Baku, Azerbaijan, Jan. 29
President of the Republic of Azerbaijan Ilham Aliyev was interviewed by Russia-1 TV channel in Davos on Jan. 21. Russia-1 TV channel broadcast the interview on Jan. 28.
President Aliyev answered the questions on the sidelines of the World Economic Forum in Davos.
Thank you very much for agreeing to answer our questions. What situation should we expect in the oil market and what could the prices be this year?
I think that everything will depend on how the agreements countries have reached within the OPEC+ format are implemented. Azerbaijan, for its part, has taken the necessary measures and made commitments to reduce oil production, and we are honoring these obligations. Therefore, I think that if all countries take a responsible approach to this issue, then the price will probably remain in today's range of $60-$70 per barrel. Although it is very difficult to make a prediction for the whole year, I think, and according to most analysts, this range may be realistic and also most suitable for companies, for exporting countries and for consumers.
At the end of last year, it was reported that American oil and gas companies decided to leave Azerbaijan after 25 years. What could be the reason for this decision and who can replace them?
This practice existed before. As you noted, Azerbaijan has been successfully working with international companies on the exploration and development of major oil and gas fields in the Azerbaijani sector of the Caspian Sea for 25 years. Over the years, some companies have sold their shares and others bought them. So it is a natural process.
I have to say that Azerbaijan's oil and gas projects are very profitable. Over the past 15 years, about $250 billion have been invested in our economy. Half of this investment is foreign and most of it was channeled into the oil and gas sector. Export oil and gas pipelines were also built, allowing us the opportunity to transport our oil in many directions. Therefore, the profitability of oil and gas projects is increasing today, of course. Each company has its own investment policy and strategy. Some prefer to leave a project by selling its shares.
Over 25 years, our main energy partners have long recovered all their costs and made a major profit. Therefore, I think that the decision of American companies to sell their shares is quite natural, and who will buy them will depend on who they offer them to. Of course, Azerbaijan as a host country of resources has the right to approve or reject these transactions. But, as a rule, all previous transactions have been approved by us.
It seems that the main rule in the world is the absence of any rules in relations between countries and in international trade. How dangerous is this?
You know, when decisions of international organizations are not executed or are executed selectively, when resolutions of the UN Security Council are also executed on a selective basis – in some cases in a matter of days and in some cases they remain on paper for more than 20 years – of course, all this leads to the devaluation of the international world order.
And the absence of rules or their violation is certainly fraught with consequences. In other words, trust is undermined and the level of interaction between countries is reduced. In fact, this leads to conflicts, to certain difficulties and tensions in relations between many countries. Therefore, the mechanism that has been developed, whether it is good or bad, exists. This applies to international relations, this also applies to economic issues and issues related to investment.
And we, Azerbaijan, are a country that always supports the rule of law and compliance with the norms of international law, including rigorous implementation of all decisions and resolutions of leading international organizations. Therefore, of course, it is sad to observe the present-day picture. This concerns, as I said, both international issues and the issues related to economic ones. Trust is undermined, predictability is undermined and it becomes more difficult to do business.
But again, returning to our country, I must say that both in international issues and in the fulfillment of our obligations under all contracts and investment projects, we are always fully committed to the letter and spirit of the documents we have signed.
Thank you very much!