Will BP Do without Azerbaijan and Will Aliyev Do without International Support?

International business press reacted to the emotional speech by President Ilham Aliyev at the meeting of the Cabinet of Ministers on the socio-economic development for the 9 months of 2012.

The Forbes magazine estimates that relations between Azerbaijan and BP are far from rupture; the Azerbaijani authorities are just angry at the transnational corporation, which could really cost them more expensively (http://www.forbes.com/sites/matthewhulbert/2012/10/12/is-bp-on-borrowed-time-in-azerbaijan-yes-but-so-is-baku/?ss=business:energy).

According to the author, Matthew Hulbert, geologists in the early and mid-1990s, could assume a lot of things and draw the most delicate outlook. However, the realities of production make adjustments to the plans.

The consortium led by BP as operator spends about $ 2 billion a year to maintain the same level of production capacity in the fields "Azeri", "Chirag" and "Guneshli". And it looks like the next two to three years, costs are reduced. In order to get back to the level of 800 thousand barrels of oil per day (about five years ago, it was even more), you need to invest more money.

Since the conditions of the current contract will cease to operate in 2024, it is unlikely that the players ACG could get the maximum benefit from the project. It looks like a rebuke BP - political move Aliyev, calling those who want to become the operator of development and oil production, to be bold and to offer the best conditions. Aliyev understands what petrodollars "cement" of his political environment, therefore, wants to take more money, as computed at the same time compensating for their lost profits of $ 8.1 billion.

Subject of his speech irritable stretches wider "Azeri" - "Chirag" - "Gunashli" says Hulbert. Azerbaijani leadership has long positioned itself as a leader of trans-Caspian projects. On the one hand, the rich deposits of natural gas in the fields of "Umid" and "Absheron" offset losses in oil production, on the other hand, approaching a final investment decision on the "Shah Deniz - 2".

If, after the Caspian Sea Turkmen gas and Kazakh oil go via Azerbaijan, Baku will objectively rise at the heart of the Eurasian energy transit policy and will be the arbiter in many disputes. BP is interested in participating here, in addition, it is not indifferent to which route will flow gas to Europe and what the pricing formula in this case.

President Aliyev's monologue was caused, perhaps, by the fact that the leadership of the state oil company at a recent briefing voiced a desire to see Exxon Mobil and Conoco in the Caspian Sea as the closest partners. Sure, move the head of state is unlikely to mean "red light" for the current operator, but activates the global players in the oil field.

The author notes that the implementation of any energy plans Azerbaijan needs support of the international community, serious political guarantees, large investments and "always hot" information promotion. President Aliyev should not forget in a fit of temper who he is and what place on the geographical and energy map his country occupies. The consortium can do without Azerbaijan with its energy, in the case of BP they may quarrel hard not to notice that player, but the prospect of Aliyev and others like him in this case would be illusory. The final score yet is 1 - 0 in favor of multinational companies in the consortium, summed Hulbert. - 17D-