Energy in Azerbaijan

[Vrej1915]

Re: Energy in Azerbaijan

http://www.bbc.com/azeri/azerbaijan/2015/12/151212_azerbaijan_platform_fire_analysis

[Mher]

Re: Energy in Azerbaijan

Worst Performing currency of 2015 in the world
Even more expected to come


UPDATE 4-Azerbaijan cuts its currency loose, triggering 32 pct plunge

http://www.reuters.com/article/azerbaijan-rate-idINL8N14A0BU20151221

[Shant03]

Re: Energy in Azerbaijan

So apparently - at the same time that the U.S. Congress is considering limiting U.S. ties with Azerbaijan (over Baku's human rights abuses), the Azerbaijani Parliament is considering a measure to suspend all relations with America (because, apparently, the U.S. government is controlled by the "Armenian Lobby"). - Aram Suren Hamparian

http://m.apa.az/en/news/236922

Azerbaijani parliament receives bill seeking suspension of all relations with US

The author of the bill is Rovshan Rzayev, who is the deputy chairman of the parliamentary Committee on Legal Policy and State Building also a board member of the “Azerbaijani Community of Nagorno-Karabakh” Public Union.

According to the bill, independent Azerbaijan has faced double standards demonstrated by various organizations of a number of countries including the US.

“These organizations are seeking to subdue Azerbaijan – a state with own independent policy – and they are trying to intervene in its domestic and foreign policy by a variety of means, one of which is to have a country under constant pressure by demonstrating a biased stance on issues like human rights and democracy,” says the bill.

The document also mentions that while preparing constant reports on the situation of human rights in other countries, the US on the other hand evades from joining main international agreements on human rights.

“To date, the US has ratified only four of the 14 UN major documents on human rights. The US is one of the two countries (US and Somalia) that have not joined the convention on children’s rights so far,” says the bill.

The bill goes on to note that cases of religious and racial discrimination, xenophobia and islamophobia have lately increased in the US, where there is total control on society. Cases of intervention in personal life as well as restrictions on freedom of expression and press have mounted.

“Legal corruption and lobbying have become one of the main attributes of the US political system. The ongoing negative developments in the US, as well as a claim to global hegemony compel Azerbaijan to review the cooperation and bilateral relations formed over the years with this country,” says the bill.

The bill includes provisions regarding racial and religious discrimination, establishing a system of total control over the society, restrictions on freedom of speech and press, electoral fraud, violation of the norms and principles of international law.

The bill recommends the Foreign Ministry to refuse to issue visas to individuals representing in the US government and their family members, the congressmen and senators consistently working for discrediting Azerbaijan in Congress and their families, officials cooperating with Armenian diaspora organizations and lobby groups, leaders of media outlets, NGO representatives and experts conducting a smear campaign against Azerbaijan.

Meanwhile, the visa sanction is expected to be imposed on those receiving large sums of money as a result of collaboration with top US officials, as well as on people who are elected to the electoral authorities of the US with the support of the Armenian diaspora organizations and lobby groups and who oppose the improvement of the electoral legislation and US accession to international treaties on human rights.


The bill also recommends the Cabinet of Ministers to consider the suspension of all contacts between the state authorities of Azerbaijan and US companies and representatives of the private sector to cancel contracts concluded with US companies and renounce the establishment of new trade and economic ties.

Relevant central executive bodies are recommended not to allow US-based NGOs to implement programs and projects in Azerbaijan and close their bank accounts, as well as take necessary measures to suspend the activities of branches and representative offices of NGOs financed by the US government and Congress in Azerbaijan.

The bill also envisages the preparation of proposals for terminating the cooperation with the US in the fields of trade, energy, military and security.

Moreover, it covers the suspension of Azerbaijan’s participation in operations of the International Security Assistance Force (ISAF) in Afghanistan, the ban on transportation of military and other types of US cargo thorough Azerbaijan and use of local infrastructure for this purpose and the commencement of the procedure to recall the US from the co-chairmanship of the OSCE Minsk Group.

