.

National Iranian Oil Company (NIOC) signed the first agreement in its history on the production of liquefied natural gas. The contract with the Norwegian company IFLNG provides for the organization of production in the territory of Iran and further marketing of the finished products.

In particular, under the agreement, the joint Iranian-Norwegian company should use the Caribbean FLNG floating plant owned by the Belgian company Exmar for LNG production. The plant"s liquefaction capacity is 500,000 tons per year, and its storage capacity is 16,100 cubic meters of LNG.

FLNG, most likely, will be installed in the service port serving the production platforms of the gas field South Pars, because there already has the entire infrastructure necessary for the operation of the LNG plant. The company will receive 2.3 mcm of gas per day from the fields of the region, according to LNG World News.

In fact, this project will be a great success for Exmar. Last year it turned out that Caribbean FLNG is not particularly needed by anyone. The LNG plant located off the northern coast of Colombia, was supposed to ship liquefied gas to the Caribbean and Central America.

However, the Canadian Pacific Exploration & Production (PEP), due to great financial problems, broke the contract with Exmar and declared its own bankruptcy. As a result, the Belgian manufacturer of floating LNG plants remained with a new brand FLNG on hand, and it had absolutely no place to apply.

And then in Exmar they remembered about Iran, with which the company has been negotiating on FLNG to work near the coast of Khark Island in the Persian Gulf since November 2015. Representatives of Exmar do not yet confirm that namely Caribbean FLNG will be rented to Iran, but there is no other completed floating LNG plant at the Belgian company. -0

Nord Stream-2 Spent Almost $ 1 Million on Lobbyists in U.S.A.

Baku/01.11.17/ Turan: The Swiss company Nord Stream 2 (Gazprom"s 100% subsidiary), which plans to build the Nord Stream-2 gas pipeline from Russia"s coast to Germany, spent at least $ 880,000 in July-September 2017 to lobby in Washington for their interests related to the implementation of the project in the face of new U.S. sanctions.

The company turned to the services of three lobbying firms. The contracts with them were concluded in July - even before the U.S. President Donald Trump signed a new law on sanctions, CAATSA.

Capitol Counsel has received $ 150,000 from Gazprom, Hawksbill Group received $ 80,000, and Roberti Global received $ 650,000, as it follows from the Nord Stream-2 disclosures in the database of lobbying activities at the US Senate. The company gave the firms the task to lobby "questions related to the US position in relation to the Nord Stream-2 pipeline, including the impact of potential financial sanctions on the project."

Roberti Global lobbied Nord Stream-2 interests in the Senate and US House of Representatives, and hired a subcontractor, SMW Partners, to lobby on behalf of Nord Stream-2 in the Executive Office of the President.

A representative of Nord Stream-2 confirmed to RBC that these companies were hired for "proper lobbying efforts in Washington". "It is important that U.S. lawmakers and stakeholders are properly informed about the project and its relevance to Europe," the Nord Stream representative said. "This activity is no different from communications carried out in the interests of other companies, organizations or governments," he explained.

Nord Stream-2 also has lobbyists in the EU, as it follows from the relevant EU database. The company"s annual budget for lobbying in Europe is € 400-500 thousand, plus it pays € 200-400 thousand a year to outside lobbyists. -0-

Americans Forbidden to Cooperate with Russia on Oil Projects

Baku/01.11.17/ Turan: The U.S. authorities have forbidden American citizens to assist Russia in oil projects. This is stated on the website of the U.S. Treasury. Corresponding amendments were made to Resolution No. 13662 of March 20, 2014.

These are projects related to offshore oil production, deep-sea mining, and oil production in the Arctic. As noted in the document, the new sanctions measures relate to projects starting from January 29, 2018.

"U.S. citizens are prohibited from providing, exporting, re-exporting directly or indirectly goods or services (excluding financial services), or technology to assist in geological exploration or production of oil in deep waters and on the Arctic shelf in the Russian Federation," the document reads.

The resolution also explains that the sanctions have been extended "to the energy sector of Russia" because of the armed conflict in eastern Ukraine. -0

Price of Brent Crude Exceeds $ 61 per Barrel for First Time since July 3, 2015

Baku/01.11.17/ Turan: The price of Brent crude for the first time since July 3, 2015 exceeded $ 61 per barrel on expectations of the extension of the Vienna OPEC+ deal to reduce production, RIA Novosti reported, citing data from the auction.

According to trading data, as of 21:41 (GMT + 4), the price of January futures for the North Sea oil blend of Brent grew by 0.79% to $ 61.02 per barrel. The price of December futures for WTI rose 0.55% to $ 54.45 per barrel. -0