2012-08-09
Pipeline diplomacy – Interview with Azerbaijani Ambassador Rahman Mustafayev

Mr. Rahman Mustafaye. Ambassador of the Republic of Azerbaijan to the Republic of Albania with residence in Athens

 1.  Mr. Ambassador, recent decision of Shah Deniz consortium on Nabucco West selection and competition between two remaining options for Azerbaijani gas deliveries to Europe are in the focus of attention of energy and political experts. Please, brief us, where do we stand in the process of selection of final export route of Azerbaijani gas to Europe?

As you know, rather than opting for a one-step-approach, the Shah Deniz consortium (SDC) had decided to go ahead on the basis of a regional pre-selection. These 2 regions are: South East and Central Europe.

Last June SDC concluded its evaluation of potential gas export routes towards Central Europe. The Nabucco West project with a route running from the Turkish-Bulgarian border to Baumgarten (Vienna, Austria) has been selected as the single pipeline option for the potential export of Shah Deniz Stage 2 gas to Central Europe. Development of the South East Europe Pipeline (SEEP) project, which has been assembled by SDC in collaboration with Bulgaria, Romania and Hungary, had been turned down.

This decision was made on the basis of the publicly communicated  selection criteria announced in 2011. Based on the same criteria, in February this year SDC selected TAP as the potential route for export of Stage 2 gas to Italy. Since that decision the Consortium has closely worked with TAP, recently concluding a cooperation agreement with this project.

Now the SDC and its members, including State Oil Company of Azerbaijan (SOCAR), continue to work with the owners  of the two selected pipeline options in order to optimize their scopes, technical studies and commercial offers. After all these considerations, Consortium will make a final decision between two “finalists” and will conclude related gas sales agreements ahead of the Shah Deniz Final Investment Decision planned for mid 2013.

2. Two weeks ago you have been in Tirana in one team with bp officials, now you are planning to visit our country with the delegation of SOCAR. What is the purpose of these visits?

As I have already mentioned, we are now in the process of more close cooperation with the companies of two selected pipeline options and also with the governments of transit-countries, related to two these projects. For all members of SDC and for the Government of Azerbaijan it is of vital importance that we have two healthy and competitive options. So our joint mission to Tirana two weeks ago with bp team, headed by Mr. Alasdair Cook, bp Vice President for Shah Deniz Development, our meetings with the Prime-Minister Mr. Sali Berisha, Deputy PM, Minister of Economy, Trade and Energy Mr. Edmond Haxhinasto and Minister of Foreign Affairs Mr. Edmond Panariti had a clear message – we support TAP, as well as Nabucco West, we will cooperate closely with both options to see more benefits from them and to continue the development of  these projects into worthy competitors to each other.

Given that total investment on Shah Deniz would reach $40 billion, and that this project has enormous energy-security, commercial and even geopolitical importance, for the first time directly linking Caspian Sea with the European Union, we cannot be just spectators, passively awaiting the outcome of the competition. We are neutral and treat both projects equally, but at the same time we want to be proactive, supportive and fully engaged. That is why during our meetings in Tirana, I confirmed, that Azerbaijan is ready to invest in TAP now to help its members to develop the project. Needless to say, that this indicates the seriousness of our approach, because we understand, that if TAP is not selected as a final route then this investment will become loss for us.

But the main responsibility falls on the regional players. Azerbaijan cannot want progress of TAP more than the governments of Greece, Albania and Italy do. TAP needs full support from these countries otherwise it has no future. All necessary permits and approvals should be granted in all three countries, and inter-governmental agreements should be in place. Any delays in this regard may result in disqualification of TAP. As I always underline during my meetings in Athens and Tirana, since February on – when TAP was selected over ITGI – Greece, Albania and Italy make up one team, and its unity and coordinated performance are the only key to its success.

As far as SOCAR`s team upcoming visit is concerned, SOCAR is ready to cooperate bilaterally with the Government of Albania to decide jointly what benefits TAP could bring to Albania and how TAP could contribute to our bilateral cooperation in the field of gas sector development in Albania. We are ready to share with the Government, public and private companies of Albania our experience in the development of oil and gas sector, and are open to discuss privatization issues.

3. What can you say on the current status of Albanian-Azerbaijani relations?

Albania is a new, but very important partner for Azerbaijan. Not only because of gas pipeline and energy diplomacy revolving around it, but also because of the fact, that Balkan region is emerging to be one of the prior directions for our foreign policy and investment activities. Our investment cooperation could cover not only oil-and-gas sectors, but also non-oil sectors of economy, since, as you may be know, development of non-oil sector is the highest priority of Azerbaijani government. Just few figures to prove this – non-oil sector now amounts to almost 50% of the size of national economy, while non-oil GDP grew at an annual rate of 11.3% in the first half of 2012, comparing to the overall GDP growth standing at +1.5%, and investments to non-oil sectors of economy recorded an increase of more than 30% in the same period of time.

As for our bilateral relations, we had very successful official visit to Baku of H.E. PM Sali Berisha in February, during which Intergovernmental Agreement on investment protection and inter-ministerial MOU on cooperation in the field of industry and energy were signed. These documents have already come into force. Another five draft agreements covering different areas of bilateral cooperation are in the “pipeline” of consideration. We are working also on the organization of official visits of the Minister of Foreign Affairs and Minister of Youth and Sport of Azerbaijan to Albania later this year. Alongside with the establishment of basic legal framework of cooperation and keeping bilateral official visits and contacts on regular level, we are planning more educational and cultural exchanges and events, which will bring our countries closer to each other.

 Photo of the “Temple of Saint Elise” in the village of Kish, Sheki region of Azerbaijan.

The Temple was built in the 3rd century AD on the same place, where apostle Elise, who was sent to the Caucasus by Saint Yaakov, the first patriarch of Jerusalem with the purpose of expanding the Christianity in the East, founded in AD 78  the oldest ever church in entire Caucasus. Historians believe that this Temple is the earliest symbol of the birth of Christianity in the Caucasian Albania – ancient state that existed in the territory of ancient Azerbaijan for more than a millennium (from 4th century BC until 7th century AD). For its earliest origin “Temple of Saint Elise” is considered now as a sacred place even by the Muslim inhabitants of the region. The name “Kish” of this Azerbaijani village, which in modern Albanian means “church”, is the clear evidence, confirming  historical and cultural connections between Caucasian Albania and modern Balkan Albania.

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