The following issues need to be resolved in order to cancel sanctions envisaged by the bill:

The US must put an end to the flagrant violation of human rights, the inhumane treatment of prisoners and eliminate manifestations of racial and religious discrimination and xenophobia and Islamophobia; the US must refrain from the use of inadequate force against the participants of protest actions; the US must prevent restriction of freedom of speech and press and interference in the private lives of citizens; the US must keep a consistent fight against corruption; the US must avoid the practice of lobbying; the US must reject the harmful practice widespread in the election process and put an end to electoral fraud; the US must abandon efforts to grossly interfere in the international affairs of other countries; the US must avoid to conduct a campaign to smear and discredit the Republic of Azerbaijan and prevent reoccurrence of such cases in the future; the US must take an unambiguous stance on the Armenian-Azerbaijani Nagorno-Karabakh conflict in accordance with international law, impose sanctions on the aggressor and break off all its ties with the separatist regime created in occupied Nagorno-Karabakh region of Azerbaijan.

[Mher]

Re: Energy in Azerbaijan

Azerbaijan Plans More Modest Defense Budget In 2016

Four years after declaring that its annual military expenditure has surpassed Armenia’s entire state budget worth about $3 billion, Azerbaijan reportedly plans to spend only $1.2 billion on defense and security in 2016.

The collapse of international oil prices and the resulting sharp depreciation of the Azerbaijani national currency, the manat, may have put an end to a decade-long massive military buildup which Baku hoped will help it win back Nagorno-Karabakh and other Armenian-controlled territories.

The oil-rich country’s government is to cut its total expenditure by as much as 23 percent, to 16.3 billion manats in accordance with its budget for 2016 passed by the Azerbaijani parliamentary in October. Last week’s further devaluation of the manat slashed the budget’s dollar-denominated value from $15.5 billion to $10.5 billion.

As recently as a year ago, the Azerbaijani Finance Minister Samir Sharifov claimed that despite falling crude prices Azerbaijan’s defense spending will grow by more than a quarter in 2015 to 3.8 billion manats, then the equivalent of $4.8 billion. He emphasized the fact that Armenia’s total budget spending is projected at only $3.2 billion.

“Azerbaijan’s armed forces need better equipment as Armenia continues its occupation policy in defiance of international law,” the Bloomberg news agency quoted Sharifov as saying.

Shortly afterwards, the Azerbaijani news agency APA reported that the 2015 budget commits the Azerbaijani government to spending only 3.3 billion manats on “military institutions.” Those included not only the armed forces but also interior troops, the National Security Ministry and other security services.

APA and other state-controlled Azerbaijani media only added to the confusion when they said this fall, citing government data, that Azerbaijan’s defense budget will grow from 1.78 billion manats in 2015 to 1.84 billion manats in 2016. In contrast to previous years, they presented no breakdowns of this spending target. Accordingly, there was no word on allocations to “special defense projects,” an apparent official euphemism for the arms procurements from foreign states.

Azerbaijan’s defense budget was worth only $175 million at the start of President Ilham Aliyev’s rule in 2004. It skyrocketed in the following years as the country reaped the benefits of its contracts signed with a BP-led oil consortium in the late 1990s. In 2011, Aliyev declared that Azerbaijani military spending has reached $3.1 billion, surpassing Armenia’s entire state budget worth $2.8 billion at the time. He has since repeatedly portrayed that as further proof of a “widening gap” between Azerbaijan and Armenia which will eventually allow his nation to regain control over Karabakh.

The actual level of that spending has been a matter of contention, however, and not just because Baku’s official defense budget figures have included funds allocated to not only the Azerbaijani army but also law-enforcement bodies.

