Caspian Energy (CE):  Presidents of the two countries, Azerbaijan and Turkey, launched the strategic TANAP gas pipeline on November 30.  What is its maximal carrying capacity and which new sources will join the gas pipeline in future?

Parviz Shahbazov, Minister of Energy of Azerbaijan: The key role in implementing the idea of exporting natural gas to Europe from a new source belongs to the Trans-Anatolian Natural Gas Pipeline (TANAP). As the result of the Azerbaijan-Turkey brotherhood and friendship, the TANAP has led to the emergence of a grandiose infrastructure project such as the Southern Gas Corridor. In this sense, completion of the TANAP pipeline section linking with the EU is a landmark event. This project is an achievement of President Ilham Aliyev’s policy aimed at strengthening our country’s position on global issues such as energy security.

One of the advantages of the TANAP is that its transmission capacity and a number of project participants can be increased in future at the request of countries which wish to join the pipeline. The initial annual pipeline transmission capacity makes 16 bcm. About 4 billion cubic meters of gas has been transported via the TANAP to Turkey since July 2018 until the present day. 6 billion cubic meters of gas per year is planned to be delivered to the Turkish market via the TANAP from June 2020. The annual carrying capacity of the pipeline will reach 16 bcm starting from the end of 2021. If required, the carrying capacity of the pipeline can be increased up to 31 bcm in the next stage. There is a big potential for the expansion of TANAP. Which countries shall be sources of gas is to be decided by gas producing countries.

CE: How does the delay in TAP’s construction impact the export policy? What is the size of expenses facing producers? Are you satisfied with the present work speed?

Parviz Shahbazov: At present, the Trans Adriatic Pipeline (TAP) is 91% complete. The project is planned to be delivered on time. The obstacles which may cause the delay have been handled. It is planned to get the pipeline construction completed and transport Shah Deniz-Phase 2 gas to the European markets in the second half of 2020. TAP is a project meeting EU’s goals such as energy security, diversification of sources and environmental protection. This provides a strong political support for the project at the international level. 

CE: How big is the demand for natural gas on the global market  today and how do you assess the competitiveness of the Caspian gas compared to Russian, Norwegian, Algerian gas and other sources, as well as to LNG supplies from Qatar, the USA and Australia? 

Parviz Shahbazov: The global demand for natural gas, as for a low-carbon energy source, has been increasing in recent decades. The share of natural gas in the global energy balance now makes 23%. As the figures of 2019 are not ready yet, I will refer to the development indicators seen in 2018. When it comes to natural gas, 2018 stood out as one of the golden years. Global gas production and consumption totaled around 3.87 trillion cubic meters and 3.85 trillion cubic meters in 2018 respectively. The global demand for gas rose by 5.3%. According to the forecasts, the share of natural gas in the global energy balance will make around 26-27% in 2040.

The process of diversification of supply sources is now running on the European market. Diversification of sources and routes is the main goal of the European energy security policy. For Europe, Caspian gas is a new source, while the TAP is a new route.

Complying fully with energy diversification, Azerbaijani gas is delivered to Europe via the corridor consisting of gas pipelines, which means a stable and long-term supply. On the other hand, 25-year contracts signed with 9 companies from 8 countries guarantee the sale of 10 bcm of Shah Deniz-Phase 2 gas.

It also bears reminding that the Southern Gas Corridor is the first project providing new gas supplies to the South-East Europe. Azerbaijani gas will not only sufficiently meet demand of these countries but also contribute into creation of the supply chain for countries possessing no gas infrastructure.

CE: How does uneasy relationship of Turkey and Greece impact the project?

Parviz Shahbazov: Regional and global significance of the Southern Gas Corridor is capable of neutralizing external impact on the project. Both the Turkish and Greek sides are interested in successful implementation of this project. Agreements on sale of certain volumes of gas have been signed with each of these countries: 6 bcm – with Turkey, about 1 bcm – with Greece. 

Along with gas supply to Turkey and Greece, the Southern Gas Corridor provides conditions for turning these countries into hubs. At present, the operations over the Southern Gas Corridor sections, crossing the territories of both countries, are successfully completed.

CE: There are about 20 gas hubs in Europe and only three of them are of international importance: in Great Britain, the Netherlands and Austria. To what degree is the south gas hub  important, given the new supplies? 

Parviz Shahbazov: It will depend on the number of pipelines to be linked to the Southern Gas Corridor in future, and also on the volumes of transported gas. Construction of the Greek-Bulgarian interconnector (IGB) is currently ongoing in order to have it linked to this corridor. Besides, operations on implementation of the Ionian-Adriatic pipeline (IAP) project are ongoing as well.  Romania is interested in using the Romanian-Bulgarian gas interconnector and the transmission infrastructure of the Bulgaria-Romania-Hungary-Austria (BRUA) pipeline during the expansion phase of the Southern Gas Corridor in the direction of the Balkans and Central Europe.

Hungary is also taking interest in acquiring natural gas via the Southern Gas Corridor. The Southern Gas Corridor has been designed in a way to permanently expand and develop. At the next stage of development the Southern Gas Corridor can extend towards the Central and Western Europe, and turn into a hub.                                      

CE: What stage has the development of the Trans Caspian gas pipeline reached? To what extent is this project urgent for Azerbaijan today?

Parviz Shahbazov: According to the data of BP, Turkmenistan’s gas reserves make 19.5 trillion cubic meters. A total of 61.5 billion cubic meters of gas was produced in 2018. Gas consumption totaled 28.4 bcm.

Diversification of export routes and gaining revenues from natural gas are also important for Turkmenistan. The Trans-Caspian gas pipeline project provides an access for Turkmenistan’s gas into the European market. Turkmenistan and the European Union have the final say in this process. Turkmenistan is interested in considering export routes in the direction of Europe and in delivering energy resources to foreign markets. Discussions with the European Union and Turkey are held on different levels. Turkmenistan has been represented at the meetings of the Southern Gas Corridor Advisory Council for two years in a row. All of it is a positive aspect in development of energy cooperation with the participation of Turkmenistan.

Azerbaijan is holding energy cooperation with Turkmenistan in bilateral and trilateral formats. An example of this is the April meeting held in Ankara last year with the participation of Energy Ministers of Azerbaijan, Turkey and Turkmenistan.

Azerbaijan has an experience bringing benefits to all parties in transportation of Central Asian energy resources, including delivery of Turkmen oil to the world markets. Azerbaijan provides transit opportunities for energy resources of Turkmenistan. Central Asian countries can enjoy all logistics services in future as well.

CE:  What stage has been reached in developing a long-term state strategy on renewable sources of energy? What will be a percentage ratio in the energy balance in coming 10 years?

