Romania – Azerbaijan Strategic Partnership: SOCAR and the Oil & Gas road between Europe and Asia

SOCAR - The State Oil Company of Azerbaijan Republic, renown worldwide for its activity in the oil and gas field, is investing billions of dollars every year in the transport infrastructure, being involved in key projects aiming at increasing Europe’s energy security by diversifying the natural gas resources. According to Foreign Minister Titus Corlatean there is a long existing cooperation relationship between Romania and the Azerbaijan Republic, consisting especially of regional economic projects. As far as cooperation in the field of energy is concerned, this is the main target within the Romanian-Azeri strategic partnership, he added.

Starting 2011 the company has got involved in Romania, through its branch SOCAR Petroleum, by building and consolidating a national network of gas stations. It has succeeded in a short period of time to become one of the most important competitors on the Romanian fuel market. It has invested in four years some EUR 50 million, has created a network of 30 gas stations and more than 300 jobs. Its next target: to open at least 10 gas stations in 2015.

SOCAR Petroleum plans for the future aim at identifying new venues for building filling stations. The Azerbaijani energy giant entered the Romanian market by purchasing and rebranding the filling stations of former local company Romtranspetrol in the region of Moldavia. Four years after entering in Romania, SOCAR succeeded to set up a 30 filling stations network, through a very ambitious investing plan. For next year it has set as target to open at least 10 fuelling stations.

Top priorities

According to SOCAR officials, the company intends to reach a 100 filling stations network on medium term. SOCAR Petroleum, the Romanian branch of the Azeri oil company, registered a turnover of RON 582.8 million, 2.5 times more against the 2012 level of RON 232.7 million. The development plan at national level included, in a first phase, the Romanian capital as well as the main county resident cities. The main activity is the retail of own fuel through the filling stations, which accounts for 90 percent of the turnover, the rest of 10 percent being represented by transport activities with 20 motor tank wagons and incomes from renting assets.

Currently SOCAR owns filling stations in Azerbaijan, Switzerland, Georgia, Ukraine and Romania. It has representations in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, the UK, Iran, Germany and Ukraine and trade companies in Switzerland, Singapore, Vietnam, Nigeria, etc.

20 years since the ‘contract of the century’

Last month SOCAR celebrated 20 years since Azerbaijan signed a contract for joint exploitation of Azeri and Cirag oil deposits and part of the Ghyunesli deposit near the Caspian Sea Azeri seashore with big companies from the US, Russia, the UK, Turkey and Norway. It was a historical moment that marked the start of deliveries of oil and gas to Europe and to other regions of the world. The new oil strategy was initiated by the Azeri President Heydar Aliyev in 1994, a strategy still working. The Azeri leader had understood that wiping out borders for oil transit will open the road to a swift development of the economy and, consequently, to the development of the Azeri society. “Through SOCAR, Azerbaijan has become part of the international strategy for energy security at European and world level. On the analogy of ‘silk road’ through the signing of the ‘contract of the century’ by President Heydar Aliyev we have opened an ‘oil and gas road’ between Europe and Asia that has led to deep changes for all the countries involved,” Hamza Karimov, CEO SOCAR Romania, said during a press conference on that occasion.

When are the works for TANAP and TAP pipelines to commence

The construction works for the Trans-Anatolian Pipeline (TANAP) are to begin on April 1, 2015, head of the Azeri state company SOCAR, Rovnag Abdullayev, said according to azernews.az. The TANAP project, developed by SOCAR in cooperation with state companies Botas and TPAO from Turkey, will supply gas from the Shah Deniz field to the Turkish-Greek border in eastern Turkey. Estimates say the Trans-Anatolian pipeline will reach its full capacity designed at 31 billion cubic metres per annum in 2026. The initial capacity of the pipeline will be 16 billion cubic meters of gas a year. TANAP will link up with Trans-Adriatic (TAP) pipeline on the Turkish-Greek border. Costs for the project are expected to reach USD 10-11 billion. The TAP pipeline construction works are scheduled to start also in 2015 with an initial capacity of 10 billion cubic metres that is to be extended later to 20 billion cubic metres per year.

Romania rests its hopes to access Azeri natural gas to the TAP pipeline, to which it aims interconnection after the Nabucco project failed. The TAP pipeline should be finalized by 2019. The Shah Deniz consortium had announced in June last year that TAP was selected to become the main transport route for gas to Europe. Azerbaijan agreed in September 2013 with nine companies from the European Union to sell more than 10 billion cubic metres of natural gas every year during the second stage of developing the Shah Deniz field. The contracts are valid for a period of 25 years, being signed by SOCAR and Axpo Trading AG, Bulgargaz EAD, Depa, Gas Natural Fenosa, Hera Trading SRL, Shell Energy Europe, Enel SpA, E.ON SE and GDF Suez SA.

Romania aims at extending cooperation with Azerbaijan

Romania and Azerbaijan are partners in developing economic projects of regional interest, while the cooperation in the field of energy is the main objective within the Romanian-Azeri partnership, the Romanian Foreign Minister Titus Corlatean said in a press conference held together with his Azeri counterpart Elmar Mammadyarov in Bucharest in mid September. “We are determined to go forth and to advance in building the LNG transport inter-connector to link Azerbaijan, Georgia, Hungary and Romania, the so-called AGRI project; we have also called forth the possibility to develop a project, a transport route for goods to connect the Caspian Sea to the Black Sea, further heading on towards the European Union market. There is openness, there is interest and we’ve agreed upon a joint working mechanism to make the project move on, a project that would involve more partners and more countries in the region,” the Romanian foreign minister underscored.

In his turn, Elmar Mammadyarov stressed that bilateral Romanian-Azeri relations are developing well, pointing to the possibilities for further cooperation in the field of energy. Within this context, the Azeri minister recalled the launching in Baku of the ‘Southern Gas Corridor’ worth USD 45 billion, saying that the Romanian companies’ expertise will be welcome in this regard.

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October 2014

June 2017