Role and participation of Azerbaijan in ensuring energy security of Europe
Orkhan Aghayev Business Statistics, UNEC
Introduction
After the restoration of state independence in 1991, the Republic of Azerbaijan has begun to implement its sovereign rights in the economic sphere and pursue an independent policy. The main directions of this policy are the economic system created on the basis of different forms of ownership, transition to the market economy and integration into the world economy. In the early years of independence, one of the most important directions of Azerbaijan’s foreign policy was energy policy. There are several directions of the energy policy of Azerbaijan, it is possible to emphasize two of which are more important. The first one was about its contribution to providing internal energy security of Azerbaijan and the second one was about the contribution to providing energy security of other states. From this point of view, the creation of new opportunities for the development of Azerbaijan’s energy resources, as well as ways to bring these resources to international markets, is of great importance.
The deepening of large-scale reforms in our country in the early years of the 21st century create conditions to the rise of our society to a higher level of socio-economic development. Important steps have been taken to improve the investment condition in the country, state administration has been rebuilt in accordance with modern criteria.
As a result of the implemented economic policy, the energy security of country has been provided, and Azerbaijan has become a reliable exporter of energy carriers and the most important transit center in the region. Large projects implemented in order to extraction of hydrocarbon reserves and delivery to European markets has created conditions for Azerbaijan to occupy an important place in the oil and gas supply of Europe. [1] The fact that the region of the Caspian Sea is an important hydrocarbon source for the world did not disappoint Europe’s attention. Western analysts note that Azerbaijan is the country that creates the highest level of cooperation with major oil companies in the Caspian Sea, and the West’s cooperation with Azerbaijan in the exploitation of energy carriers is highly appreciated.
As a result of the policy pursued by the government of Azerbaijan large projects have been signed to ensure global energy security today.
Renewable energy sources such as wind, solar, biofuels has a especial importance in terms of ensuring global energy security and global warming prevention. In particular, the fuel crisis in the 70s of the twentieth century forced the world countries to think about renewable energy sources. In the directive of the EU on renewable energy sources adopted in December 2008, each country is required to increase its share of energy use and in general it is required to increase this volume within the union from 8.5% to 20% by 2020.
Under the years, this increase should be stage – by – stage as follows:
Average 20% in 2011 and 2012;
Average 30% in 2013 and 2014;
Average 45% in 2015 and 2016;
Average 65% in 2017 and 2018.
As can be seen from the table, EU’s future consumption of gas will continue to grow due to imports, and the Caspian region, especially Azerbaijan, will play a major role in meeting this demand. The place and role of the Caspian region in the energy world space is increasing day by day. [2] This is due to the fact that the Caspian Sea countries are considered to be the second most important geo-economic region in the world after the Persian Gulf region, as well as the Baku-Tbilisi-Ceyhan oil pipeline is the route for delivering the world’s safest energy products to world markets and consumers.
The oil and gas factor plays an important role in strengthening the economic and strategic cooperation of Azerbaijan with the West. It has created a reliable ally image of our country in the West for its activity in ensuring energy security of Europe. Oil is the richest natural resource of our Republic and it has an indispensable role in the development of the country’s economy.
Table 1: Gas import potential of Europe in 2002 and 2020 Source : EU Energy Portal
| Volume (billion cubic meters)
|
Growth rate
|
||||
| Suppliers | 2002 | 2020 | Growth (2002 – 2020) | 2002 | 2020 |
| Russia | 126 | 200 | 74 | 63% | 39%
|
| Africa | 65 | 199 | 134 | 33% | 37% |
| Near East | 7 | 100 | 93 | 4% | 18% |
| Caspian Sea | 0 | 16 | 16 | 0% | 5% |
| Other | 1 | 3 | 2 | 1% | 1% |
| Total | 199 | 518 | 319 | 100% | 100% |
The large oil strategy, which foundation was laid by national leader Heydar Aliyev, created unavoidable condition for the realization of the “Contract of the Century” signed in 1994 with the participation of 33 companies from 15 states. [3] It was the first international oil agreement signed by the Azerbaijan Republic, and from the first day with the name, historical significance and strategic essence considered for the future has occupied its most worthy place in our independence chronicle.
In recent years, the large projects have been developed not only in our country, but in the region and the European continent among energy security – related issues. It includes the “Shah Deniz-2”, “ TANAP” and “TAP” projects can be especially emphasized. The worthy successor of the great leader Mr. President Ilham Aliyev has made a very good statement: “Shah Deniz – 2”, “TANAP” and “TAP” are one of the world’s largest energy projects. $ 45 billion investment will be involved to the project, over 30,000 new jobs will be created in countries located along the route. Of course, this project will require additional efforts.” At the same time, the head of our state has declared confidence that the “Shah Deniz” project will change the European energy map.
Of course, the “Shah Deniz – 2” project is a energy security project. The energy security of each country is inseparable from its national security. One of the key elements of energy security is natural gas. Therefore, energy security and diversification of energy are equally important for the producer country like Azerbaijan, as well as transit and consumer countries.
