February 19, 2021

At a meeting on February 18, the Committee on International Relations and Interparliamentary Relations of the Milli Mejlis approved and recommended the Azerbaijani-Turkmen Memorandum of Understanding on joint exploration, development and operation of hydrocarbon resources in the Caspian Sea for consideration by the parliament.


The document provides for joint development of the Dostlug field. At the same time, 30% of the share in the project will belong to Azerbaijan, and 70% – to Turkmenistan.


According to the document, the transportation of hydrocarbon resources from the Dostlug field to the international market will be carried out based on competitiveness using the existing transport systems of Azerbaijan and in accordance with the norms and practices of the international oil and gas industry.


Why is the controversial deposit that remained for many years divided in the specified proportion? What will Azerbaijan get from the project, in which its share participation is 30 percent?


Commenting on these issues to Turan, Asim Mollazade, a member of the parliamentary committee on international relations and inter-parliamentary relations, noted that the document is a memorandum.


The equity participation will be finalized after the signing of the relevant contract. So far, Azerbaijan owns 30% of the share, but this also applies to investments. The distribution of shares is carried out taking into account the investment and the amount of work. However, all these issues will be clarified, and there may be changes in the final contract, Mollazade said.


The signed memorandum is of great importance for Azerbaijan, which means that Azerbaijan will play an active role in the energy ties between Central Asia and Europe. “The energy resources of the Caspian Sea will be supplied to Europe through Azerbaijan, and this will bring dividends to the country,” Mollazade said.


Expert Neymat Aliyev believes that when developing deposits, their ownership does not matter. “It is more important here to ensure commercial interests. For example, Azeri-Chirag-Guneshli belongs to Azerbaijan, but its share in production is very small. The bulk of the revenue comes from foreign companies working in the fields, as they have invested more funds. The same is with the Dostlug project, the expert said.


According to him, the share participation of the parties in the project corresponds to their shares in investments. The main reason for the smaller share of Azerbaijan in the project is the lack of funding sources. “If we look at the state budget for 2021, we will see an insignificant amount of funds provided for state investments.


At the same time, local investment in recent years has fallen from $ 16 billion to $ 5 billion. Azerbaijan’s financial resources are limited, so Azerbaijan has to be content with 30%,” the expert noted.


Source: Turan News Agency

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