Azerbaijan ready to increase oil transportation via Russia - minister

Oil&Gas Materials 7 September 2011 00:15

Azerbaijan , Baku, Sept. 6 /Trend, S.Agayeva /

Azerbaijan is ready to increase supplies of its own oil through Russia via the Baku-Novorossiysk pipeline, if the corresponding agreement will be amended to allow non-Azerbaijani oil to be transported via this pipeline, Azerbaijan's Industry and Energy Minister Natig Aliyev said Tuesday.

The talks on amending the intergovernmental agreement signed January 18, 1996 for transportation of Azerbaijani oil via Russia were held Tuesday in Baku.

According to Natig Aliyev, the agreement worked efficiently for 15 years, but over time the Russian side expressed its desire to amend it.

Today, the agreement between Azerbaijan and Russia for oil transportation clearly provides that only oil of Azerbaijani origin can be transported via the Baku-Novorossiysk oil pipeline. Cancelling this item will make it possible to transport oil from other countries, such as Kazakhstan or Turkmenistan that today is being transported via Azerbaijan.

According to the minister, the sides also discussed the tariffs issue. Today, the cost of pumping one tonne of oil (from Azerbaijan's border with Russia to the tanker) is 15.67 dollars.

According to Natig Aliyev, the tariff remains in force. However, the parties are working to determine the amount after reaching which the tariff will begin to reduce. This, according to the minister, will increase the volume of oil transportation.

"These issues are on the agenda. I think that their solution will be favourable to Azerbaijan," Natig Aliyev said.

Within 10 days SOCAR (State Oil Company of Azerbaijan) and "Transneft" (Russian oil transportation monopolist) will prepare their proposals on these issues.

The bilateral Russian-Azerbaijani inter-governmental agreement on the transit of Azerbaijani oil via the Baku-Novorossiysk pipeline was signed in 1996. It provides for transportation of 5 million tons of oil a year at the rate of $15.67 per one ton of transited oil.

SOCAR transships its own oil, as well as oil of joint ventures and operating companies operating in Azerbaijan's onshore fields, through Novorossiysk.

In 2012, SOCAR plans to pump 1.7 million tons of oil to the Baku-Novorossiysk compared to 2 million tons in 2010. The decline in oil pumping is linked with the increased consumption of petroleum products within the country, and the growth of processing at local refineries.

In 2008, SOCAR exported 1.2 million tons of oil via the Baku-Novorossiysk compared to 1.2 million tons of oil in 2007, which is the same in 2006. In 2005, the figure was 1.6 million tons.

Until late 2007, AIOC was the operator of Baku-Novorossiysk. The structure then transferred these functions to SOCAR.