BAKU, Azerbaijan, September 25. Ensuring energy security is currently the main priority for everyone, Saipem Regional Manager for Azerbaijan, Kazakhstan, Romania and Türkiye Ernesto Ferlenghi said at the 2nd Azerbaijan International Investment Forum in Baku today, Trend’s correspondent reports from the event.
He said everyone also recognizes the importance of oil and gas resources in the Caspian Sea.
“The key issue is delivering these resources to the end consumer. Bringing raw materials to the market requires substantial investment. The new reality I am referring to — the volatility of energy — creates additional pressure across the entire system. This means higher insurance and supply chain costs, more expensive equipment and facilities, and much greater difficulty in forecasting the future.
“Let us look at the specific situation in the Caspian Sea. Everyone wants to build new pipelines. But where are the parties ready to invest in these projects? The main challenges are technological difficulties, the need for innovation and a long-term industrial approach. Oil and gas investors know very well that capital invested today generates returns only after 10, 15 or 20 years. We need to understand that integrating infrastructure means increasing the value of oil and gas and bringing it to the market. This requires pipelines, production facilities, engineering solutions and investors,” he said.
He noted that the new reality required increasing pipeline capacity and creating reliable energy corridors from the region to Europe.
“Since Europe imports more than 70% of its domestic gas demand, it has a significant need for these resources. In this context, the role of local content is substantial. If you can source the products, equipment and services you need from the local market, this gives you a major cost advantage. It is very difficult to compete with the costs in the Caspian Sea.
“Much of the operations in the Caspian Sea depend on specialized vessels. Bringing a vessel or skilled personnel to the region is an extremely complex process. Currently, 55% of vessels used in the oil and gas sector are built in China. They are cheaper, faster and more competitive, but the overall paradigm is now changing.
“I think a long-term strategic vision needs to be developed between the Caspian region and Europe. On the one hand, investment in the region, new exploration and production activities, and on the other, ensuring that investors can generate returns from the end market are the key conditions,” Ferlenghi emphasized.
The second Azerbaijan International Investment Forum is currently being held in Baku. The two-day forum is organized by Azerbaijan's Ministry of Economy and the Azerbaijan Export and Investment Promotion Agency (AZPROMO), under the ministry, in strategic partnership with The European House – Ambrosetti.
The forum's plenary and panel sessions address strategic topics including the Middle Corridor, energy and the green transition, artificial intelligence and digital transformation, infrastructure, industry and free economic zones, critical raw materials, agribusiness, financial cooperation, small and medium-sized business development, tourism, and investment in real estate and human capital.
