Energy

Azerbaijan has been famous for its oil springs and natural gas sources since ancient times, when Zoroastrians built temples around burning gas vents in the ground. By the beginning of the twentieth century Azerbaijan was supplying almost half the world’s oil, but under-investment in Soviet times led the industry into decline.

New BTC oil pipeline to bring benefits

Azerbaijan has 1.2 billion barrels of proven oil reserves, and considerably more potential reserves in undeveloped offshore Caspian fields. With international participation through joint ventures and production sharing agreements (PSAs), it is estimated that Azerbaijan could produce one million bbl/day by 2010, and two million bbl/day within 20 years.

The Azerbaijan International Operating Company (AIOC) signed what was described as “the deal of the century” in September 1994. This is a 30-year contract to develop three oil fields – at Azeri, Chirag and the deepwater parts of Gunashli – with total reserves estimated at three to five billion barrels. It is estimated that this deal will create 80 billion Euros in oil revenues over 30 years, of which Azerbaijan will realize 80 percent.

President Aliyev has created a State Oil Fund to use oil revenues responsibly. This money will be directed towards education, poverty reduction, and raising rural living standards. President Aliyev is determined to create a strong, transparent economy where every citizen knows where every oil dollar goes in Azerbaijan.

Azerbaijan previously had just two export routes. The Baku-Novorossiisk “northern route” pipeline sends oil to the Russian Black Sea, and the Baku-Supsa pipeline (the “western route”) carries oil to Batumi on Georgia’s Black Sea coast. Construction work on the new Baku-Tbilisi-Ceyhan (BTC) oil pipeline began in May 2003. It will carry up to one million bbl/day from the Sangachal terminal on the Caspian Sea in Azerbaijan, to Ceyhan in Turkey, creating a new East-West energy corridor.

Modern Construction Group and Encotec

“We work to very high quality standards.”

Emin Aliyev, Managing Director

Modern Construction Group (MCG) is a construction firm working in Azerbaijan’s oil and gas sector, and Encotec is a design engineering company cooperating closely with them on many projects. Together, these two companies work to western quality standards for demanding international clients.
MCG has completed a number of successful projects for McDermott, Azpetrol, Schlumberger, Salian Oil and Halliburton. It specializes in turnkey construction projects, particularly for the oil and gas sector. Its activi-ties include building works, upgrading and refurbishment projects, furniture manufacturing for special purposes, electrical works, and marine vessel renovation and upgrading.
According to Managing Director Emin Aliyev, “We provide cost efficient, high quality services. We also provide design consultancy services, so that customers can select the most suitable and cost-effective option.” Aliyev adds that MCG has a track record of completing projects on time and on budget, enforcing strict quality control measures.
Encotec is a design engineering & consulting company offering high level engineering services, including project management, procurement, installation and construction supervision, primarily in the oil & gas sector. Managing Director Faik Rzayev says that Encotec is also expert in geotechnical and geodesic studies as well as conceptual engineering.
“We have solved many practical engineering problems in our work with some of the largest oil com-panies in Azerbaijan,” Rzayev points out. “Our clients include McDermott, Karasu, Azfen, BUE Engi-neering, BP, Petrofac, ERM and Thales.” Encotec is undertaking ISO 9001:2000 certification of its own Quality Management System.
Both MCG and Encotec are among the leading companies in their sectors, and present a strong partnership to better serve clients. They plan to grow their project numbers, increase staff levels and invest in new facilities. “If we see development potential in a partnership opportunity, we are ready to grasp it,” says Aliyev. “Opportunities for foreign investment also exist at MCG.”

Azpetrol Group

“Watch this company!”

Azpetrol, founded in 1997 to set up petrol stations throughout the country, has grown to become one of Azerbaijan’s leading private companies. Today, Azpetrol operates the country’s leading network of service stations, with 54 standard service stations and four LPG stations. Azpetrol financial statements are audited by Ernst & Young and its operations comply with ISO 9001 standards. Further certifications, such as ISO 14001 for environmental management and OHSAS 18001 for occupational health and safety are in the process of being realized. Apart from its petrol and LPG retail business, the company’s subsidiaries and joint ventures with international companies, provide transportation, logistics and pipe-coating services to oil and gas companies operating in the Caspian Sea region. Azertrans for example, Azpetrol’s largest subsidiary, transported 4 million tons of crude oil and oil products via its two state-of-the-art marine terminals in Azerbaijan and with its fleet of rail tank cars to the Georgian Black Sea coast in 2003. Azpetrol’s joint venture with the German company EUPEC, owns and operates one of the most advanced pipe-coating plants in the world and the only mo-dern pipe-coating plant in the Caspian Sea region. Thanks to their world-class services, Azpetrol, its subsidiaries and joint ventures serve most of the multinational oil companies operating in Azerbaijan.

Explaining Azpetrol’s outstanding success, Rafiq Aliyev the founder of Azpetrol says, “Our commitment to the provision of reliable, safe, high-quality services and the talent of Azpetrol’s employees are the key to our success”. Azpetrol’s success benefits also the community, apart from having created more than 3,000 jobs Azpetrol supports charities supporting children, war victims, education, culture as well as sponsors the national Azerbaijani boxing and volleyball teams.

Aliyev points out that Azpetrol will continue to grow rapidly on the basis of its expansion plans in Azerbaijan and in neighboring countries. The company’s plans include among others moving into upstream operations, the construction of additional facilities related to the transport of hydrocarbon products, the expansion of its petrol and LPG station network and the provision of shipping services in the Caspian Sea. Azpetrol seeks to realize these plans through its own enterprises and through the creation of strategic partnerships, a strategy that has proven successful for Azpetrol over the last years. He adds, “In the medium-term we plan to be listed on an international stock exchange. This will give international investors the opportunity to participate in the company’s and the Caspian Sea regions extraordinary growth.” To potential partners in the United States, Aliyev concludes, “Watch this company!”