Energy and Security in the Caucasus by Emmanuel Karagiannis

Author:Emmanuel Karagiannis [Karagiannis, Emmanuel]
Language: eng
Format: epub
Tags: Social Science, Ethnic Studies, General, Regional Studies
ISBN: 9781134547425
Google: MeWOAQAAQBAJ
Publisher: Routledge
Published: 2013-10-18T04:52:29+00:00

President Aliyev invited the Russian oil giant LUKoil to join the proposed international offshore consortium in order to give it more legitimacy. Indeed, in February 1994, negotiations with foreign companies were resumed, this time with the active participation of LUKoil. In this way, Aliyev was able to play different forces in Russia itself off each other. The powerful Russian oil lobby associated with Prime Minister Chernomyrdin was behind LUKoil, and it immediately began to lobby for the recognition of the ‘Contract of the Century’. Its pressure became a positive force countering the pressure of the Foreign Ministry and the Russian military, whose objectives were to look at Azerbaijan not as an economic partner, but as sphere of influence. So far, this policy has been implemented fairly successfully. LUKoil, looking suspiciously like an ambassador for Moscow, has made impressive advances in Azerbaijan that would not have been possible without political support. As a result, LUKoil’s interests in Azerbaijan include:

• The AIOC consortium where it has a 10 per cent stake at the Azeri, and Chirag fields, and at deep water sections of Guneshli;

• At Shakh Deniz field, in the south east Caspian, LUKoil has a 10 per cent interest in a large foreign group led by BP. Estimated reserves are 1.7 billion barrels of oil;

• Independently of foreign companies, LUKoil has a 60 per cent stake in Yalama field with state SOCAR holding the remaining 40 per cent.13

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