Azerbaijan, Turkey at Odds over Nabucco

The Nabucco pipeline project: Is it hitting a snag?

BAKU (Hürriyet Daily News)—Azerbaijan has questioned Turkey’s attitude to the Nabucco pipeline project after Baku failed to receive a copy of the signed contract from Ankara, according to a top official from the Caspian nation.

“Unfortunately nobody sent us the copy of this Project Support Agreement,” Elshad Nasirov, the vice president of the State Oil Company of Azerbaijan, or SOCAR, told the Hürriyet Daily News during a recent interview. “And we will not ask for it, because this will violate the principle of equal treatment for … three projects – Nabucco, the Trans Adriatic Pipeline [TAP] and the Interconnection Turkey-Greece-Italy [ITGI].”

Azerbaijan was the only project partner absent when the legal framework for the Nabucco Pipeline was reportedly signed and finalized on June 8 for the project support agreements, or PSAs, between Nabucco Gas Pipeline International GmbH and the responsible ministries of the five transit countries, Austria, Bulgaria, Hungary, Romania and Turkey.

The signature ceremony was organized just before Turkey’s June 12 general elections in the Central Anatolian province of Kayseri, where Turkish energy minister was running for a seat in Parliament.

The agreements were described by the Nabucco consortium as the affirmation of an advantageous regulatory transit regime under European and Turkish laws, protection against any discriminatory changes in said laws and support for legislative and administrative actions for the implementation of the project.

Nasirov also said an obligatory bilateral transit agreement between Azerbaijan and Turkey to make the project a reality had not been signed yet eithe.

“We were very close to signing this agreement in April and May. But some minor and some important things prevented two parties to agree and finalize it,” said Nasirov.

“As we understand, this agreement supports the further implementation and development of the Nabucco concept. But I would like to ask you, does this signature of the project support agreement mean the decision of the Turkish Republic was made to start the transit of gas from Azerbaijan? And if it does, why don’t we sign the bilateral transit agreement in order to enable the two other projects? If we have not yet signed the transit agreement, should we understand that Nabucco has still not been sanctioned by Turkey?” asked Nasirov.

For the ITGI and TAP, Nasirov said that in order to transfer gas through Turkish territory, there needs to be a transit agreement between Turkey and Azerbaijan. “So these projects also cannot be implemented without a transit agreement.”

Little time left to find Nabucco investors

Nasirov said there were also investment problems for Nabucco. “Azerbaijan has sent messages to European countries many times asking for an offer to invest. But we haven’t heard anything from Europe yet,” said Nasirov.

Nasirov drew attention to the fact that there were still plenty of legal and commercial issues to be agreed on as part of the Nabucco project.

“We have very limited time for these issues, we only have two and a half months left now,” Nasirov said.

Second project: Şahdeniz II Project

Nasirov said another Azerbaijani energy project, Şahdeniz, was huge, sophisticated and very expensive.

“The shareholders have to invest 20 billion to 22 billion dollars just to start the production. Therefore, in order to find out how commercially feasible the Şahdeniz project is, we have to very carefully calculate what the sale price and transportation cost for the sale of gas in the markets outside Azerbaijan will be,” Nasirov said.

Regarding the United States’ open support for the Şahdeniz project, Nasirov said, “We don’t want to be involved in games wherever or however they are being played.”

“We don’t think we will be involved in competition; after the Fukushima disaster in Japan, the demand for gas will only increase. And the gas of Azerbaijan will not and cannot make any negative effect on the other suppliers,” he said.

Nasirov also said Azerbaijan did not want to depend solely on one buyer for gas in the region. “Russia wants to buy all the gas we have, but we do not want to commit to only one buyer – we prefer diversity among the buyers, so we sell gas to the EU and Iran, as well as Russia,” said Nasirov.

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20 Comments

  1. Ron said:

    Armenia can and should find ways and do everything possible to blockade construction of any new pipelines near it’s territory as the additional revenues generated from those pipelines will make the situation even worse and peaceful resolution impossible. Just as Turkey and Azerbaijan are blockading Armenia, Armenia should do the same with whatever resources it has. Best solution would perhaps be to make the appearance that the region is so unstable that any further investment in such endeavors would be waste of time and money.

