BAKU, Azerbaijan, Jan.22
By Leman Zeynalova – Trend
The new memorandum of understanding signed on Jan.21 between Azerbaijan and Turkmenistan on Doslug oil and gas field increases the overall potential and market power of Azerbaijan with Turkey and EU, and for Turkmenistan could be an additional outlet option for its vast reserve potential, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and Global Head Strategy Risk at Berry Commodities told Trend.
“Until now Turkmenistan has been constrained by its links to FSU infrastructure, competition with Russia and even in China! It could open also a potentially new geopolitical role of Turkmenistan. However, for both countries, they should need to play the European card very well, as only looking at Turkey is not a real advantage. A quick win will not bring the necessary revenues if Turkey-EU is not being dealt with,” he said.
Widdershoven believes that the main first option would be to bring this online, in cooperation between the both parties, and have a (partly) flow into the existing downstream and midstream infrastructure of Azerbaijan.
“Possible integration of the volumes into petrochemicals in Azerbaijan would be a real option at present. The second option could be to have it linked to existing infrastructure with Turkey or on long-term with Europe, but this needs to be assessed on products and volumes needed in these markets. At present, the real deal will be to bring this asap online/onstream looking at the low price settings of oilfield services companies, as it can make a huge difference in CAPEX/OPEX projections in future. If you can deal with a project right now, find the financing too, could make a difference in margins in future as is clear. Low price oil and gas is a major profit maker if you can keep your overall costs down.”
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