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Nikolay Ryzhkov

Azerbaijan loses its oil attractiveness

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As it is known, the two largest American oil companies ExxonMobil and Chevron are leaving Azerbaijan. This is reported by the Reuters agency.

They sell their shares to the largest Azerbaijani consortium of the Operating Company and finally leave the country after 25 years of work.

It should be noted that the Operating Company operates the most profitable mine in Azerbaijan - Azeri-Chirag-Guneshli, while ExxonMobil and Chevron own 6.8% and 9.7% of the consortium, respectively.

According to Reuters, ExxonMobil wants to sell its $ 2 billion stake. Chevron wants to withdraw from the Baku-Tbilisi-Ceyhan pipeline program by selling 8.9% of its shares.

Recall that the Azerbaijani company Operating Company was founded in 1994, after the signing of the so-called “Contract of the Century”, when a number of large transnational oil and gas companies led by British Petroleum began operating in this country. Later, many of them also joined the gas projects, creating the Shah-Deniz consortium.

However, the country's bright oil and gas future began to fade back in 2010, when oil production in 2017 plummeted from 50 to 38 million tons. The situation deteriorated sharply in 2014, when oil prices plummeted from $ 124 to $ 26.

It was during this period that two of the largest European oil companies left Azerbaijan - the Norwegian StatOil and the French TOTAL. Many explain the departure of these transnational giants by the loss of the attractiveness of the oil and gas sector in Azerbaijan.

Taking advantage of the difficult financial and economic situation in Azerbaijan, British Petroleum forced to confirm the so-called agreement of the century, strengthening their position in the oil and gas system of this country. In this agreement, however, it was noted that the price of Azerbaijani oil is about $ 55 per barrel, and the British can revise the contract in the event of a fall in oil prices.

Currently, when oil prices began to decline again, and the cost of Brent crude oil for one month decreased from $ 86 to $ 60, US companies began to leave Azerbaijan.

This is symptomatic and shows that the Azerbaijani oil sunset is not so far away, and that this country is losing its main regional trump card - power industry.

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