TotalEnergies reminds Baku of its interest in the Caspian Sea
After he learned that Azerbaijan had signed a new gas swap agreement with its Caspian Sea neighbours, Turkmenistan and Iran, Arnaud Breuillac, special adviser to TotalEnergies chairman and chief executive Patrick Pouyanné, paid a visit to Azerbaijani president Ilham Aliyev on 7 December. In the course of his short visit, Breuillac, a former head of the French oil group's exploration and production department, also had a meeting with Rovnag Abdullayev, head of Azerbaijani national oil and gas company SOCAR. He reminded the authorities in Baku that TotalEnergies wants to speed up the start of production on the Absheron offshore gas and condensates field, on which it has been an operator alongside SOCAR since development was launched in 2016. He also indicated that the group wanted to invest further in the Azerbaijani energy sector.
Improved prospects
TotalEnergies has little activity in Azerbaijan apart from Absheron but this situation could change rapidly, particularly after the gas swap agreement the country signed with Turkmenistan and Iran, which provides for gas from Turkmenistan to be transported to the country's border with Iran and for an equivalent volume of Iranian gas to be sent to Iran's border with Azerbaijan. The revival of economic relations between the three countries, which comes after a period marked by frequent disagreements, particularly between Azerbaijan and Iran, comes after an effort by Azerbaijan and Turkmenistan to stabilise relations via an outline agreement signed in January on the disputed Dostluk oil field.
At one point, TotalEnergies interests in the Caspian extended to most of the countries on its shores. They included Iran's South Pars gas field, from which the oil group withdrew in August 2018 because of the threat of US sanctions, and the aborted Nabucco gas pipeline project, which was supposed to bring gas from the Caspian Sea to Europe without going through Russia. Former Total chairman and chief executive Christophe de Margerie visited Turkmenistan in 2012 to discuss the project. Moreover, TotalEnergies still has a 5% stake in BTC Co, the company which owns the BTC oil pipeline which links Baku to the Mediterranean Sea.
French non gratae
TotalEnergies needs to find its way, however, in a business climate in Baku which has become more hostile to French companies since the Nagorno-Karabakh war between Azerbaijan and Armenia. President Aliyev, who had already been unhappy with Emmanuel Macron's foreign policy stance, took the view that France had sided with Armenia in the war. Since then, no French group in any of the key economic sectors has signed any contract of any size with Aerbaijan.
