BAKU, Azerbaijan, June 29
By Leman Zeynalova – Trend:
There are clear competitive challenges for uncontracted Caspian gas in core export destinations – the EU for Azerbaijan and China for Central Asia, Ashley Sherman, principal analyst on Wood Mackenzie’s Russia and Caspian upstream team, told Trend.
“Furthermore, governments are too accustomed to cheap gas at home. Domestic reforms are needed. This would boost the rationale for optimising upstream development concepts, substituting major capital projects with incremental tie-backs to existing infrastructure.
The region’s vast gas resources should be a blessing amid the energy transition, from deepwater Azerbaijan to Central Asia’s prolific basins. But, even as exports rise and exploration shifts towards gas, upstream economics largely remain liquids driven,” the analyst said.
Sherman noted that given the technical and financial obstacles at the Caspian’s largest projects, regional NOCs are not yet equipped to take greater operating responsibility. “But recent progress between Azerbaijan and Turkmenistan for the long-disputed offshore Dostlug field shows how cross-border partnerships could spread the capital load and foster collaboration.”
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