Parviz Shahbazov: Mapping out of the “Long-term strategy on development of the energy sector of the Azerbaijan Republic” is envisaged in accordance with the Azerbaijan Republic President’s order #1209 “On acceleration of energy sector reforms” dated 29 May, 2019.  The strategy will reflect strategic measures associated with the development of renewable sources of energy. International consulting companies are now attracted, and a relevant work is underway due to this measure.

The goal in the next 10 years is to increase the share of using renewables up to 30% in the total installed capacity. The work on development of the renewable energy sector is currently underway in compliance with the order of the head of the state. Operations on implementation of pilot projects concerning wind and solar sources of energy with the capacity of 440 MW are currently carried out with the assistance of foreign energy companies. After the Law “On use of renewable sources of energy in electricity production” has been passed, it is planned to create additional generation capacities at the expense of private investments attracted via auctions. For this purpose, the project on preparation of auctions is being implemented with the support of the European Bank for Reconstruction and Development, including the work on development of the legal framework regulating tendering processes.

CE: Which types of energy resources are the most competitive in the climate conditions of Azerbaijan?

Parviz Shahbazov: High level use of hydropower resources is practiced in Azerbaijan. Thus, 1,782.2 million kWh was produced out of a 1,134MW capacity in 2018. Nowadays, using of wind and solar energy is of particular significance in the general energy strategy of the Republic. Azerbaijan is attaching big priority to increase of using solar and wind energy. Competitiveness of renewable energy sources in relation to the conventional energy resources comes mainly out of development of renewable energy potential and is directly associated with the technology development in the country. Our observations show that the attention given by the head of the state to the renewables sector, ongoing reforms in the country and development of technologies in the energy sector along with existing electricity wholesale tariffs make it possible to invest. The potential of the renewables sector in our country has reached a sufficiently good level.

Thank you for the interview

Caspian Energy (CE): Madame Minister, the parliament approved the new staff of the European Commission.  Which differences between the former and the new staff have you seen and what hopes do you place on the work of the new staff of the Commission in coming 5 years?

Marie Christine Marghem, Minister of Energy, Environment and Sustainable Development of Belgium: The biggest difference we’re seeing in comparison with the former European staff is the will to implement the Green Deal and to achieve the Paris agreement. Therefore the new commissioner Kadri Simson has a very important role to play and fortunately, she’s highly aware of the matter. Minister Marghem has a very good relationship with her. We also consider that the new staff wants to go further in the way of EU energy independence. We are also pride as the Belgians for the nomination of commissioner Didier Reynders who has a very long experience too.

CE: Which economic sectors of the EU and Belgium are in need of investments and subsidies today?

Marie Christine Marghem: The two topics essentials on the European scale are digitalization and innovation. First of all, innovation remains a key factor for the future. It is the same in Belgium, so we have to improve some infrastructure: gas or electricity network for example. It’s the reason why I approved Elia’s (electricity network administrator) development plan until 2030. We will reinforce some electric lines to support the renewable energy flow.

CE: How do you assess the energy security situation? Don’t you think it is in danger due to lower gas prices, which does not stimulate gas supply from new sources, while the European sources are getting exhausted?

Marie Christine Marghem:  The most important is to diversify our sources of supply to avoid an excessive dependence on only one type of energy. We consider gas as a transitional energy source. To succeed the nuclear phase out the Parliament approved in April of 2019 the “CRM (capacity remuneration mechanism) law” which will allow the construction of new gas production units in Belgium. On this matter we can see how much innovation is important to reduce the carbon emissions of gas units.

CE: Do you consider it possible to stop an operation of two nuclear reactors in Belgium after 2025? 

Marie Christine Marghem:  The 2003’s law provides the nuclear phase out in 2025. This nuclear phase out was one of the main concerns of the minister’s cabinet: we developed an Energy Pact with the Regional Ministers until 2030-2050. Furthermore, we will notify the Belgian National Energy and Climate Plan to the European Commission before the end of this year. If the next government wants to change this law it will have to find a new majority.

CE: Does Belgium plan to fully abandon internal combustion engines in favor of electric motors?

Marie Christine Marghem:  Belgian long term strategy for 2050 is not achieved yet. We are completing its development. We are working on the Belgian electricity network to enable and increase more electric vehicles. We also have other possibilities such as liquid gas, hydrogen and more.

CE: Isn’t the production of lithium-ion batteries more harmful than petrol production? What solution would you suggest?

Marie Christine Marghem:  The two aspects are completely different. You have to consider the whole production process of lithium-ion batteries and evaluate the impact on the environment. We are working on sustainable solutions, recycling included. For instance we have a “Transition Funds”. These Funds are aimed to promote new ways of energy production. It also financially counterbalances the prolongation of two nuclear power stations (Doel 1 and 2) that is 200 million Euros for 10 years.

Petrol sources are limited and we have to find new sources of energy to succeed energy transition.

CE: Which sources of energy are the most efficient in the EU and Belgium?

Marie Christine Marghem: Offshore energy is a real success for Belgium. Offshore wind turbines are more efficient than onshore wind turbines because of the wind’s strength at sea. We have now an installed capacity of 1.5 GW and we will reach the 4 GW in 2030. We have developed an expertise on this field and we now export our technology abroad. On the European ranking, we are on the third place and on the fifth place in the world.

Thank you for the interview

Не секрет, что коронавирусная инфекция COVID19, получившая довольно широкое освещение в мировых СМИ, кроме рекордного падения цен на энергоносители, также послужила своеобразным катализатором осознания «энергетической системы координат», в которой мы все находимся и которой так не хватало для понимания необходимости реформирования того, что мы привыкли называть энергетической безопасностью.

Нефть из самого ликвидного в XX веке товара все более усиленными темпами превращается в товар – изгой,  экологически чистые энергоресурсы все более наступают ей на пятки. При этом не важно, что ветровая энергетика не стабильна и не менее убийственна для флоры и фауны, чем нефть, а солнечная энергетика помимо капризов погоды также занимает огромные территории и не имеет технологий хранения и транспортировки на дальние дистанции. Кроме того, на производство литиевых батарей для электромобилей требуется энергоемкость на 30% превышающая производство традиционного топлива, при этом его «углеродный след» оказался на 20-60% выше, чем при производстве двигателей внутреннего сгорания.

В погоне за сохранением «привычного распорядка вещей», мы продолжаем терять 65% популяции пчел, которые ответственны за жизнь 80% растительности на Земле, никто больше не хочет дышать продуктами жизнедеятельности организмов, почивших в мир иной 5 миллионов лет назад, наши океаны задыхаются от мусора и через каких то 30 лет на планете просто не останется чистой питьевой воды, а также ее флоры и фауны.  Что мы имеем, это локальные рынки возобновляемых энергоресурсов, которые при всей своей эффективности все же  носят сезонный характер.  Это одна из причин, почему нефть держится за счет искусственного регулирования, хотя в последнее время все больше уступает эту ведущую роль природному газу и его жидким фракциям. Газ сегодня воспринимается инвесторами, аналитиками и маркетологами как естественный переходный энергоноситель, призванный ликвидировать зависимость от угля и нефти.

