Azerbaijan, Baku, April 27 / Trend /
Emil Ismayilov, Trend
The State Oil Company of the Azerbaijan Republic (SOCAR) will commission 30 filling stations under its own brand name in Ukraine this May. In doing so, the company in entering a new level of energy cooperation with Europe.
In this case, Ukraine acts as a springboard for SOCAR to sell its oil products on Central and Eastern European markets. SOCAR must make an appearance in European target markets in the form of a vertically integrated chain - oil, transportation, processing and petroleum product sales. In this sense, Ukraine is one of the promising area.
The project is attractive in terms of having open access through Ukraine's capacious market to Central and Eastern European and Baltic liquid markets, which are constantly fuel-starved. This will allow SOCAR to have a foothold in Europe and find a niche in terms of these countries integrating into the EU economy.
SOCAR will be able to sell its own oil on these markets from its supplies to Ukraine, as well as buy oil from Ukrainian refineries. Any Ukrainian plant with high quality oil and low prices will be an option. The company may also participate in a Ukrainian refinery.
Before acquiring a network of filling stations in Ukraine, Azerbaijani oil was supplied to the Kremenchug Refinery. Deliveries are carried out on a tender basis from ports on the Black and Mediterranean seas, to which Azeri Light is delivered via pipelines.
To support filling stations, SOCAR also acquired oil tanks in Odessa, which will allow the company to sell petroleum products on the Ukrainian market - both wholesale and retail through a network of filling stations. The tank farm will allow the storage of different types of products, reducing dependence on direct deliveries, and timely responding to the market situation.
Earlier SOCAR President Rovnag Abdullayev said acquiring the filling stations in Ukraine is a pilot project aimed at studying the market. The project is part of SOCAR's activity in Ukraine, in particular large-scale retail sales of petroleum products.
One cannot exclude the possibility that SOCAR's entrance onto the Ukrainian market through retail petroleum products sales will play a role in the implementation of major energy projects in the future. In particular, we can name the Eurasian oil transportation corridor centered on Caspian oil. Azerbaijan plays a major role in this route (Odessa-Brody-Plotts-Gdansk). However, Azerbaijan can alkso work as a transit and supply country not only of its own oil via the pipeline, but also of oil from Central Asia, for instance from Kazakhstan. This will strengthen the importance of Azerbaijan not only as a country-energy supplier, but also as a transit country, attract additional dividends and ensure the country's energy security.
Ukraine is not the first country where SOCAR has deployed a network of filling stations. Georgia also hosts 30 SOCAR gas stations. Its entry onto the Georgian market was an objective step because Georgia plays a transit role in the vast majority of Azerbaijani hydrocarbon. Today, SOCAR is close to open its filing stations in Azerbaijan whose number is expected to reach 26.
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