Turgay Teymurov, EY Assurance Partner speaks at Russia & CIS Oil & Gas Executive Summit (PHOTO)
Baku, Azerbaijan, Feb.19
The Summit is a leading platform for senior level oil & gas leaders, experts and executives involved in shaping the industry's future in Russia and the CIS and the world.
The Summit's first session was dedicated to an overview of global market trends and to the outlook for the future. Turgay Teymurov participated in this panel, making a presentation on "Caspian Oil and Gas Trends in the Global Context." The presentation focused on global economic trends that impact oil prices, energy supply and consumption and gave an overview of exploration and development projects in the Caspian region.
"The drop in oil prices has been dramatic, driven by weaker global demand, US shale oil success and other factors such as Libya and Iraq, as well as by the OPEC decision to maintain production levels. We have recently seen a rebound of prices on the back of continued reduction of drilling rigs in the US, spending cuts and delays in major projects. We are still in the contango zone, which means that oil futures are higher than current oil prices. The forward curve and expert estimates indicate that the Brent price could go up to $70 by the end of the year, but volatility is very high," said Turgay.
Turgay also discussed the key challenges in the energy industry in the Caspian region and provided an outlook for energy projects there. "All the countries in the region have been impacted by the fall in oil prices. The macroeconomic environment is different, but we have common issues. Russia and Turkmenistan have seen sharp drops in their currencies; Kazakhstan's tenge has been stable recently after devaluation early in 2014.
At the same time, the Azerbaijani Manat has been strengthening against most world currencies due to the fact that the Central Bank maintained stable USD/AZN rate. Recently the Central Bank announced a change to this policy by adding the euro in consideration. Azerbaijan has large foreign currency reserves, which gives it enough power to maintain the stability that remains the highest priority of the government," said Turgay.
"Another common issue in the region," he said, "is the status of the Caspian Sea. Discussions continue and it would be very good to see substantial progress in this area. Azerbaijan has been very successful in developing its O&G resources and would be able to share its experience with neighboring countries if disputed fields are jointly developed."
"As for existing projects, ACG has managed to stabilize production and Shah Deniz stage 2 realization is going in accordance with plan. There are a number of challenges, of course, including those pertaining to obtaining permits and potential competition from other projects. We confronted some of these issues during construction of the BTC pipeline, which has been a huge success, so I hope we will achieve similar results with the current level of support from the US and the EU, project shareholders and the countries involved," Turgay concluded.
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EY made a major commitment to Azerbaijan and the region with the opening of our office in Baku 20 years ago. Today, in addition to being the leading audit firm in Azerbaijan, we are the leading firm in the region. Because of our experience and depth of knowledge, we have been able to assist both domestic and international companies as well as state-owned entities in developing and in facing the challenges of the international economy.
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