Роль природного газа в Евросоюзе должна серьезно сократиться к середине века, сказала глава генерального директората Еврокомиссии (ЕК) по энергетике Дитте Юуул Йоргенсен в ходе онлайн-конференции Атлантического совета. Однако в наборе используемых Евросоюзом энергоресурсов (так называемом энергомиксе),  природный газ играет «очень-очень большую роль», на него приходится более трети энергопотребления, и в обозримом будущем газ останется важным источником энергии для Евросоюза.

«Я думаю, важно посмотреть на роль газа в нашем энергомиксе в долгосрочной перспективе. Ясно, что при приближении к 2050 году, к климатической нейтральности нашей экономики роль газа будет намного меньше, чем сейчас. Но это - через 30 лет», - сказала она.

Еврокомиссия хотела бы, чтобы использование природного газа в Евросоюзе было заменено более «чистыми» источниками энергии, отметил замглавы этого директората Клаус-Дитер Борхардт ранее на той же конференции. Однако сделать это можно, когда и если у ЕС будут альтернативные виды энергии в объёмах, в которых нуждается его энергосистема, подчеркнул он.

Саммит глав государств Евросоюза в декабре договорился о переходе к так называемой климатической нейтральности к 2050 году. В начале марта Еврокомиссия предложила документ, который должен обязать ЕС стать климатически нейтральным к середине века. Речь идет о законопроекте, который устанавливает обязательную для исполнения цель – итоговый объем выбросов парниковых газов в атмосферу в союзе должен стать нулевым к 2050 году.

Между тем европейский рынок становится все более глобальным, в марте этого года украинская Нафтогаз подписала с американской  Louisiana Natural Gas Exports договор  о закупках около 5,5 миллиарда кубометров американского сырья в течение двадцати лет. В пакете идут еще два контракта: на хранение заокеанского топлива в газовых хранилищах Украины и на строительство и эксплуатацию газотранспортной инфраструктуры между Польшей и Украиной.

LNG стирает границы, снижая зависимость газа от нефтяных котировок, чем больше объемы торговли спотовым газом,  тем больше вероятность что в ближайшее время газ вырвется в свободное ценообразование, тогда партии LNG как на европейских, так и азиатских биржах, столкнутся в конкурентной борьбе с трубопроводным газом, стимулируя инвестиции в газовый upstream и стабильный рост газового баланса, что и требуется стратегическому инвестору.

У газа есть свой плюс – у него  нет регулятора наподобие ОПЕК, что не помешало ему естественным путем контролировать поставки соответственно спросу во время кризиса.

ОАПЕК

Вся история нефти XX века это фактически ее использование в качестве экономического «оружия», что напоминает о  нефтяных эмбарго, например,  введенное в октябре 1973 года. США за всю свою историю установила количество эмбарго на нефть, больше чем любое другое государство, включая введение нефтяного эмбарго в течение двух десятилетий на Японию до начала II Мировой Войны, на Советский Союз в 1960 году, на Северную Африку, Бирму, Сербию, Гаити, Ливию, Ирак, Иран и Судан.

Некоторые Арабские государства производители нефти вводили эмбарго в 1956, 1967 и 1973 годы  на государства, являющимися сторонниками США и западных стран.  Они тем самым, в  1967 и 1973 гг. хотели заставить страны, поддерживающие Израиль поменять свою политику, оказать на него давление во время войны  1967 года.

Самым важным итогом эмбарго, введенного в 1967 году, стало возникновение Организации Арабских стран-экспортеров нефти (ОАПЕК) впоследствии  соответственно - Организацией стран-экспортеров нефти (ОПЕК).

Когда в 1974 году цены на сырую нефть резко поднялись, некоторые члены ОАПЕК,  посчитали их слишком высокими. Саудовская Аравия начала беспокоиться, что высокие цены на нефть могут разрушить экономику западной Европы, тем самым усилиться коммунистический блок, альтернативные технологии, что может в будущем привести к отсутствию необходимости в потребности нефти и тем самым ОАПЕК как организация может прекратить свое существование.

В январе 1974 года министры нефти дали добро на увеличение добычи на 10% вместо запланированного увеличения на 5%. Введенное эмбарго по мнению официальных лиц США закончилось 18 марта 1974, а в отношении Нидерландов - 11 июля 1974 года.

ОПЕК +++..

Сегодня ОПЕК потеряла прежнюю политическую роль, количество ее участников расширилось  и ее основная функция – поддержание значимости роли нефти как основного мирового энергоресурса во время последнего кризиса, оказалась провальной. ОПЕК   влияет на рынки все меньше. Поэтому природный газ, который является наиболее экологически чистым энергоносителем, все больше нуждается в отвязке от нефтяных котировок, а ОПЕК в возможном прекращении деятельности. 

ОПЕК ухудшило прогноз снижения мирового спроса на нефть из-за пандемии коронавируса: во втором квартале 2020 года ожидается падение спроса до уровня 81,3 млн баррелей в сутки. А 12 апреля 2020 года Саудовская Аравия, Россия и другие нефтедобывающие страны, входящие в ОПЕК+ договорились сократить добычу нефти на 9,7 млн баррелей в сутки в мае и июне или на 23% относительно исходного уровня, затем в июле - декабре 2020 года это ограничение будет смягчено до 7,7 млн баррелей в сутки, или 18%, а в период с января 2021 до апреля 2022 года уровень ограничений составит 5,8 млн баррелей в сутки, или 14% от базового уровня.

Предыдущая сделка действовала три года — с начала 2017-го до 31 марта 2020 года. В 2009 году ОПЕК сокращал добычу нефти для целей восстановления роста цен только на 3 млн б/с, а в 1999 году — на 4 млн б/с.

Современный ОПЕК это громоздкий формат, состоящий из 23 стран, получил новое название «ОПЕК+++». И это беспрецедентное сокращение в истории ОПЕК и всего нефтяного рынка не помогло, цены продолжили падение. На настроение трейдеров больше влияли данные о хранилищах нефти в США или ситуация с очередным коронавирусным локдауном, чем сокращения в рамках ОПЕК+++. На фоне данных о нарушениях договоренностей со стороны некоторых членов организации, а также огромных убытков нефтегазовых majors, актуальность ОПЕК c точки зрения свободного рынка и дальнейшей инвестиционной привлекательности нефтегазовой отрасли, требующей стабильности, а не искусственного регулирования, все больше ставится под большой вопрос.

Как известно, уже 22 апреля стоимость эталонной марки в моменте опускалась ниже 16-ти долларовой отметки. В оставшиеся дни апреля европейская нефть торговалась в коридоре 20-24 доллара за баррель. А в последний день месяца котировки повысились до 26 долларов и выше, что стало реакцией на данные Минэнерго США по запасам нефти и нефтепродуктов, а также, возможно, ожиданий участников рынка стимулирующих мер от ФРС США.

