Caspian Energy Journal Caspian European Club
Monday, 15 October 2018 10:08

“It might be advisable in future create Caspian oil-gas exchange” - General Director of Azpetrol Ltd LLC Jeyhun Mammadov Featured

“It might be advisable in future create Caspian oil-gas exchange” - General Director of Azpetrol Ltd LLC Jeyhun Mammadov

Caspian Energy (CE): Mr. Mammadov, Azpetrol is now controlling about 50% of the retail fuel market of Azerbaijan. Are you satisfied with this indicator and how do you manage to provide high quality petrol in the country? Which technologies do you use for this purpose?

 Jeyhun Mammadov, General Director of Azpetrol Ltd LLC: Even though the number of Azpetrol filling stations makes 10% of the total amount of filling stations operating in Azerbaijan, about 50% of sold fuel falls to the share of our Company. Given the fact that “Azpetrol- constantly aspiring to development” is a motto of our Company, we will always aspire to change the existing market sharing through further increase of our Company’s share. I stress that our Company is not engaged in fuel production. A-92 and diesel fuel, the retail sale of which is carried out by us, are being produced at SOCAR Heydar Aliyev Baku Oil Refinery. Our company provides these fuel products to consumers without any additional additive. 

A-95 fuel (premium) is being imported from abroad. Fuel we import is mainly produced at leading oil refineries of Europe such as ENI (Italy), Hellenic Petroleum S.A (Greece), Rompetrol (Romania), Mol (Hungary), and meets the standards of the European Union.

When supplying fuel to consumers, we pay special attention to the purity of petrol vehicles and tanks, installed at petrol filling stations, as well as to their compliance with technical indicators and state standards. Besides, permanent replacement of fueling units with modernized facilities, possessing technological advantages, has also been one of the factors contributing to the quality of fuel products.

It is also noteworthy that without a workforce capable of maintaining high discipline at work and performing high-quality work, it will be hard enough to control such a large share of market. Therefore, one of the major goals is to develop and maintain the workforce consisting of high-skilled human resources. It can be said that the Company is handling this task successfully. It became possible owing to a strict recruitment and conduct of periodical trainings in all necessary areas in order to raise the qualification of employees.  Before every working shift, all employees working at petrol filling stations of our Company get instructions from a local director. It is done to ensure adequate service. There are also inspectors of the Security and Control Service, working at filling stations of our Company and not taking a direct part in the fuel sale. In addition to security issues, these employees also control service delivery process and make sure that workers fulfill their obligations in accordance with certain instructions.

In case consumers complain about services provided at petrol filling stations of our Company, all complaints are immediately addressed by relevant officials and right decisions are taken. 

Newly recruited employees get training at the Training Center operating within our company. They gain theoretical knowledge about their functional responsibilities and at the same time, they take on-the-job-training. The relevant commission examines theoretical and practical knowledge of these candidates after completion of training courses. Those who successfully pass exams are being employed. It helps our employees to deal with tasks, assigned to them, successfully.


 CE:  In which foreign markets are you operating? Are there markets that you plan to enter in the long term?

  Jeyhun Mammadov:  Azpetrol is operating only in the market of Azerbaijan and increasing the number of stations within its network by 2-3 units every year.

As always, one of the priorities is to contribute to the successful implementation of the State Program for the socio-economic development of the Azerbaijan Republic regions for 2013-2018 approved by esteemed President Ilham Aliyev. Therefore, the Company has diverted its business toward the development of its divisions located in the regions. For this reason, our Company always gives special attention to commissioning of new petrol filling stations in different regions of the Republic. Creation of decent and sustainable working places, sustaining of confidence and trust of people are key elements of the Company’s concept.

This year, our Company jointly with “ASAN xidmət”, Azerbaijan’s world famous project, has started building all-encompassing complexes in Shamakhy and Kurdamir districts. “ASAN Xidmət” centers were created in accordance with the President of the Azerbaijan Republic Mr. Ilham Aliyev’s decree #685 dated 13 July 2012 under the authority of the State Agency for Citizen Service and Social Innovations under the President of the Republic of Azerbaijan. “ASAN Xidmət” centers serve to shape a new approach to satisfaction of citizens with respect to the relationships between citizens and public officials, and to bring their relationships to a new level in terms of quality.

Placement of our stations together with these centers as complexes in the mentioned regions is carried out for the convenience of the population.  The mentioned service centers shall provide service not only to residents of this region but also to those of neighbor and more remote regions.

Numerous clients of “ASAN Xidmət” centers can buy fuel at our filling stations in the most convenient way, as well as enjoy maintenance, car wash, café and motel services.

We hope that the location of our filling stations in one complex together with “ASAN Xidmət” centers operating in the regions will make much easier for the population to apply for the service of these centers.


CE:  What do you think of the domestic reforms in upstream and midstream sectors of the oil-gas industry?


Jeyhun Mammadov:  Firstly, let’s explain meaning of the terms “upstream” and midstream” to readers. The oil-gas industry usually consists of three major sectors: upstream, midstream and downstream.

Upstream implies exploration of subsoil and subwater fields of crude oil and natural gas, drilling of exploration wells, and production of crude oil and natural gas. Talking about midstream, we imply crude oil and natural gas transportation (by pipeline, railroad, oil tanker, etc), their storage and wholesale. Downstream means supply, purification, processing of crude oil and natural gas, as well as marketing and distribution of products made out of crude oil and natural gas.