  2. Araxi said:

    The great ‘Opera’ has come to an end. Azeris should learn a thing or two from this.

  3. Jahir said:

    So green with envy, I see. No worries. The pipeline will be laid down. The oil will flow out. Money will flow in. Everyone in the region will be rich. Left behind will be Armenia. And dont you worry about Azeri-Turkish disagreements. It is all part of routine business haggling (even between two brothers).

    • Avery said:

      Jahir:

      let the pipeline be laid down: oil is your curse.
      name me one oil producing country whose people live well. It’s super-rich and poor: no middle class.
      Outside of shiny Baku, rest of Azerbaijan is mired in poverty. About 500,000 of your people that were asked to leave by Artsakh’s property owners still live in shipping containers.
      Oil wealth breeds corruption and graft.
      Armenia does not have the easy oil wealth of Azerbaijan, but we have something more valuable and permanent.

      When your oil runs out in about 5 years, what will you eat ?

    • Araxi said:

      Quote “. the money will flow in and everyone in the region will be rich” unquote.
      So you mean to say you don’t know where all the money goes? It does not go to everyone, it goes into the Aliyevs child’s account in Dubai and other banks in the Arab world, yet the real azeris live in squalor.
      The azeri people are due for an ‘Arab Spring’ style revolution against the autocratic ruler of you country.

    • Armenia_On_Suicide_Watch said:

      I think you are right. The Turks and Iranians are masters of haggling. The Armenians are hard workers but they are hopeless when it comes to anticipating future outcomes. This is why they shot themselves in the leg in 1915 – and they got a disproportionaly cruel lesson which seems to have faded from their collective memory. Let’s hope President Sarkisyan loves Armenia enough to make the necesary concessions that will herald an age of peace and prosperity for all the caucasus nations. As an outsider living in Armenia I can witness to the fact that these people really need and deserve a break!

      • Araxi said:

        You can take president Sargisian to your country. We feel he is not working for us. Perhaps he can build your country instead of devastating ours.

    • Grish Begian said:

      Where there is oil there will be blood …look around Middle East, you will get the answer, one dictator goes next will be in …that is the name of “oil games” and Sultan alioff is belong to Ghadafi dynasty, in 10 years or so he will be dead by his beloved Turkic tribes, the time will be changed to another blood sucker, yet you people will leave below poverty level as most of you are living today, then you will be envy of Armenians, where they will rule South Caucasus!!

  4. John K. said:

    Turkey will use the closed Turkish border to blackmail Azerbaijan to get what it wants, or else it may open the Turkish border to Armenia.

  5. Hayq said:

    I think they should build the pipeline. Azerbaijan should also be forced to pump 5 million barrels a day. They hit peak oil already, so once this field is done, its onto bigger and better things.

  6. Harout said:

    The best thing Armenia can do to blockade the Turks and Azeris back is to take Javakhk and cut off Georgia from Turkey and access the black sea. The Turkey-Georgia region as well as Javakhk is all historically Armenian territories. The Armenian Hamshen of Abkhazia can thereafter also have a connection to the Hamshen of Turkey, and west Armenia can then be a possibility for the future.

    • Avery said:

      Harout, will you go there to fight and possibly die ?

      how do you ‘take’ Javakhk ? invade Georgia ? what happens the minute Armenia invades Georgia, Azerbaijan attacks Artsakh ? how is Armenia going to fight on 2 fronts ?

      Do you think Armenia is Russia ? do you know the size of Armenia’s Army ?
      I can also write all sorts of fantastic war scenarios: but who will be the first to volunteer to die – you ?

      Defending your homeland from invaders is one thing: invading a neighbor that has not attacked you is something else entirely. Even Russia with all its might waited for Georgians to attack South Ossetia before intervening.

      • Harout said:

        Let’s face it, Georgians are part of the problem, not part of the solution. First of all why don’t you ask the people of Javakhk whether they live in freedom, or under misery and threats. Maybe Georgia did not attack us, but their backstabbing and treachery is a lot worse. And their leader Stalin played jigsaw puzzle with Armenia, and Armenia is suffering from this ever since then. I am not advocating invading Georgia outright, but I wish something would happen to put the arrogant Georgians in their place. Turkey and Azerbaijan are benefiting from the Armenian Genocide, and Georgia is benefiting from Stalin, all at the expense of Armenians.