Еще более драматично развивались события на американском рынке, 20 апреля на торгах Нью-Йоркской товарной биржи цена майских фьючерсов на североамериканскую нефть WTI сначала упала до нуля за баррель, а затем ее котировки ушли в минус – впервые в истории! Цена нефти в моменте обваливалась до минус 40 долларов за баррель, продавцы контрактов доплачивали покупателям. Главной причиной, как отмечалось в СМИ, стало падение спроса на нефть из-за антикоронавирусного простоя мировой экономики и существенного сокращения резервных мощностей для хранения нефти.

Нуждается ли сегодня мировая экономика в искусственном поддержании жизнеобеспечения нефтяных котировок, развивая «голландский синдром» мировой экономики, что может привести к очередным кризисам,  или ОПЕК как  «лошадь сдохла и с нее пора слезать», как метко выразился один из российских олигархов.

It is no secret that so widely covered in world media the COVID19 coronavirus infection has not only triggered a record fall of prices for energy carriers but also served as somewhat a catalyst to realizing the «energy coordinate system» in which we all exist and which we lacked so much to understand the necessity to reform what we used to call energy security.

The XX century’s  most liquid commodity, oil is rapidly transforming into an outcast commodity, and environmentally friendly energy resources are increasingly coming on its heels.  In the meantime, it does not matter that wind energy is unstable and is no less disastrous for flora and fauna than oil, and solar energy, in addition to weather whims, also occupies huge territories and does not have storage and long-distance transportation technologies. Moreover, production of lithium batteries for electric vehicles requires energy consumption exceeding that of conventional fuel production by 30%. Besides, its «carbon footprint» turned out to be 20-60% higher than the ratio required for production of internal combustion engines. Seeking to preserve the «usual routine of things», we continue to lose 65% of the population of bees which are responsible for the life of 80% of vegetation on Earth, no one wants to breathe the products of life of organisms that died 5 million years ago, our oceans are suffocating from garbage and in some 30 years there will simply be no clean drinking water left on the planet, as well as its flora and fauna. What we have is local renewable energy markets, which, for all their efficiency, are still seasonal. This is one of the reasons why oil is held up through artificial regulation, although recently it has been increasingly yielding this leading role to natural gas and its liquid fractions. Today investors, analysts and marketing specialists find gas to be a natural transition energy carrier meant to eliminate dependence on coal and oil.

The role of natural gas in the European Union should seriously shrink by the middle of the century, Director General for Energy of the European Commission Ditte Juul Jorgensen said during an online conference of the Atlantic Council. However, natural gas plays a «very, very large role» in the set of energy resources used by the EU (the so-called energy mix), it accounts for more than a third of energy consumption, and in the foreseeable future gas will remain an important source of energy for the EU.

«I think it is important to look at the role of gas in our energy mix in the long term. It is clear that as we approach 2050, the role of gas in our economy’s climate neutrality will be much less than it is now. But it is going to happen in 30 years,» she said.

The European Commission would like to see the natural gas use in the European Union replaced by much «cleaner» energy sources, Deputy Director General for Energy Klaus-Dieter Borchardt noted earlier at the same conference. However, it can be done when and if the EU has alternative types of energy in the volumes that its energy system needs, he stressed.

In December the EU leaders summit agreed to shift to the so-called climate neutrality by 2050. In early March, the European Commission proposed a document that should oblige the EU to become climate neutral by the middle of the century. It involves a draft law that sets a mandatory goal – the total amount of greenhouse gas emissions into the atmosphere within the Union should become zero by 2050.

Meanwhile, the European market is becoming more and more global. In March this year, Ukrainian Naftogaz signed a contract with the American Louisiana Natural Gas Exports to purchase about 5.5 billion cubic meters of American LNG during a period of twenty years. The package includes two more contracts: for the storage of transoceanic fuel in gas storage facilities in Ukraine and for the construction and operation of gas transport infrastructure between Poland and Ukraine.

LNG blurs the boundaries, reducing the dependence of gas on oil quotes, the larger is the volume of spot gas trading, the more likely it is that in the near future gas will break out into free pricing. Then LNG consignments will face competition with pipeline gas on both European and Asian exchanges, stimulating investment in the gas upstream and stable growth of the gas balance, just what a strategic investor needs.

Gas has its own advantage – it does not have a regulator like OPEC, which made it possible to naturally control supplies according to demand during the crisis.

OAPEC

The entire history of oil in the twentieth century is actually its use as an economic «weapon», which reminds of the oil embargoes, for example, set in October 1973. The United States has imposed more oil embargoes than any other country in its history, including two decades of oil embargoes on Japan before the World War II, the Soviet Union in 1960, North Africa, Burma, Serbia, Haiti, Libya, Iraq, Iran, and Sudan.

Some Arab oil-producing states imposed embargoes in 1956, 1967, and 1973 on the states that were allies of the USA and western countries. In this way, in 1967 and 1973 they wanted to force countries, supporting Israel, to change their policies and put pressure on it during the 1967 war.

The most important outcome of the embargo imposed in 1967 was the emergence of the Organization of the Arab petroleum exporting countries (OAPEC) which later became the Organization of the Petroleum Exporting Countries (OPEC).

When crude oil prices rose sharply in 1974, some OPEC members considered them too high. Saudi Arabia began to worry that high oil prices could destroy the economy of West Europe, thereby strengthening the Communist bloc, alternative technologies, which may in the future lead to a lack of need for oil and thus OAPEC may cease to exist as an organization.

In January 1974, the Oil Ministers gave permission to increase production by 10% instead of the planned increase of 5%. According to US officials, the imposed embargo ended on March 18, 1974, and in respect of the Netherlands - on July 11, 1974.

OPEC +++..

Today, OPEC has lost its former political role, the number of its participants has increased and its main function - maintaining the significance of the role of oil as the world’s main energy resource during the last crisis - has proved to be failing. The OPEC’s influence over markets is getting less and less. Therefore, natural gas, which is the most environmentally friendly energy carrier, increasingly needs to be untied from oil quotes, likewise OPEC may cease to exist.

OPEC has damped its outlook for a decline in global oil demand due to the coronavirus pandemic: demand is expected to fall to 81.3 million barrels per day in the second quarter of 2020. On 12 April 2020, Saudi Arabia, Russia and other OPEC+ producing countries agreed to cut oil production by 9.7 million barrels per day in May and June, or by 23% relative to the baseline level, then in July-December 2020, this limit will be eased to 7.7 million barrels per day, or 18%, and in the period from January 2021 to April 2022, the level of limit will make 5.8 million barrels per day, or 14% of the baseline level.

