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Russia, Azerbaijan Seek New Oil Transit Deal
Russian Foreign Minister Sergei Lavrov
MOSCOW, May 21 (RIA Novosti) - Russia and Azerbaijan are negotiating a
new oil transit agreement, Russian Foreign Minister Sergei Lavrov said
during a news conference on Tuesday after a bilateral meeting with
Azerbaijan's foreign minister.
`Our respective energy agencies and companies are working on preparing
a new intergovernmental agreement which will reflect current
realities,' Lavrov said.
Last Tuesday, Russia published a document terminating the 1996 transit
agreement. Lavrov explained that the 1996 agreement had been signed
`on the assumption that the pipeline would be filled 100 percent and
based on that, the tariff was established.'
That condition was not met, Lavrov said, adding the agreement had been
terminated for economic reasons.
Sources in the State Oil Company of Azerbaijan (SOCAR) were cited by
local media outlets in Azerbaijan on May 14 as saying they had not
received any advance warning of the termination.
However, later that week, Deputy Head of Azerbaijan's Presidential
Administration Novruz Mammadov told local media that `the
transportation of oil at the moment is simply not profitable to both
parties in terms of economic and commercial viability.' Mammadov added
`we accept the decision of the Russian Federation as perfectly
normal.'
Speaking after Tuesday's meeting, Azerbaijan's Foreign Minister Elmar
Mammadyarov confirmed that talks are currently underway between SOCAR
and Russia's oil pipeline operator Transneft on this issue, and urged
people not to politicize the issue, Trend News Agency reported.
The 1996 agreement to pump oil via the Baku-Novorossiysk pipeline
envisaged the transit of at least five million metric tons of oil a
year, with a tariff of about $15.70 per metric ton. However, SOCAR
sent about two million metric tons of oil via the pipeline in 2012 and
2011, and planned to further reduce that to 1.6 million metric tons
this year.
Transneft said it had lost about $50 million a year because the
pipeline was operating at half capacity. Azerbaijan has been having
problem filling the pipeline to capacity as its oil exports have been
steadily falling since 2008.
Earlier this year, Moscow announced it would no longer rent the Gabala
early warning radar station in Azerbaijan, after the two sides failed
to agree on new terms. The lease for Gabala, signed in 2002, expired
in December 2012. Russia is replacing Gabala with new systems in
southern Russia.
Last June, Russia said it would double the number of personnel and
deploy Iskander short-range ballistic missiles at its Gyumri military
base in neighboring Armenia.
Russian Foreign Minister Sergei Lavrov
MOSCOW, May 21 (RIA Novosti) - Russia and Azerbaijan are negotiating a
new oil transit agreement, Russian Foreign Minister Sergei Lavrov said
during a news conference on Tuesday after a bilateral meeting with
Azerbaijan's foreign minister.
`Our respective energy agencies and companies are working on preparing
a new intergovernmental agreement which will reflect current
realities,' Lavrov said.
Last Tuesday, Russia published a document terminating the 1996 transit
agreement. Lavrov explained that the 1996 agreement had been signed
`on the assumption that the pipeline would be filled 100 percent and
based on that, the tariff was established.'
That condition was not met, Lavrov said, adding the agreement had been
terminated for economic reasons.
Sources in the State Oil Company of Azerbaijan (SOCAR) were cited by
local media outlets in Azerbaijan on May 14 as saying they had not
received any advance warning of the termination.
However, later that week, Deputy Head of Azerbaijan's Presidential
Administration Novruz Mammadov told local media that `the
transportation of oil at the moment is simply not profitable to both
parties in terms of economic and commercial viability.' Mammadov added
`we accept the decision of the Russian Federation as perfectly
normal.'
Speaking after Tuesday's meeting, Azerbaijan's Foreign Minister Elmar
Mammadyarov confirmed that talks are currently underway between SOCAR
and Russia's oil pipeline operator Transneft on this issue, and urged
people not to politicize the issue, Trend News Agency reported.
The 1996 agreement to pump oil via the Baku-Novorossiysk pipeline
envisaged the transit of at least five million metric tons of oil a
year, with a tariff of about $15.70 per metric ton. However, SOCAR
sent about two million metric tons of oil via the pipeline in 2012 and
2011, and planned to further reduce that to 1.6 million metric tons
this year.
Transneft said it had lost about $50 million a year because the
pipeline was operating at half capacity. Azerbaijan has been having
problem filling the pipeline to capacity as its oil exports have been
steadily falling since 2008.
Earlier this year, Moscow announced it would no longer rent the Gabala
early warning radar station in Azerbaijan, after the two sides failed
to agree on new terms. The lease for Gabala, signed in 2002, expired
in December 2012. Russia is replacing Gabala with new systems in
southern Russia.
Last June, Russia said it would double the number of personnel and
deploy Iskander short-range ballistic missiles at its Gyumri military
base in neighboring Armenia.