Writing for the London-based Economist Intelligence Unit (EIU) last January, Emil Sanamyan, a Washington-based analyst, questioned the Aliyev administration’s claims that it spent $20 billion on defense from 2010 through 2015. Sanamyan argued that Azerbaijan reportedly purchased a combined $7 billion worth of weapons from its key suppliers -- Russia, Israel, Turkey and Belarus -- during that period. The Azertbaijani army is unlikely to have absorbed the remaining $13 billion, he said, pointing to its virtually unchanged size and the absence of sharp pay rises for Azerbaijani military personnel.

“Judging by itemized spending since 2011, Azerbaijan may have overstated its actual military spending by more than $1 billion annually so that this spending would appear larger than Armenia's budget,” said Sanamyan. He suggested that this was done for bullying the Armenians into offering more concessions to Baku on Karabakh.

At any rate, the collapse of the oil prices and the manat’s value against the U.S. dollar makes it extremely difficult for Baku to carry on with its military spending spree. The crisis has already translated into some embarrassing economic statistics for Aliyev: at less than $300 a month, the official average wage in Azerbaijan is now considerably lower than that in resource-poor Armenia. Azerbaijan has earned over $116 billion in oil revenues since 2001.

Armenia, whose 2016 defense budget is projected at 208 billion drams ($433 million), has sought to offset the Azerbaijani military buildup with close military ties with Russia, which have enabled it to receive large quantities of Russian-made weapons at discount prices or even for free.

Is it safe to say that's further devaluation, inevitable as they're all running to the banks, will decrease their dollar denominated budget from $10 billion to much less? This is going to be a great year for Armenia.

I decided to respond here since the discussion is bound to drift away form the military topic.

Even though they moved from a pegged currency to floating currency, it's obvious the government is still heavily intervening and for all intents and purpose it's still a pegged currency. http://www.xe.com/currencycharts/?from=USD&to=AZN

I think the fact that the military budget out of all things has been cut is a sign that things are getting really bad, much worse than we could have hoped for. No doubt, due to its actual practical importance, but more importantly its propaganda value, the military budget must have been one of the most untouchable items on their budget. The fact that they are cutting it, and cutting it so dramatically, is a sign that funds are extremely limited.

Like you mentioned, I think the fact that they have already done it twice leaves no faith in their currency and is bound to only increase pressure, even given the 55% devaluation over the past year.

At this point, we don't necessarily need their budget to drop further, though it's a very real and even likely possibility. At this point we need the overall economic situation to deteriorate to a point where people decide they've had enough and rise up, and some of revolution breaks out. Given the economic situation, the existence of suppressed minorities, Shiite fundamentalists, very very extremist Salafis, mass corruption, there is a perfect recipe for the emergence of some sort of Libyan like failed state to emerge.

You see ordinary people, even in the most corrupt and suppressed countries usually couldn't care less about political activism as long as they're busy working 50 hours a week, and can support their families. It's just not worth it. It's when people start having basic issues that they suddenly think their situation is screwed. And Azerbaijan is as screwed as it gets. So that's why I think this is a real possibility.

There's already going to be very massive inflation. That itself is gonna introduce all sorts of problems.

Beyond that, a big part of Azerbaijan's economy was government supported artificial jobs in construction and such. With the budget cut dramatically, there's going to be a lot of layoffs, in addition to the many that has already taken place in energy and construction this year.

http://www.skyscrapercity.com/showthread.php?t=1460137&page=52

That's going to be thousands, tens of thousands of very frustrated people

government subsidies have already been decreased on energy in an effort to boost funds, and its bound to decrease across the board, leading to further financial issues.