The previous deal was valid for three years - from the beginning of 2017 till March 31, 2020. In 2009, OPEC cut oil production by only 3 million b/d in order to restore price growth, and by 4 million b/d in 1999.

The modern OPEC is a cumbersome format consisting of 23 countries and now has got a new name  “OPEC+++”. And this unprecedented reduction in the history of OPEC and the entire oil market did not help, prices continued to fall. The data on oil storage facilities in the United States or the situation with another coronavirus lockdown had a bigger influence on the mood of traders than cuts within OPEC+++. Amid the data on violation of agreements by some members of the organization, as well as huge losses of oil and gas majors, the relevance of OPEC is broadly challenged from the point of view of the free market and the further investment attractiveness of the oil and gas industry, which requires stability rather than artificial regulation.

As is known, the price of the benchmark crude saw the drop below $16 on April 22. In the rest of the April days the European oil was traded in the range of $20-24 per barrel. Quotes rose to $26 and above on the last day of the month that was a response to the U.S. Department of Energy data on oil reserves and petroleum products, as well as perhaps the expectations of the market players for stimulus measures from the U.S FRS.

Things in the American market were even more dramatic. The price of May futures for the North American crude WTI first saw a drop down to zero per barrel on April 20 and then its quotes went negative – for the first time in history! The oil price was falling down to -$40 per barrel at a point, so the contract sellers paid the rest to customers. As Media noted, it was caused by the falling demand for oil due to anti-coronavirus downtime of the global economy and a significant reduction in reserve capacity for oil storage.

Does today’s world economy need artificial survival of oil prices prone to the «Dutch syndrome» of the world economy, which can entail another crises, or is OPEC “ a horse with cracked hooves and is it time to dismount it?», one of the Russian oligarchs aptly questions.

Caspian Energy (CE): Your Excellency, which implications for the EU’s economy do you expect after Great Britain leaves the EU? How will it affect the investment climate of the economic space of the EU and Balkan states in particular?

Boyko Borissov, Prime Minister of the Republic of Bulgaria: The United Kingdom will remain an important trading partner for us after Brexit. According to the official data by the European Commission, the UK accounts for 15.5% of the exports and 10.3% of the imports of the EU-27[1]. On the other hand the EU will be by far the most important trading partner of the UK with 47.1% of the exports and 52.8% of the imports.

For this reason we are interested in concluding a Free Trade Agreement, which would not introduce trade tariffs or quotas between the EU and the UK. We should bear in mind, however, that no matter how ambitious the future economic partnership between the EU and the UK is, it cannot mirror the benefits of the Single Market.

Bulgaria is and will continue to be actively engaged in the Western Balkans and Brexit will not change that. The Sofia Declaration and Sofia Priority Agenda adopted during our Presidency of the Council of the EU in the first half of 2018 set forth the framework for continuous economic and investment cooperation with the six countries in the region. We remain committed to their implementation.

We hope to continue our cooperation with the UK in the region, including in the framework of the Berlin Process which Bulgaria co-chairs this year together with the Republic of North Macedonia.

CE: During your visit to Azerbaijan in 2018 you said that provision of gas supply in Bulgaria makes only 3%. Has the situation changed since then? Which companies are attracted for this purpose and what role can SOCAR play in energy security of the EU and the Balkan economic space?  How is the economic relationship with neighbor countries progressing?

Boyko Borissov: Household gas supply to the country continues by far to fall short of the potential. Promotion of natural gas supply by the extension of the gas transmission infrastructure and by the negotiation of competitive prices is a top priority set in Bulgaria’s Energy Strategy. “Desiree” is a program with the Ministry of Energy for the gasification of households and is funded under the Kozloduy International Fund (KIF). Changes were introduced into the program in 2018 to increase the 20% grant to households to 30% of the eligible costs and the price of connection is covered 100% within the eligible costs. In mid-December, an additional sum of EUR 1.5 million was allocated to the program at the Assembly of Donors of the KIF. This increased interest in the program – as of 30 November 11,374 households applied for as against 3,636 households a year earlier. Projects were completed at 6,410 sites and households switched to natural gas.

To make natural gas an attractive alternative to other energy sources and to increase the gas “coverage” nationally it is crucial to achieve diversification of the sources and routes of gas supply. The Bulgarian Government works to complete Bulgaria’s interconnection with neighbor countries by building the needed infrastructure which will promote economic cooperation in the region. Undoubtedly, Azerbaijan is a key partner of Bulgaria for the achievement of this goal. Energy cooperation between our countries has reached a strategic level in recent years. I am confident that we will continue to build on our joint work to ensure Europe’s energy security.

The European Union’s objectives for carbon-free economy, reduction of hazardous emissions and boost of energy efficiency are an additional spur to substantial and sustainable growth of gas consumption across Bulgaria.

During my meeting with President Aliyev in March 2019 we discussed the possibility for the State Oil Company of the Azerbaijan Republic SOCAR to start investing in Bulgaria’s gas distribution system in the populated areas for two purposes: zero air pollution and competitiveness.  I may say that this is an important joint project that we are currently implementing: the SOCAR investment in gas distribution in Bulgaria, i.e. in a predictable and rule-governed competitive market of an EU member state. SOCAR has hired an experienced international consulting company to conduct a feasibility study on the gas distribution market in Bulgaria. We expect that very soon our Azerbaijani partners will inform us about the official findings of the study and of their follow-up steps and actions. It is our expectation that the conclusions of the study will be positive and, accordingly, it is our hope that SOCAR will start investing in gas distribution in Bulgaria as soon as possible.

Moreover, the Interconnector Greece-Bulgaria (IGB) is expected to be completed by the end of this year to become an integral part of the Southern Gas Corridor (SGS). The  IGB will supply our country with the negotiated 1 billion cubic meters/year of Azerbaijani natural gas from Stage 2 of the Shah Deniz Gas Field. We believe that the supply of natural gas from different sources and via different routes will guarantee competitive prices which will be a factor to promote household consumption.

CE: At the World Energy Congress hosted in Istanbul in 2017, you said that Bulgaria possesses the biggest transit capacities and gas compressor stations in the Balkans. Which advantages does Bulgaria get from it? Do you plan to build new Balkan gas storages or hubs for spot gas trade in the Balkans and Bulgaria in particular?

Boyko Borissov: Bulgaria’s strategic geographic location, well developed existing gas transmission and gas storage infrastructure, interconnection projects under construction with Turkey, Greece and Serbia and the completed interconnector with Romania are some of the factors that enable our country to keep its major role on the gas map of Europe. Further, it is a fact that 80% of the compressor stations in the region are located in Bulgaria and that the operation of the gas exchange starts. We work consistently to ensure that Bulgaria continues to be the natural route of the gas streams from North to South and from South to North alike.

