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Frank Umbach: Azerbaijan's new gas field chance for EU energy policy

Oil&Gas Materials 16 September 2011 15:43
EU has a strategic interest at diversifying its future rising gas imports and not becoming too much dependent on Russia and Gazprom as its monopoly gas supplier, Frank Umbach believes.
Frank Umbach: Azerbaijan's new gas field chance for EU energy policy

Azerbaijan , Baku, Sept. 16 / Trend E.Tariverdiyeva /

EU has a strategic interest at diversifying its future rising gas imports and not becoming too much dependent on Russia and Gazprom as its monopoly gas supplier, Frank Umbach, Head of the Programme "International Energy Security" at the Centre for European Security Strategies, Munich-Berlin & Associate Director at the European Centre for Energy and Resource Security (EUCERS), King's College, London, believes.

"Therefore, the Southern Corridor with its planned pipeline and LNG-terminals offer the prospect for importing gas from the Caspian region as well as from the Middle East (both regions have even larger conventional gas reserves than Russia)", Umbach told Trend.

A more independent stance and diversified gas portfolio would also increase the EU's future negotiation position towards any third countries and oil and gas suppliers, Umbach said.

It would also lead to greater competition with positive impacts on the future gas importing prices, as the present and renewed Russian-Ukrainian gas price conflict and Russia's hard-nose insistence on its long-term contracts, previously agreed high prices (regardless a rapidly changing international gas markets such as spotmarket prices) and third party clauses (importing volumes regardless of the imports needs and not re-selling the gas to other parties) is highlighting again, Umbach added.

"The ceding of power of the 27 member states and de facto also private European energy companies to the European Commission to negotiate collectively with Azerbaijan and Turkmenistan has already historical dimensions", Umbach belives.

Umbach underscored, If the EU can agree with Azerbaijan and Turkmenistan on gas supplies and even a Trans Caspian gas pipeline, it would definitely also unprecedented and offer much better opportunities for preserving the EU's wider strategic interests in its future energy policies and beyond.

"These chance have also been improved with Total's new discovery of a major gas field Absheron in the Caspian Sea off the coast of Azerbaijan which may have reserves of 300 bcm of gas", - Umbach said.

President of Azerbaijan Ilham Aliyev briefed about discovery of large gas reserves on the Absheron field in the Azerbaijani sector of the Caspian Sea on Friday.

According to Total, which is one of the participants of the contract on exploration and development of the "Absheron" field, gas reserves at the field are estimated at several trillion cubic feet of gas and condensate according to initial assessments.

Participants in Absheron are SOCAR (40 percent), Total (40 percent) and Gaz De France Suez (20 percent).

The contract on the Absheron Field was signed on Feb. 27, 2009 between SOCAR and Total. Later Total sold 20 percent of its equity participation to Gaz De France Suez.

The first exploration well is being drilled from the Heydar Aliyev drilling rig, operated by the Danish Maersk Drilling Company.

The Absheron bloc is located about 100 kilometers from Baku at a depth of 500 meters.

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