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Azeri SOCAR eyes oil in northern, eastern Russia

Fri, 06th Sep 2013 10:33

* SOCAR eyes Rosneft projects in north and east of Russia

* Azerbaijan has tried to stabilise oil production

* Putin failed to clinch concrete deal in Baku last month

By Francesco Guarascio

BAKU, Sept 6 (Reuters) - Azeri state energy company SOCAR,faced with falling oil output, wants to tap vast hydrocarbonreserves in Russia as part of a cooperation agreement withRosneft, SOCAR's president said on Friday.

Rovnag Abdullayev made the comment on SOCAR's plannedpartnership with Rosneft, the world's top listed oil producer, amonth after Russian President Vladimir Putin failed to clinch aconcrete energy deal on a rare trip to Azerbaijan.

"Rosneft has huge reserves. It owns great prospectiveprojects in the east and north of Russia. We want to participatein these projects. Big companies, such as Chevron, Exxon and BP are all involved in these projects. Wealso want to take part," Abdullayev told reporters.

A decline in oil production in Azerbaijan, which dependsheavily on energy product sales for revenue, had previouslyraised concerns in the former Soviet republic, where BP operatesthe huge Azeri-Chirag-Guneshli (ACG) oilfields.

Oil output in Azerbaijan stabilised this year near average2012 levels, with first-half output of 672,000 barrels a day.

Last month, SOCAR and Russia's Rosneft signed a vaguecooperation agreement without a concrete deal.

Western oil majors such as BP, Statoil and ExxonMobil have dominated the Azeri oil industry since the collapseof the Soviet Union while relations between Moscow and Baku havebeen mostly cool.

Russia has long tried to increase its presence inAzerbaijan, a country Europe hopes will help lessen itsdependence on Russian gas after Moscow's "gas wars" with Ukrainedisrupted deliveries in 2006 and 2009.

EXPLORING OPTIONS

"Currently we are exploring opportunities with Rosneft forcooperation. There are ongoing negotiations between ourcompanies," Abdullayev said.

He said talks included the possibility for Rosneft to bepart of projects run by SOCAR, adding that Azerbaijan's Absherongas project was not considered an important part of thediscussions.

"We are evaluating in which of our projects they (Rosneft)can take part. Absheron is very small, if we look at this widerpicture," Abdullayev said.

In July, industry sources told Reuters Rosneft was seeking astake in the Absheron project but this was not mentioned in thecooperation agreement signed by the companies.

SOCAR and French oil company Total each hold 40percent of Absheron, with the rest being held by GDF Suez. Azeri officials have said Absheron will help increaseAzeri gas exports in coming years.

Abdullayev said the cooperation agreement with Rosneftmainly concerned crude swap operations, and joint use ofinfrastructure.

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