When we talk about the Bulgarian Government’s concept of the Balkan gas hub on Bulgarian soil, we should also mention the role of the Underground Gas Storage (UGS) in Chiren. Currently it is seen mainly as a gas storage facility of local importance and a major tool to cover the seasonal fluctuation in natural gas consumption and supply to the country and to guarantee security of supply. The current storage capacity is 550 million cubic meters of natural gas. The withdrawal capacity, depending on various factors, ranges from 0.5 million cubic meters per day to 3.82 million cubic meters per day. There is future to expand and transform it into a commercial undertaking with an essential role in the development of competition and in the enhancement of the benefits for natural gas consumers in a single integrated and interconnected regional gas market.

To that effect Bulgartansgaz EAD is developing a project to increase the storage, withdrawal and injection capacity of UGS Chiren. The project plans for an increase of the working gas volume up to 1 billion cubic meters and of the output of the withdrawal and injection up to 8–10 million cubic meters per day. The project is rated as a project of “common interest” for the European Union. The project is expected to go into operation in 2025.

Early this year, following a Council of Ministers decision Bulgartransgaz EAD will acquire 20% of the share capital of Gaztrade S.A. – a special purpose vehicle (SPV) for the LNG terminal near Alexandroupolis, in the north of Greece. Our contribution to the project of a new  LNG terminal in Greece is incorporated into the update Energy of Bulgaria until 2020.  This is yet another significant step in the implementation of the overall concept of the Balkan hub. The concept envisages to install and develop the required gas transmission infrastructure to connect the natural gas markets of the member countries in Central and Eastern Europe. The materialization of the concept is needed for the promotion of a transparent, liquid and reliable natural gas market in Bulgaria and in the region.

CE: Do you find a pre-emerging of the free gas market and gradual untying of prices from oil quotations advantageous for Bulgaria and the EU in general?

Boyko Borissov: Our concept of a gas hub to operate in Bulgaria essentially comprises two components. First, it is the infrastructure under construction and second, the operation of the gas exchange. The start of the natural gas market liberalization is a major phase in the development of the energy sector in Bulgaria.

The operation of the gas exchange will guarantee that the national gas market will open which will be of benefit to all market actors. For this to materialize, liquidity and natural gas market liberalization are required both for Bulgaria and for Southeast Europe. Last year’s amendments to the Energy Act provide for a program of sales of definite annual amounts of gas on the exchange by the public provider Bulgargas EAD and end customers. This ensures a competitive environment where more opportunities and competitive prices for households and businesses are created.

In early 2019 Bulgartransgaz registered a subsidiary, Gas Hub Balkan EAD. The company operates trading platforms for the needs of the natural gas markets within the Gas Hub Balkan.

CE: Could you please tell about the way the Bulgarian economy has been embedded into the single economic structure of the EU? In which sectors has the cooperation been established and which projects of common interest will be implemented?

Boyko Borissov: Upon its accession to the European Union on 1 January 2007, Bulgaria became part of a community of countries with a population of 500 million, which makes the Union the world’s largest single market and puts it at the forefront of trade and foreign investment globally.

Bulgaria’s full EU membership has helped our country maintain macroeconomic and financial stability in recent years and, in addition, take proactive measures to improve the business environment and to boost the GDP. Over the period since EU accession, our total volume of trade has gone up by 50%. Bulgarian exports have almost doubled and Bulgarian imports have marked 90% increase. It is extremely important to note that Bulgaria ranks among the leaders in financial stability and credit rating in the region of Eastern Europe.

The Bulgarian economy is part of the EU economy and of the Union’s common market. Cooperation is maintained in all sectors across the EU and multiple investments were made in Bulgaria after its accession to the EU.  Within the framework and with EU co-financing Bulgaria and the region of Southeast Europe saw the implementation of many projects in the Bulgarian industry, agriculture, transport, environment, energy and other sectors. Support is offered to enable the implementation of joint infrastructure projects of common European interest in the fields of energy, transport and other sectors.

Power grid and gas interconnectors of Bulgaria with the neighbor countries of the region of Southeast Europe materialize with EU support: the Interconnector Greece-Bulgaria is one of the Commission’s seven top priority projects to transport natural gas from the Shah Deniz 2 Gas Field; the modernization and rehabilitation of the Bulgarian gas transmission infrastructure; the Interconnector Bulgaria-Serbia. The implementation of projects of strategic importance in the field of electricity infrastructure is in progress. The construction of the new 400 kV internal power line between Maritsa East and Bourgas started on 15 May 2019. It is one of the five projects of common European interest that the Electricity System Operator EAD implements under the regulation for the development of the trans-European energy infrastructures. The other four projects are: the transmission of electricity from Maritsa East Substation, Bulgaria, to Nea Santa Substation, Greece; and the internal 40 kV power lines between Maritsa East Substation and Plovdiv Substation, between Maritsa East Substation and TPP Maritsa East 3 and between Varna Substation and Bourgas Substation.

The implementation of all these projects will guarantee the security of energy supply to the region and will generate better financial and economic conditions for consumers, both households and businesses. Accordingly, the economies of the countries in our region will become more competitive.

CE: Why should Bulgaria build a nuclear power plant in Belene when the construction of two additional gas pipelines (Southern Gas Corridor and TurkStream) is practically complete?

Boyko Borissov: In the last few years, the European Commission’s policy has been focused on the sustainable transition to low-emissions energy. The development of nuclear energy in strict compliance with international safety standards is a priority for the Bulgarian Government. We view this prospective option as a matter of energy and national security. Nuclear energy is also an excellent way to meet the challenges of climate change – it is a zero-emissions industry that fully meets today’s environmental requirements.

Bulgaria has more than 45 years of experience in the field of nuclear energy; we are successfully operating our first nuclear power plant, Kozloduy NPP, in strict compliance with the highest international safety standards and criteria. We have extremely well trained specialists in the industry. The nuclear power plant supplies approximately 34% of the country’s energy at affordable prices at that. In addition, we have two Generation III+ reactors that are stored in Bulgaria. Our goal is to use the available equipment, the licensed site and the EU-approved project.

These were the reasons for which on 7 June 2018 Bulgaria’s National Assembly decided to restart the exploration of opportunities for construction of Belene NPP. The bidders – Rosatom which is the designer of the equipment, the China National Nuclear Corporation (CNNC), the Korea Hydro & Nuclear Power, the French Framatome, the US General Electric – give us optimism that the procedure will be completed successfully. It is our plan that the Bulgarian Government will play with all tangible and intangible assets that have bearing on the project and will keep a blocking quota in the future special purpose vehicle. The committee to select a strategic investor produced the shortlist at yearend 2019 and is currently sending letters to the shortlisted bidders to invite them to submit binding offers.

It is important to note that the supplies of natural gas from different sources are expected to generate prerequisites for private investment, such as combined cycle power plants.

CE: What is your opinion about the western EU countries’ policy on abandoning nuclear fuel in the medium and long term?