Within the framework of this project, 16 billion cubic meters of gas will be extracted during the year will be delivered by pipelines extending over 3,500 kilometers to Italy through territories of Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and the bottom of the Adriatic Sea. As can be seen, Azerbaijan supports natural gas volumes extracted to meet the Europe’s gradually increasing energy demands, for this purpose, supports the diversification of transport routes.[4]
One of the most advanced projects in the implementation of the Southern Gas Corridor is the “TANAP” project. Many experts consider this project the most important energy project in Azerbaijan. “TANAP” is almost the biggest opportunity for Azerbaijan to integrate into Europe’s energy markets, as well as to strengthen its position as a safe transit state. In the long – term perspective, the project will increase the country’s natural gas exports from 8,1 billion cubic meters nearly to 24 billion cubic meters in a year. [5]
With the help of the “TANAP” project, Turkey will have to take a step closer to solving the problem of weak gas reserves with an annual consumption of 5%, this indicator is equal to 20-30% in European countries. [6]
According to the initial agreement, annual gas supply to Europe, which will be transported by “TANAP”, will be about 3-4% of Europe’s gas imports, with about 20 billion cubic meters of gas supply will be about twofold of this indicator. According to the European Commission, if the necessity arises in the long – term perspective, the European Union (EU) may increase the volume of gas imported through the Southern Gas Corridor by 80-100 billion cubic meters. [7]
The Southern Gas Corridor, which takes place in a global environment of cooperation, will contribute to the energy supply of the Balkans by connecting pipelines to energy security in a broad geographical area. The Southern Gas Corridor and “TAP” project which is the part of it, on the one hand, offer a new source and a route to Europe’s increasing energy demand. The “TAP” project will put the gas from the Trans-Anatolian pipeline from the Greek and Turkish border to the Southern Italian market. At the same time, Albania, Bosnia and Herzegovina, Montenegro, Greece, Croatia as well as Bulgaria will be able to buy “blue fuel” through internal networks from “TAP”. From this point of view, it is possible that the Azerbaijani gas is already entered the European market. The “TAP” project almost serves the purpose of energy diversification and, on the other hand, allow the implementation of clean energy source in the countries which much use coal.
Signing of the final investment decision on “TANAP” and “TAP” projects, as well as the “Shah Deniz – 2” project, which is of exceptional significance in ensuring energy security of the region and Europe, being effective in the development of the country’s economy is of exceptional importance in improving the welfare of the population and the socio-economic development of our country.
This project will pass from the Georgia territory the first at first and it will secure the energy safety of this country and it is Georgia reliable partner how do you think for Azerbaijan in the fulfilment of this project ?
Azerbaijan and Georgia, as independent states, are actively cooperating in all spheres, working together on issues of territorial integrity and in international events – within the UN, the Council of Europe and other international organizations and always supporting each other. As it is known, territorial integrity of the both country, normses of international law have been disturbed in the rough picture simply
Neighboring republics are merged with Azerbaijan through global energy, transport and communications projects such as Baku-Supsa, Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum and TRACECA. In parallel, cooperation between GUAM, the Black Sea Economic Cooperation Organization and other organizations has further strengthened bilateral strategic ties. With this parallel, two-sided strategical connections of collaboration have more strengthensed in the inside of Georgia-Ukraine-Azerbaijan-Moldova, Black Sea Economical Collaboration Organization and other organizations
Georgia is one of Azerbaijan’s closest allies in the region. Georgia is one of Azerbaijan’s closest allies in the region.
Azerbaijan will be able to play the part but what as in the energy safety of the Georgia. First, Georgia is not dependent on an energy source, so it is risky for the state to negotiate with Russia’s gas monopoly, which will not only cooperate with the Russian Gazelle. Negotiations with Gazprom are of political nature and are aimed at weakening the country’s energy security. Secondly, Azerbaijan is an alternative source of gas and is a strategic partner.
Turkey is the second important country in the implementation of energy projects Azerbaijan is the most reliable partner of Turkey as a transit country in ensuring Europe’s energy security.
The Azerbaijani-Turkish relations, formed on the basis of mutual trust and solidarity, continue on international platforms. Both countries are cooperating in the United Nations, the Organization for Security and Co-operation in Europe, the Council of Europe, the Black Sea Economic Cooperation, the Turkish Council and the Organization of Islamic Cooperation.
54% of the Turkey market, or my 25 Central Committees are about natural gas to the “Qazprom” company in the year. According to prognosis gave in 2012 such “Botaş”, need of Turkey should dig naturally and need of Turkey will increase to two times near in 2030 and it will reach 81 Central Committees from of 46 Central Committees. But to secure energy safety, to reduce dependence from foreign countries, use interfering to energy sector from source of local energy in the production of the electric energy of official Ankara prevent the purpose use from natural gas as tool against Ankara of by these countries has incited from geopolitical point of view
As a result, this policy has already begun to give its results more than it is expected. So, in 2015, 1.5% of the demand, 4% in 2016 and 0.6% in 2017 (46 mcm) were observed.
