Baku, Azerbaijan, Sept. 14
By Anvar Mammadov - Trend:
Azerbaijan has potential for increasing oil production, the senior director at Fitch Ratings international rating company Maxim Edelson told Trend.
Edelson said that the example of the US showed that one can find a way to increase oil production even on the best explored territory.
"Everything depends on how actively geological exploration is conducted, what technologies are used in drilling," he said. "Through the use of the right technologies, one can increase the efficiency of deposits and extend their life. So one shouldn't say it's impossible, it just requires investment."
Edelson went on to add that the costs for building production capacity can sometimes be just enormous, so Azerbaijan needs to highlight its gas projects.
"Such projects as the construction of the Trans-Adriatic Pipeline (TAP) and the Trans-Anatolian (TANAP) Pipeline should be very attractive for Azerbaijan," he said.
"Today, due to the geopolitical relations, Europe tries to reduce its gas dependence on Russia," he said. "Here, Azerbaijan can play a role of an initially small, but potentially, an increasingly important additional supplier."
Moreover, Edelson said that Azerbaijan will be able to become a transit country for supplying Turkmen and Iranian gas to Europe.
Azerbaijan's geopolitical position allows it to deliver not only its gas, but also that of Turkmenistan and Iran by increasing the pipeline's capacity in the future, he said, adding that this will also bring additional dividends to the country.
Edelson said in particular that the oil market is different from the gas market.
"Switching to the gas production can be a very wise strategy for Azerbaijan," said Edelson, adding that many companies in the world have already done this, since the gas market is less saturate and less competitive, unlike the oil market.
"Therefore, it would be beneficial for Azerbaijan to switch to expanding the gas production volume," he said.
As part of ensuring Azerbaijani gas supply to European market, the final investment decision was made on Dec.17, 2013 on the Stage 2 of the Shah Deniz offshore gas and condensate field's development. The gas produced at this field will first go to the European market (10 billion cubic meters), while six billion cubic meters of gas will be annually delivered to Turkey.
As part of the second stage of the field's development, gas will be exported to Turkey and European markets by expanding the South Caucasus gas pipeline and the construction of Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipelines.
The contract for development of the Shah Deniz offshore field was signed on June 4, 1996. The field's reserve is estimated at 1.2 trillion cubic meters of gas.
Edited by SI
---
Follow the author on Twitter: @Anvar_Mammadov