Term of agreement between SOCAR and Rosneft companies expired

Six months ago on August 13, 2013 State Oil Company of Azerbaijan (SOCAR) and Russian Rosneft company signed the agreement during the visit of Russian President Vladimir Putin to Baku.

Rosneft and SOCAR have agreed to establish a joint venture on a parity basis for the oil and gas exploration and development in various countries, including Azerbaijan and Russia, as well as the joint use of some pipelines and terminals.

Rosneft President Igro Sechin said later that “the agreement will allow the two companies expanding geography of their activities, getting access to the new markets and resources and optimizing the oil and oil products deliveries at the expense of joint use of the existing infrastructure.”

The sides have also notified the publicity that the documents signed in Baku had no juridical obligations: “If within six months the companies’ experts find an agreement on the mutually beneficial commercial projects, then a joint venture will be created on a parity basis for their implementation.”

At the end of August the sides discussed a reverse use of the Baku-Novorossiysk pipeline. They have considered a possibility of refining Russian Urals oil at Baku’s oil refineries and swap delivery of Russian oil via the Baku-Tbilisi-Ceyhan pipeline and delivery of the similar volume to Rosneft in Europe.

However, the two state companies failed to reach mutually beneficial contracts.—0—