Boyko Borissov: It is the right of every country to determine its own energy mix. What is important is that EU law is respected and that we all work together for our common carbon-neutral future. This guarantees the success and efficiency of the measures and policies implemented. This is at the core of our national view that has been consistently upheld over the years.

CE: How do you see the economic cooperation with Azerbaijan, Georgia and Turkey after the construction of the Baku-Tbilisi-Kars railway?

Boyko Borissov: The Baku-Tbilisi-Kars railway is part of the New Silk Road and aims at continuous freight traffic from Beijing to Brussels. It is expected to take 15 days less to move from China to Europe when compared to the alternative route via Russia and it is more than twice faster when compared to the existing sea route while the costs are below the half of the air service charges.

Azerbaijan, Georgia and Turkey are Bulgaria’s important trading partners. The major trade between Bulgaria and these three partners is still handled by the existing Black Sea ferry links or else road transport.

The Baku-Tbilisi-Kars railway will increase the capacity of the transport networks between Bulgaria and Europe on the one hand, and the South Caucasus region and Asia on the other hand. The diversification of logistics flows will help reduce the economic actors’ transportation costs. Together with the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas pipeline the Baku-Tbilisi-Kars railway makes the South Caucasus and Turkey a key transport corridor between Europe and Asia.

CE: What are the prospects of the goods turnover between the Balkans and these three countries? What hinders to establish an efficient investment and free trade space between these two regions?

Boyko Borissov: As an EU member state Bulgaria supports the Eastern Partnership which aims to strengthen the political association and economic integration of six East European and South Caucasian partner states, among them Azerbaijan and Georgia. While a customs union exists between the EU and Turkey to allow duty-free trade, negotiations with Azerbaijan opened in 2017 on a new agreement on a deep and comprehensive free trade area. An Association Agreement/Deep and Comprehensive Free Trade Area (AA/DCFTA)  with Georgia went into effect in 2014, bringing to a new level the relations between the EU and the EU member states on the one side and Georgia on the other side. As a full member of the European Union Bulgaria strictly observes the EU Common Commercial Policy and the Customs Union regulations.

Promising areas and sectors that hold potential for increased trade and investment are: information and communication technologies (ICTs), tourism, digitalization of trade, mechanical engineering (machines, equipment and parts thereof), electronics, electrical engineering, automotive, textile and knitwear industry, foods and beverages, innovations.

There exists potential to expand company-to-company cooperation, promote collaboration and accept Bulgarian companies into the network of suppliers and sub-suppliers including in sectors of mutual interest such as the manufacturing of machines, equipment and parts for them, electronics, electrical engineering and automotive industry.

There is a pronounced interest in the fields of agriculture and forestry. Bulgaria has extensive experience in agri-processing, food additives, veterinary products and medicines, including vaccines for animals.

CE: How is the construction of the highway with Greece progressing? What role will this route play in the trade turnover of the EU in general?

Boyko Borissov: The completion of the Strouma Motorway is a major priority of the Bulgarian Government in view of its strategic national, regional and European importance. Strouma Motorway is part of the “Orient/East-Med” Corridor of the main Trans-European Transport Network (TEN-T) and the busiest north-south route via Bulgaria. The motorway is part of the European Union’s Priority Project 7 including the motorway axis Igoumenitsa/Patras–Athens–Sofia–Budapest. The axis is used as the shortest distance between Western Europe, Central Europe and the Aegean Sea and also between Europe and Asia. Strouma Motorway is about 150 km long of which approximately 93 km are open to traffic. The rest of the stretch is under construction or is being prepared for works.

The motorway runs along the river Strouma and goes via scenic localities such as the Kresna Gorge.  This part of the motorway runs across an area that is of environmental concern and that is a setting of intensive advance earthworks. A series of measures will  be taken in this section in 2020 to mitigate the impacts by the existing Motorway E-79 on sites of the Natura 2000, the European network of nature protection areas in the territory of the European Union.

The thorough completion of the motorway will significantly improve the road network in Southeast Europe and will generate conditions conducive to enhanced cooperation, trade in goods and services and the launch of new business projects between the countries in the southern part of the Balkans.

CE: What is the impact of the expansion of the Chinese tied-credits related capital on the economy of Bulgaria and the whole region? To what degree is the investment climate of Bulgaria attractive for the local and foreign investors today?

Boyko Borissov: In recent years, Bulgaria has become a leading destination that attracts investment to the region owing to its taxation, combined with the availability of skilled labor and the lowest operating costs in Europe.

We witness a considerably rising interest in Bulgaria as an investment destination in both, manufacturing and high value added business services. Due to the investment-friendly conditions that are offered and the long-term political and macroeconomic stability, our country has attracted a large number of largescale projects in the automotive industry, the ITs and outsourcing.

Currently, with the Bulgarian Development Bank as a party we have three operating agreements with Chinese financial institutions. The third one was signed when China’s Premier visited our country in late 2018; it is a 10-year agreement with a two-year grace period and is the first payment of negotiated financing under a Framework Agreement worth 1.5 billion euro. The projects funded are mainly small and medium enterprises (SMEs) in sectors such as transport, logistics, tourism, renewable electricity generation, infrastructure, agriculture, food processing and other. The Chinese component in the projects may be seen in the form of Chinese imports or the use of Chinese equipment or Chinese support to Bulgarian companies that export to China.

CE: How do you see the role of Bulgaria in shift to renewable sources of energy?  To what extent this type of energy is competitive on the Bulgarian market and the market of the Balkan states?

Boyko Borissov: Bulgaria’s national policy to promote the use of energy from renewable sources is in line with the objectives and priorities of the European Union’s energy policy and with the commitments made under international agreements to which Bulgaria is a party. This policy takes into account the condition and development of the sector and socio-economic and environmental aspects.

In 2014 Bulgaria exceeded the national mandatory renewable energy target of 16% in the gross ultimate energy consumption for 2020. In 2012-2018, the country reported continuing growth and over-performance in the national target set for 2020, which reached 20.5%.

The adoption of the documents of the non-legislative initiative Clean Energy for All Europeans  Package in yearend 2018 set a new regulatory frame to formulate the EU’s energy and climate policy till 2030, with a time horizon 2050.

To meet the new requirements Bulgaria has prepared and will submit to the Commission a draft integrated national plan in the field of energy and climate in the period 2021-2030 and in the next ten-year periods between 2030 and 2050.

The policies and measures in the plan build on the scope and substance of those that currently exist, with a view to broader deployment and better integration of renewable energy in the achievement of the main benchmarks for affordable, safe, competitive, secure and sustainable energy system.

