BAKU, Azerbaijan, October 2. Increasing energy efficiency and ensuring that reduced gas consumption does not come at the expense of economic growth are critical priorities, said SOCAR President Rovshan Najaf at the opening session of the KAZENERGY Eurasian Forum in Astana, Trend reports.
"We discovered that there are a lot of opportunities for saving gas by switching to more energy-efficient solutions in both households and industries. And this also helps to, let's say, consume less gas that might be exported," Najaf noted.
He emphasized that declining gas consumption must be understood in context: "When we talk about Europe and we talk about decreasing the gas consumption, we always also have to look into why the volumes of consumed gas have decreased. Is it because of switching to alternative sources or because of the slowdown in the industry and economy? And for us, it's not the issue of decreasing gas volumes by decreasing industrial output, industrial production, and slowing economic activity. It should be rather alternative solutions that will, again, supply the same energy which is needed by the economy.”
Najaf warned that a slowing industry can undermine long-term stability: "When you have economic slowdown, you have problems in the economy. You will be pushed by the public to adjust your policies and you can go back to the policies that are not ensuring the best future for the region. And in that sense, when we talk about decreasing gas consumption in some countries, we should look to the reason why it happened".
Speaking on investment priorities, Najaf said all projects hold equal weight: "About the projects and priority, actually, all of them are priority for us because all of them are complementary. All of them can be implemented in parallel without harming each other, and actually implementing several projects in parallel, it helps to build a joint shared infrastructure".
He underlined the cost advantages of this approach: "If you mobilize some rig or some vessel for not one but for five, six, seven projects, you already save more costs for all these projects, and you also can create shared infrastructure like export gas or oil pipelines that can be used and utilized for all these projects. It helps to reduce the capex".
Najaf concluded by stressing competitiveness: "Nowadays, all projects in upstream compete with each other across the regions, and when you are making your investment decision, you are looking at the capex as a profitability. And the less capex you have,the more profitability you have because the price of oil and gas is almost the same across the regions. What way you can have your comparative advantage is the cost. And in that sense, having parallel projects implemented at the same time simultaneously helps to cut the cost".