Turkey is poor country in spite of these from point of view energy sources. And meet 11% Azerbaijan and Iran of the general need of this country role in the first place second big gas exporters of the Turkey in the energy safety of the Turkey separately. Secure from these sources for big Turkey needy to energy import in the stable picture of the energy assumes special importance
Secondly, there are more than one transit pipeline across Turkey. This includes mainly international and major energy projects in Azerbaijan. This situation gives Turkey a few opportunities. First and foremost, it is: (1) to provide the energy needs of its domestic markets from alternative sources. Secondly, as a candidate country for the European Union, it is becoming an essential energy supplier of this organization and strengthening its full membership position. 3) By using its geopolitical position, it is a bridge between the world’s energy consumers and manufacturers, trying to get both political and economic dividends. As Turkey is a transit country, it also wants to be an exporter of oil and natural gas from other countries to its territory. Azerbaijan plays a major role in Turkey’s energy security.
Traditionally, Russia, the Middle East and the Middle East were the main energy suppliers of Europe. The Iraq war, the sanctions imposed on Iran have actually led Europe to depend on Russian oil. That’s why Europe and Russia are interested in buying oil from the Caspian Sea. First, Europe does not depend on its monopoly to reduce its energy needs from the Russians. The second is Azerbaijan’s favorable position in the energy security of Europe to meet its own demand for extractive industries and to pursue other political interests.
Conclusion
The energy factor in the foreign policy of Azerbaijan continues to maintain its important position. Even though noticable changes have taken place in Azerbaijan’s general foreign policy strategy during the rule of the various leaders, Azerbaijan’s energy policy has been focused on mainly similar targets for over 25 years. Azerbaijan, in the result of these policies, is now able to provide its own energy security, as well as play a key role in the ensuring energy security of some other states.
At the Paris office of the European Parliament, at the international conference on “Azerbaijan as a strategic partner for the energy security of Europe” First Vice President of the Republic of Azerbaijan, President of the Heydar Aliyev Foundation and Azerbaijan Culture Foundation, Goodwill Ambassador of UNESCO and ISESCO Mehriban Aliyeva stated in her speech about it: Azerbaijan was the first country to extract oil through industrial methods 150 years ago. In 1901, 50 percent of the world’s oil was extracted in our country. The first oil boom took place along the participation of other key participants, including Nobel brothers, Shelly Transport and Rothschild Banking House. In the Second World War, Azerbaijan without assistance provided more than 70 percent of the Soviet Union’s total oil supply, and this was a major contributor to the Victory over fascism.
After restoration our independence in the late twentieth century, Azerbaijan has created such an investment environment that many leading energy companies of the world have begun investing in our oil and gas sector.
By signing the “Contract of the Century” in 1994 with the consortium consisting of the leading oil companies of the world, Azerbaijan for the first time in the history has opened the resources of the Caspian Sea to the international arena.
Azerbaijan has ensured its energy security and is contributing to the energy security of partner countries now.
One of the greatest achievements of Azerbaijan was the construction of the Baku-Tbilisi-Ceyhan pipeline. It linked up the Caspian and the Mediterranean seas for the first time in history. We also play our role as a transit country in providing access to oil suppliers from the eastern shore of the Caspian Sea to European and international markets. We are a reliable country in transit, as in the supply.
Another historic achievement was the construction of the South Caucasus gas pipeline, which has opened a corridor for the export of our gas.
Azerbaijan is a reliable partner for Europe. Our approach to energy security is that energy resources should not be separated nations and peoples, on the contrary, should be unified. Energy resources should not serve competition or conflict,but should serve regional and international cooperation. The interests of suppliers, transit countries and consumers should coincide and should lead to more prediction and mutual benefit. This is the energy philosophy of our country. [8]
Literature list
1) “Azerbaijan 2020 Outlook to the Future” development concept, approved by Decree of the President of the Republic of Azerbaijan dated December 29, 2012
2) www.eurasianet.org and https://www.energy.eu/publications/
3) The People’s newspaper – 2009. – August 25 – S. 1; 2
4) People’s newspaper – 07.04.2014
5) Asian Infrastructure Investment Bank, Republic of Azerbaijan: Trans-Anatolian Natural Gas Pipeline (TANAP) Project, 7 December2016 https://www.aiib.org/en/projects/approved/2016/_download/trans-anatolian/document/tanap -project-document.pdf
6) In the same place, p. 6
7) Interfax Global Energy, 5% increase in Italy’s Gas Consumption in 2016, June 14, 2017 <http://interfaxenergy.com/gasdaily/article/26363/italian-gas-consumption-up-5-in- 2016 p 6
8) https://heydar-aliyev-foundation.org/en/content/view/54/594/Paris International Conference