For the reason of the higher investment costs for the generation of electricity from renewable sources, the price of renewable energy is higher than the price fluctuations on the market. Hence the support in the form of preferential prices and premiums. In recent years, with the advanced and cheaper technologies this support has been shrinking more and more. An increasing proportion of electricity from renewable sources is traded on the organized exchange. In the future, given the rapid development of renewable electricity generation technologies, investment costs are expected to decrease and the prices of such energy are expected to gradually become competitive with the price of electricity from conventional sources. There are already indications of interest in the implementation of investment projects whose electricity should be traded at absolutely market prices.

I first met Mr. Yusifzade in 2007. At that time I was appointed a Head of the Mechanics and Energy Division of SOCAR Ecology Department and was supposed to hold a presentation. Many issues associated with this division were controlled by the First Vice President of SOCAR Khoshbakht Yusifzade.  He received me in his office and we talked a lot. I also would like to note that Mr. Yusifzade has a quite different attitude toward the oil industry workers. His unique sense of humor always sets the right tone for any conversation. In particular, he asked me a question which I still remember.

He asked what the difference between a generator and an engine was. As a usual, I continued giving scientific explanations. At that period I was thoroughly studying this field. I spoke with an enthusiasm and in details about various points of connection between these two units. He was listening very carefully. Since his looks did not reflect satisfaction, I continued drawing additional schemes and proceeded with explanation. He looked in my face and said: “Ruslan, you said in a wrong way”.

I was surprised and answered: “Mr. Yusifzade, I think it is all that I know. He said: “This question has a short answer”. A generator is a man, an engine is a woman.  A generator is earning while an engine is wasting”, he said, smiling. Mr. Yusifzade can explain a complex oil industry in a much simpler language, as a real oilman. 

Then I took over an important position at Azerigaz Production Union. And every time when telling many interesting things about Mr. Yusifzade, I bring this example to first-timers with a smile. A wise man’s words have always been valuable. And our nation has always given big significance to his words.

You have probably seen the degree of interest shown toward the speeches and opinions of Khoshbakht Yusifzade at SOCAR events held with the participation of the Azerbaijan Republic President Mr. Ilham Aliyev. The head of state is always very attentive to Mr. Yusifzade who enjoys the President’s special trust. There are a lot of new things that we learnt from Mr. Yusifzade, but many oil industry workers will keep learning many things in future as well. In particular, how a person should love and be responsible for his work. Learning it can bring success to everybody. I perfectly remember technical inspections carried out by Azerigaz PU at that time due to problems caused by carbon oxide. You cannot imagine how concerned Mr. Yusifzade was about incidents of suffocation among people. He used to summon urgent meetings right away. “Explain, show the way out, what we can do in order to prevent such incidents”, he said without hiding his anxiety, and has always managed to find a solution for a challenging situation.

I think everyone in Azerbaijan knows Mr. Yusifzade well enough. He is the only person-citizen with whom everyone is on good terms because he always tries to do good. He keeps working tirelessly these days as well. Looking at a ninety years old Khoshbakht Yusifzade, you are trying to be more responsible, saying: “Why should I get tired of work?” I would say that Mr. Yusifzade alone has the best recipe for happiness.

A famous geologist and geophysicist who brought up more than one generation of oilmen, an internationally recognized Azerbaijani geologist who knows the subsoil of the Caspian Sea like «the back of his hand», academician Khoshbakht Yusifzade has turned 90 this year.

Khoshbakht Yusifzade played a major role in developing Azerbaijan’s oil and gas industry both during the Soviet period and the years of independence. Khoshbakht Yusifzade was honored with the highest award, the Heydar Aliyev order, for his outstanding services to the country.

20 oil and gas condensate fields, including such fields as «Bahar», «Guneshli», «Azeri», «Chirag», «Kyapaz» and others, were discovered under his leadership and direct involvement. In addition, Khoshbakht Yusifzade is known as an author of more than 200 research papers, 18 monographs and 8 inventions included into the golden fund of the oil science of Azerbaijan.

A high status among the discovered fields is given to «Azeri», «Chirag» and «Guneshli» with initial proven reserves of 511 million tons, which then increased up to 1 billion tons in accordance with the forecast of K.Yusifzade. The term of development of this field has been extended at least till the year of 2050.

“We permanently stay in touch with Mr. Yusifzade. After drilling each new exploration well or in case of a good flow rate in any well, Mr. Yusifzafe is the first to tell me about it. Therefore, when he calls me, I know that I will hear good news”, the President of Azerbaijan said at the awarding ceremony. Successfully implementing the oil strategy initiated by the great leader Heydar Aliyev, Azerbaijan has directed oil revenues towards the overall development of our country. That is why we are currently ranked first in the CIS in terms of foreign exchange reserves per capita”.

«In 1997, - I. Aliyev continued, - after signing the contract for Absheron field, seismic works were carried out and the location of the exploration well was determined. Mr. Yusifzade then told foreign partners that they had chosen the wrong site of the well, there would be no reserves discovered.  They thought that he is an old man, while they have seismic facilities, specialists, thousands of employees, trade turnover reaching billions of dollars and the capitalization measured in the tens of billions.  Who cares what some geologist may say. They gave no prominence and regretted because they did not listen to Mr. Yusifzade and drilled the well idly. Thus, the contract was terminated, and they had to leave Azerbaijan and this field. However, a few years later, another company showed interest in Absheron field. The contract was signed again, the site of the exploration well was chosen correctly, which resulted in discovery of large reserves.

«Back in the 1990s, Mr. Yusifzade said that the gas reserves at Absheron field were at least 300 billion cubic meters. I can’t say how he knew this, but today the reality has shown that. A foreign company came to the same conclusion, and at the end of this or next year we will receive the first gas at Absheron field in the volume of 1.5 billion cubic meters. It is a mere indicator. Putting it in the words of Mr. Yusifzade, he knows the Caspian Sea inside and out. Khoshbakht Yusifzade has great merits in determination of the Caspian Sea legal status, as he participated in all the summits, and his words were perceived as absolute truth at the events. The legal status of the Caspian Sea was determined two years ago and an agreement was reached. But there had been numerous disputes before that happened, and the presence of Mr.Yusifzade in our delegation has always strengthened our position”, President of Azerbaijan stressed.

“I live a happy life filled with work for the welfare of my country», said the hero of the anniversary. «Although many of my age mates retired long time ago, I can’t imagine myself without my favorite job, without fighting for the Azerbaijani oil, without new discoveries and introduction of modern technologies, without traveling and meeting new people. Now is not the time to quit despite the fact that lying behind are dozens of discovered fields, many awards and scientific papers, work on dozens of contracts signed later, among which the most significant was the «Contract of the Century». Because there are still many achievements mapped for many years to come by our great national leader Heydar Aliyev, and no less wisely and consistently followed by his son, our esteemed President, Mr. Ilham Aliyev. My heart is filled with pride for sovereign Azerbaijan whose greatness has seen my modest contribution as well», Khoshbakht Yusifzade noted.