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President Ilham Aliyev: â€œWe can provide ourselves and our partners worldwide with natural gas at least for 100 yearsâ€ â€“ INTERVIEW

President Ilham Aliyev: â€œWe can provide ourselves and our partners worldwide with natural gas at least for 100 yearsâ€ â€“ <font color=red>INTERVIEW </font>

02 February 2010 17:57 (UTC +04:00)

- Azerbaijan is a large oil producer. What do you think about the oil price?

- I consider that there is a fair price now. It meets requirements of both producers and consumers, and at the same time, it creates investment opportunity. Because, the price lower than present one creates difficulties for the companies to make investment in exploration and production fields. I think this price is balanced.

- Currently prices are rising. Let it exceed precisely hundred dollars, would you be satisfied with it?

- Oil price boost brought additional resources to our budget. But at the same time it created high inflation in the country and raised the consumption prices. I think the price should be 90-100 dollars to gain additional opportunities to maintain balanced development of the country and strengthen social welfare of the population. $70 is good too.

- The natural gas is very important factor for further development of Azerbaijan. Gazprom made proposal to buy Azerbaijani gas. What volume they propose to buy and what is your countryâ€™s capacity now to export the natural gas via the already exploited pipeline network.

- We are exporting the gas in different directions. It is very important for us because we achieved maximum diversification in gas transportation. The diversification is very important for not only consumers, but producers too. We are exporting the gas to the neighbor countries and of course, access of new market opportunities is important for every country. Our deal with Gazprom doesnâ€™t consider highest level of the export. We agreed that Gazprom will purchase gas in the volume we offer them.

- Does it mean any volume?

- Yes.

- What volume of gas can you export via the existing pipelines?

- The most important factor in this issue is the volume of output. Today we are keeping this volume in such level that we have export opportunities. If we have new export opportunities and markets, of course, we will make great investment to increase production. We cannot make tens billions dollars of investment to increase production without sale opportunity.

- And Russia does it as it is. Russian side agrees to buy the amount we can offer. So, it creates opportunity for additional investments, that is, isnâ€™t it a kind of Carte Blanche for you?

- We have great gas recourses estimated with 2 trillion cubic meters which can possibly be 5 trillion. Thus we can provide ourselves and our partners worldwide with natural gas at least for 100 years. Hence all the required works should be done. The advantage in our relations with Gazprom is that there is not any transit country between us. We have common borders and infrastructure.

- Iâ€™d like to ask you about the biggest gas field, Shahdeniz. Is it possible that the existing net of pipelines from Azerbaijan can cause the limitation or delay the biggest gas fieldâ€™s development?

-The cause for that can be mentioned not only by the transporting abilities of current infrastructure, but also by the issues of transit and the price of our gas. Shahdeniz gas field is one of the biggest fields in the world, consisting of 1.2 trillion cubic meters. We can expand the infrastructure. For this, we are planning to either build a new gas pipeline, or to expand the current network of pipelines. Therefore the issue of current pipeline network should not be accepted as one of the main obstacles. After solving transit problems and agreeing on a fair price, Azerbaijan and its foreign partners will invest billions of dollars for constructing a new infrastructure.

- You mentioned transit and price issues. Do you consider these factors as necessary conditions for agreement on nabucco and turning it into real project?

- In fact, Nabucco project is one of the main elements of South Corridor. This project can enable us to deliver our natural gas resources to the Western market. It includes Nabucco, TGI (Turkey-Greece-Italy) and TAP (Transadriatic pipeline) projects.

- Does it mean access to Western Europe via Georgia and Turkey?

- Yes. Therefore it is early to speak about the extension of infrastructure without solution of transit issues.

- You spoke about Nabucco and called it South Corridor, but they have same essence. The South Corridor considers transportation of Azerbaijani energy resources to the Western markets via Georgia and Turkey. What do you think, will it be realized indeed? There are talks about that.

- Itâ€™s difficult to say. A number of important steps have been taken in this direction. The political declaration was signed in May, 2009. Azerbaijan has also joined this declaration. Moreover, Nabucco members have reached an agreement on which form to push this project forward. There exist several elements to push this project forward. There must be a strong political will and financial recourses. As I mentioned before, solution of transit problems is the main obstacle. At the same time, marked price should be coordinated for our gas.

- You have stated that the main obstacles are the gas price and transit issues. Agreement on gas price for Turkey has taken much time. What makes this process delay?

- We export gas for Turkey from the first phase of Shahdeniz field. We do not have any problem from this viewpoint. The only problem is that the existing gas price does not meet the market price and it is not profitable for us from the economic standpoint. Our Turkish colleagues also agree with us on this issue. So, the prices should be reviewed.

- As Azerbaijani President, you are well aware of the energy wars and conception of alternative energy supply routes. What is Azerbaijanâ€™s political position in this regard? For instance, Russia says itâ€™s ready to purchase all Azerbaijanâ€™s gas. Is it related to business? If they buy all of them, there emerges a question â€“ What do pipelines fit for? Are you really committed to alternative energy supply route for Western Europe consumer from the political viewpoint or it does not meet the national interests of Azerbaijan?

- For us, itâ€™s completely economic issue. I can say from our previous experience that when we diversified our oil routes it was an economic issue. That is to say we needed a main pipeline for access to Mediterranean Sea. Baku-Tbilisi-Ceyhan was realized like this. At the same time, we have two more pipelines. Those pipelines take Azerbaijanâ€™s oil to the Black Sea coasts of Russia and Georgia. The same is also taking place in the gas field. This must be a commercial issue. One of the main problems of Nabucco project is that it has been politicalized very much. We have concentrated our attention on commercial issues. They must be attractive, just and coordinated. Balance of interests must be taken into consideration between producers, consumers and transit countries.

- Anyway, is the price issue main one that Azerbaijan focuses on today?

- This is one of the issues of primary importance. Another main issue is the diversification. We cannot depend on one route only.

- And the last question. When do Armenia and Azerbaijan reach peace agreement?

- Peace may be restored from the moment when Armenia will withdraw its occupying forces from the internationally-recognized territories of Azerbaijan.