As we know, economic advantage plays a key role in the development of the state. From this point of view, Azerbaijan has all opportunities for economic development. We all know that National Leader Heydar Aliyev made one of his major achievements in the oil industry. Delivery of Azerbaijani oil to the world market, restoration and consolidation of the budget through revenues gained from oil industry, were a major step towards improvement of the social well-being of the population. An agreement about joint development and production sharing for Azeri, Chirag and deepwater portion of Guneshli fields located in the Azeri sector of the Caspian Sea was signed at Gulustan palace on 20 September 1994. The agreement was named as the Contract of the Century for its historical, political and international significance. 11 international companies (Amoco, BP, McDermott, UNOCAL, SOCAR, Lukoil, Statoil, TPAO, Pennzoil, Ramco, Delta) representing 7 countries of the world (Azerbaijan, USA, Great Britain, Russia, Turkey, Norway and Saudi Arabia) were involved in the Contract of the Century worth $7.4 billion. The signing of the agreement boosted the flow of foreign investments into Azerbaijan.

An issue of diversification of routes of export of energy resources from Azerbaijan to the world market was one of the greatest achievements of National Leader Heydar Aliyev. Heydar Aliyev managed to ensure export of energy resources from Azerbaijan to the world market in the two directions. On 18 January 1996, an agreement on transportation of Azerbaijani oil via the territory of the Russian Federation to the Black Sea port of Novorossiysk was signed. After the north route of energy resources of Azerbaijan was determined, President of Azerbaijan G.Aliyev and President of Georgia E.Shevarnadze agreed to lay Baku-Supsa oil pipeline in Tbilisi on 8 March 1996.

At present, the national oil strategy is being implemented successfully owing to the activity of President Ilham Aliyev.  A new stage is accompanied by an increase of oil and gas reserves of the Republic owing to exploration and drilling operations, signing of additional international oil contracts, transformation of SOCAR into a vertically integrated international company, implementation of business projects in abroad, increase of investments, acceleration of modernization of the fuel-energy complex infrastructure, our country’s becoming gas exporter and broad social-economic effects raising its welfare.

It is also noteworthy that the national oil strategy of Azerbaijan is not focused only on a certain area. It is also a functional system of management combining the whole economy, financial system of the country and structural components of the national security in a single orbit. This reality shows that oil-gas related reforms are organically associated with the reforms in the field of economy and public administration.

Since the commencement of fuel supply, decisive measures taken by Azerbaijan giving preference to diversification policy, ensured energy security of the region and the world, created favorable conditions for multilateralism of the energy routes system. To date, our country has signed 31 oil-gas agreements with foreign companies. The work on 14 agreements is currently underway. These agreements involve 26 companies from 20 countries. According to forecasts, the volume of investments made, within the framework of agreements, into exploration, processing and transportation of hydrocarbon resources in Azerbaijan is estimated at $60 billion.


 CE:  Is it possible to create the first Caspian oil-gas exchange in the country, given the settlement of the Caspian status matter, as well as development of communications?

 Jeyhun Mammadov:  Settlement of the matter on the Caspian Sea status is of importance to Azerbaijan. First of all, our country is becoming a center of logistics. That is to say, the routes from the North to the South, from the West to the East cross through Azerbaijan. The role of the Caspian Sea is also important here. The settlement of the Caspian Sea status matter will also stimulate economic development of Azerbaijan. According to the most approximate calculations of the American Energy Information Administration (EIA), the Caspian shelf, which is rich in oil and gas, contains up to 30 bln tonnes of proven and probable oil and gas reserves in the oil equivalent. In current prices, these reserves cost $8 trillion. Projected reserves are much higher. Considering the presence of huge oil-gas reserves in the Caspian Sea, I think it would be advisable in future to create a Caspian oil-gas exchange in the country.

CE:  Can compressed natural gas compete with refined petroleum products at the domestic market?

 Jeyhun Mammadov:  Yes, compressed natural gas can compete with other types of fuel. It is noteworthy that compressed natural gas is twice as beneficial as A-92 and thrice as beneficial as A-95 petrol. The cost of replacement of the fuel system required for use of CNG will be efficient during 8-12 months, depending on the daily run of the vehicle. And in the coming years CNG user can save twice as high compared to A-92 fuel consumer, and thrice as high compared to A-95 fuel user. Besides, CNG is much cleaner from the ecological standpoint. Thus, CNG filters are a type of fuel meeting the Euro-6 standard.

CE:  Could you please tell about your experience at using compressed natural gas?

 Jeyhun Mammadov: At present, the Company is getting official permissions from the relevant agencies for supply of compressed natural gas to consumers at filling stations, as well as delivering and installing new types of equipment.  Initially, new equipment will be installed at our petrol filling stations in Masazir, Babek, Mardakan and Mayak. The second stage of the project envisages installation of these facilities at all possible stations.

 CE:  Last year you spoke about the plant to install charging stations for electric vehicles. Is there demand for those in Azerbaijan now?

 Jeyhun Mammadov: Compared to the last year, the demand for these stations did not increase among the population. Nevertheless, it is planned to install charging plants at recently built petrol filling stations “Asan Kurdamir” and “Asan Shamakhy”. These services will be provided to the population for free due to the lack of the relevant legislation regulating a mechanism of electricity sale to population at filling stations.


Thank you for the interview.

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