The big wildcard here is what is the real situation with their state oil fund which stood at $37 billion at the start of the year. According to their official records, the fund has decreased by less than $3 billion this year. Already before this, I had a lot of trouble believing these numbers, because it doesn't take very complex level of mathematics to have realized that given a ~$23 billion budget for 2015, when 75% of your revenue comes from energy resources, and your profits from said energy resources have dropped by 70-80%, that you are going to need to spend a solid 10-15 billion a year to make up the shortfall. But now its blatantly obvious that the fund must be a lot lower if they are introducing mass hysteria and economic collapse to their country. They certainly wouldn't be doing it if they had $34 billion stashed away. Not unless they had a death wish. But anyway, this fund is the wild card, because if that money does exist, at least to some significant extent even if not at $34 billion, then we won't see the total collapse we are hoping for

http://www.oilfund.az/index.php?page=hesabat-arxivi&hl=en_US

http://www.oilfund.az/en_US/hesabat-arxivi/rublukh/2015_1/2015_1_3/

I think though, the bottom line, there is no easy way out for Azerbaijan

First and foremost, I predicted this would happen years ago, not because I knew oil prices would drop, but simply because their oil is running out. So even if magically prices rose up back to $100/barrel, this is just gonna delay inevitable.

But the thing is, every forecast predicts oil at $40-45 average for next year. The prices are staying where they are. the Iranian nuclear deal has yet to be executed as far as energy sanctions. Iranian oil will only return to the market in the spring. That's bound to worsen (or improve as far we're concerned) the situation. That combined with the Syrian/Iraq oil that is bound to return as ISIS collapses, as well as the Libyan oil, is bound to at worse keep prices where they are, or even lower them

[londontsi]

Re: Energy in Azerbaijan

Fighters still battle Guneshli platform fire, none missing people found

http://www.azernews.az/azerbaijan/91084.html

By Amina Nazarli

Azerbaijan’s Emergency Situations Ministry is continuing liquidation of the accident, which occurred on SOCAR' platform on December 4, because of heavy storm in the Caspian Sea.

So far, firefighters of the Ministry extinguished the fire at two oil wells on the platform #10.

A fire broke out on the platform №10 of Azerbaijan’s offshore Guneshli field, after an underwater high-pressure gas pipeline was damaged in strong storm. Out of 63 people who were on platform at the moment of accident only 33 were rescued, while 23 are still regarded missing with seven dead.

Currently, “Whirlwind-5” vessel is extinguishing the fire on the platform. A squadron, forces of Special Risk Rescue Service and the State Water Rescue Service of the Ministry continue the search for the missing oil workers.

Searches is conducted by the ships and helicopters, as well as aircraft and divers.

[londontsi]

Re: Energy in Azerbaijan

The second part of the video shows the platform on fire.

It appears the platform is a write off.

[Shant03]

Re: Energy in Azerbaijan

The second part of the video shows the platform on fire.

It appears the platform is a write off.

[Artashes]

Re: Energy in Azerbaijan

Poor design, poor construction, and poor operating procedure. Nothing professional nor even close.
Everything I've seen so far regarding response is completly non professional. A sad joke. The response literally has no merit.

[Artashes]

Re: Energy in Azerbaijan

At the bottom of the sea where the hole that was drilled into the sea floor is, there should be a large valve that is pressure sensitive. If the raw hydrocarbon fluid exceeds a predetermined rate of flow, this valve should automatically close. This valve is by American standards only one of several valves and ways the flow can be stopped for any reason, including emergencys. It is that valve that was improperly installed that caused the gulf spill in the Louisiana catastrophe.
Those valves are extremely expensive and even more expensive to install.
The fire you see is from fuel comming straight out of the ground unimpeded except for pipe diameter.
They have --- NO --- control of that flow of fuel.
They're fkd.
PS.. I betcha there is no valve on the sea floor.

[Eddo211]

Re: Energy in Azerbaijan

Poor design, poor construction, and poor operating procedure. Nothing professional nor even close.
Everything I've seen so far regarding response is completly non professional. A sad joke. The response literally has no merit.

No matter how much you train them, give them state of the art equipment, divers.......when the sh!t hits the fan their instincts kick in and they start running around like baboons.

Scared divers, useless fire fighting on the platform, no plan of action, lost in what to do, help help help is what they need of just let it burn burn baby burn.