        I truly believe that Armenia cannot act without Russian approval. By the same token, it will not allow Azerbaijan to attack Armenia, if it does Russia will get involved. I also believe that Artsakh is fully capable of defending itself.

        It is easy to try to discredit someone posting ideas to ask them if they are willing to do the fighting, because I believe you are talking about yourself more than about me. If that situation comes up where my services are needed in my homeland, the answer is yes, I will go and do my part the best that I can.

    • Armenia_On_Suicide_Watch said:

      Have you overdosed on prozac? Are the “Hamshen of Turkey” aware of the role you have designated for them in your “brilliant” strategic scenario? The Hamshen living in Turkey have been muslims and Turkecized for centuries and most of them have forgotten their native language or just use a few words and phrases (which consequently also do the Non Hamshen in the region of Hopa and Rize). Instead of making pie in the sky predictions about taking chunks of Georgia and blockading Turkey (yeah right!) how about some constructive advice on how to strengthen Armenia’s economy to prevent most of its younger gneration from leaving it.

  7. Harut said:

    Tha Nabucco pipes are drawn on the Armenian land western Armenia and i beleive strongly that te day will come were they have to pay us for using our land that is when the Armenian Genocide ir recognised nd reparations are in its way, but than again i dont see theNabucco pipe line going into plans any timesoon
    frankly i beleive the Elite or the world superpowers do not want and do not wish for Turks or Azeris get stronger as you all know what i mean the big brothers know it well and i dont see it happening, it is what it is

  8. ahmet said:

    Ron: “Armenia can and should find ways and do everything possible to blockade construction of any new pipelines near it’s territory ” – how do you think it’s possible? the pipelines go around Armenia, not through. in An any way, Azerbaijan can bypass Armenia to sell it’s oil and gas to Europe. or let me rephrase: Europe can bypass Armenia to buy Azeri oil and gas.

    Azerbaijan still keeps Nabucco project uncertain, because it’s waiting for Russia’s response. If Russia will prefer money and power over Armeni, which I believe they will, then Russia will withdraw its military support to Armenia, and in return Azerbaijan will sell large portion of its oil and gas to Russia, keeping Europe dependent on Russia. If somehow, Russia will not trade in Armenia for power, then Nabucco pipelines will be laid, no matter how frustated Armenia is about this issue.

    Harout: I’m sure according to you half of Georgia, Azerbaijan, Turkey, Iran, Irak and even Burkino-Faso is historically Armenian territoies.

    • Sety said:

      Ahmet
      like majority of the population within Turk/Azeri culture, you need education in geography your own SHORT HISTORY. Azerbaijan’s reactive foreign policy is fully dependent on Turkey’s which can only be classified as convoluted and tainted with religious extremist overtones.

  9. Pingback: Nabucco Gas Pipeline Has Investment Problems, Hurriyet Says – Bloomberg « Oil & Gas Investment « Oil Gas Investments

  10. John Markarian said:

    Many of Baku’s oil fields were owned and developed by Calouste Gulbenkian. The Azeri and Soviet governments illegally seized his property .His great grandson should file a lawsuit to against Azerbaijan and European companies such as British Petroleum, the Italian ENI and the French Total Oil companies that are co-developing the oil and gas fields in Azerbaijan. All Armenians should e-mail the Gulbenkian Foundation and pressure them to file this lawsuit

  11. John Minassian said:

    Armenia and the NKR republic need to explore for oil in the Mardakert area. That is why the Azeris have launched two assaults in the Martakert area in 2008 and 2009 because it has petroleum reserves that the Azeris want. Armenia needs to have the best defenses in Martakert. An Armenian parliamentarian even said that the Martakert massacre was due to the Azeri interest of ridding the regions Armenian inhabitants to get their hands on the oil.The Azeris are claiming that they are building a Martakert defense wall but this is only a bluff to make the Armenians think that the Azeris are not interested in attacking Martakert. Just some more azeri reverse psychology. Martakert can be key to Armenia’s energy security and can be a goldmine for Armenia’s economy.

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