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In the News

Azerbaijan and Energy Security on Labour Conference Agenda

The European Azerbaijan Society

September 29, 2011

On 26 September, Labour Party Conference delegates in Liverpool attended a fringe debate entitled Russia, Azerbaijan and the West: what does the New Great Game mean for Europe’s energy security?, organised by The European Azerbaijan Society (TEAS), in association with Progress. The panel comprised Wayne David MP, Shadow Minister for Europe; Richard Howitt MEP; Charles Grant, Director, Centre for European Reform; and Dennis Sammut OBE, Executive Director, LINKS. The Chairman was Mike Gapes MP.

According to Mr David, the UK remains the largest foreign investor in Azerbaijan, largely due to the BP investment of $23bn (£14.8bn) in the country since 1994. He revealed that the UK government had repeatedly acknowledged the importance of Azerbaijan to the UK economy. Mr David went on to explain the Western European requirement for energy security, and expressed the hope that the Southern Energy Corridor, bringing Caspian resources to Western Europe, would receive UK support for its construction. Mr David also stressed his backing for the OSCE Minsk Group, tasked with achieving peaceful resolution of the ongoing Armenian–Azerbaijani Conflict over the Azerbaijani territory of Nagorno-Karabakh and the seven adjacent regions.

He stated that Azerbaijan could still progress, and added that the EU European Neighbourhood Programme had only been partially successful in the country.

Mike Gapes observed that Baku had rapidly developed since the advent of the second oil boom in 1994, and that the country had to ensure the income from oil and gas resources was invested to achieve future economic diversification. Mr Gapes went on to cite the Norwegian Model, as that country had sought to invest its income from the extractive industries in a sustainable manner.

Richard Howitt revealed that 80 per cent of Armenian energy infrastructure was Russian-owned, whereas Azerbaijan has a reputation for stability and a strong relationship with the EU. He went on to ask if the EU was ready to meet the challenge of creating an integrated energy policy.

Dennis Sammut explained that Azerbaijan still had to decide its strategy regarding organisation of its energy future. He revealed that, since the inception of the second oil boom, a decision had been made regarding collaboration with the West, as opposed to Russia, regarding exploitation of its natural resources. He said that it was important to understand that the Baku–Tbilisi–Ceyhan (BTC) pipeline had been constructed by the BP-led Azerbaijan International Operating Consortium (AIOC) to transport Caspian resources.

Mr Sammut went on to comment that Azerbaijani success had been achieved and good relations with Russia had been maintained. He referred to last week’s news that the EU was aiming to ratify an agreement with Azerbaijan and Turkmenistan to construct a new Trans-Caspian pipeline.

He also renewed calls for a peaceful and just resolution to the Nagorno-Karabakh conflict, requesting that the EU should increase pressure on Armenia to withdraw its troops from Azerbaijani territory. Mr Sammut acknowledged that Azerbaijan remains a well-organised country, having derived sufficient profits from the energy sector to achieve progress. He concluded that the EU has an unique opportunity to take the relationship with Azerbaijan to the next level, and reported that Total had found enormous resources of gas in the Caspian Sea, necessitating further EU engagement with Azerbaijan.

During a lively question-and-answer session, Mr Sammut expressed his hope that a unified EU would speak with one voice during negotiations with Azerbaijan on the proposed Trans-Caspian pipeline.

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