Export of Azerbaijani oil via Northern route not suspended yet

The proposal to transport oil via the Baku-Novorossiysk pipeline on the mutually beneficial conditions is in the interests of both Transneft and SOCAR, a source from State Oil Company of Azerbaijan (SOCAR) told Turan yesterday.

According to SOCAR, at present the term of the contract between the two companies has not expired yet and the talks to this effect are in progress. As soon as the talks are completed, the publicity will be informed about that.

“As far as statement of Transneft company that SOCAR has requested to extend the contract on transportation of Azerbaijani oil via the Baku-Novorossiysk pipeline is concerned, we have never submitted such a request,” a source from SOCAR said.

SOCAR explained that talks with Transneft have never stopped, the companies’ representatives constantly keep in touch. “If the agreement is achieved, then SOCAR does not rule out the possibility to resume oil export via the Baku-Novorossiysk pipeline,” a source from SOCAR said.

Yesterday Russian media reported that Transneft company will not cut off the Baku-Novorossiysk pipeline. The oil pipeline will allegedly remain in operation, because of SOCAR’s request to extend the agreement on transportation of Azerbaijani oil, Igor Demin, representative of Russian Transneft company, told RBC. “We have already decided to close the pipeline valves, but at the end of last week the Azerbaijani company requested to prolong the agreement, which expires on February 14, 2014. We have been negotiating now to conclude a commercial agreement instead of the one expiring tomorrow,” he said.

Demin added that the sides will have to make decision on the volume of shipment, rates and quality of the oil delivered to the pipeline. Transneft’s representative also added that the future agreement also must envisage the guarantees of delivery of the approved volume of oil by SOCAR.

In May 2013 Russian Premier Dmitrii Medvedev signed the resolution to suspend the agreement between Russia and Azerbaijan on transit of Azerbaijani oil (via the Baku-Novorossiysk oil pipeline). Until the end of 2013 the oil deliveries via the pipeline continued in line with the effective agreement. During 2013 Azerbaijan exported 1,751,000 tons of oil via Novorossiysk against 2,060,000 tons in 2012.

ANN.Az