Posted on Mar 07, 2020
The UK and Azerbaijan have a long history of economic cooperation, which goes back three decades, since the collapse of the Soviet Union. Since its independence, in the latter part of 1991, the nation of some 10 million people has emerged as a major player in the oil and gas sector, and the UK has been a major partner since 1994 when BP signed a contract with SOCAR, the state owned oil company, writes Gary Cartwright.
Azerbaijan is considered one of the most important countries in the world for oil exploration. It is also the starting point for the BTC oil pipeline which connects Baku with Ceyhan in Turkey and in which BP owns a 30% stake, making it the single largest shareholder.
The country is experiencing significant economic growth, unsurprisingly driven by the Hydro-Carbon sector.
EU Today was able to meet recently in Baku with Minister of Economy Mikayil Jabbarov, where we were able to discuss the future trading relationship between the two countries post-Brexit.
The Minister explained that with growing prosperity, there inevitably comes population growth, and demand for jobs: in recent years some 100,000 people have entered into employment in the country.
Azerbaijan is not a member of the World Trade Organisation (WTO), and has been highly successful in negotiating trade deals despite this. In the last few days it has signed a deal with Turkey, one of its most important trading partners, for the elimination of tariffs on Azerbaijani products. This is important as Turkey is a major customer for the country's non-oil products, and comes at a time when the Minister is prioritising diversification of the economy.
We asked if, as Boris Johnson's government has said it is happy to strike deals with non-WTO countries, this would open opportunities for increased co-operation.
The Minister was extremely positive, and complimentary towards Azerbaijan's UK partners, who bring both investment and technical expertise.
The UK and Azerbaijan have a long history of co-operation and investment based on a mainly bi-lateral relationship. I forsee no negative effect on our relationship from Brexit whatsoever.
His confidence is shared by leading academic Fragkiskos Filippaios, who in 2019 referring to Brexit said that there is " a very big opportunity here for Azerbaijan as UK will look to establish itself as an independent trade and investment partner globally".
It has been declared by the UK government that the day after Brexit, the UK will seek to reposition itself in the global economy and form political and economic relations with other global players. This presents a big opportunity for countries such as Azerbaijan to form closer trade and economic ties with the UK and benefit from UK’s infrastructure, knowledge creation and human capital. UK will have to offer access to its market to countries around the world to maintain its competitiveness. For companies like BP, this will only be an opportunity to strengthen their ties with countries like Azerbaijan and capitalising on the successful operations of the last 25 years.
BP for it's part, is thinking long-term, and is currently involved in a stage in the development, along with it's international partners, the giant ACG oil fields in the Caspian Sea. Due to come on stream in 2023, the new development includes a new offshore platform and facilities designed to process up to 100,000 barrels of oil per day.
Working together over the past 25 years, this remarkable partnership has turned these world-class assets into tremendous benefits for the people of Azerbaijan. The ACE extension builds on that legacy and helps ensure that the next quarter century will be just as bright.
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