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Azerbaijan Strengthens Economic Ties with Turkmenistan, SOCAR Opens Office in Ashgabat

By Nigar Bayramli November 30, 2023

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Azerbaijan’s Economy Minister Mikayil Jabbarov and President of Azerbaijan’s State Oil Company (SOCAR) Rovshan Najaf took part in the inauguration of SOCAR’s representative office in Ashgabat on November 28, 2023. / News Central Asia

The high-ranking Azerbaijani delegation has recently engaged in discussions on economic and energy cooperation with Turkmen officials. Simultaneously, Azerbaijan’s energy giant, SOCAR, has announced the opening of its office in Ashgabat.

Azerbaijan’s Economy Minister, Mikayil Jabbarov, and President of Azerbaijan’s State Oil Company (SOCAR), Rovshan Najaf, participated in the inauguration of SOCAR’s representative office in Ashgabat on November 28, as reported by News Central Asia.

During their working visit to Ashgabat, Jabbarov and Najaf met with Deputy Chairman of the Cabinet of Ministers for the Oil and Gas Sector, Batyr Amanov. The discussions encompassed the current state of energy exchange cooperation, joint exploration of hydrocarbon resources at the Dostlug field, and the potential participation of SOCAR in Turkmenistan’s field development.

Regarding the inauguration of SOCAR’s representative office, Minister Jabbarov wrote on his official page, “This signifies our confidence in the long-term collaboration with Turkmenistan, anticipating mutual benefits in the energy sector for both countries.”

Furthermore, Minister Jabbarov met with Turkmen Foreign Minister Rashid Meredow. During this meeting, they underscored the significant role of high-level meetings and negotiations in strengthening political and diplomatic dialogues. They also emphasized the necessity of exploring new forms of partnership and expressed readiness to take further steps to expand trade relations.

The ministers focused on interaction in the fuel and energy sector, exchanged views on the current status of Turkmen gas and electricity supplies to Azerbaijan, and explored ways to enhance regular cargo transportation through various modes of transport to establish transport and transit hubs. They highlighted the importance of leveraging seaport capabilities.

At the 7th meeting of the Intergovernmental Turkmen-Azerbaijani Commission on Economic Cooperation held on November 28, both sides agreed to intensify cooperation in energy, oil and gas sectors, chemical industry, transport and communications, agriculture and food industry, environmental protection, urban planning and architecture, as well as in the humanitarian sphere.

Participants acknowledged the advanced level of cooperation in the gas industry between state concern Turkmengas and SOCAR.

On the same day, Turkmenistan’s President Serdar Berdimuhamedow expressed at a meeting with the Azerbaijani economy minister, “Turkmenistan attaches great importance to the expansion and deepening of the multifaceted partnership with the Republic of Azerbaijan.” The president called for strengthening the role of the Intergovernmental Turkmen-Azerbaijani Commission as a coordinating body for enhancing relations in various spheres.

The discussions included cooperation in energy supplies, expanding trade relations through seaport potential utilization, intensifying cargo transportation across the Caspian Sea, establishing transport corridors connecting multiple countries, and enhancing interaction in the field of communications.

The volume of trade turnover between Azerbaijan and Turkmenistan for January-October 2023 increased by 88 per cent compared to the same period in 2022, and for the last two years — almost 10 times.

In July 2021, Azerbaijani and Turkmen ministers agreed to further cooperate on the Dostlug (“Friendship” in Turkic) offshore oil and gas field in the Caspian Sea. Joint development of the Dostlug offshore oil and gas field by Turkmenistan and Azerbaijan could facilitate gas export to European countries if the Trans-Caspian underwater gas pipeline is built. In such a scenario, the pipeline could connect to the Southern Gas Corridor linking Azerbaijan with EU countries through Georgia and Türkiye.

Currently, the European Union intends to expand cooperation with oil and gas-producing countries, particularly Azerbaijan, Kazakhstan, and Turkmenistan, to supply energy resources to the EU.

Turkmen Deputy Prime Minister Shakhym Abdrakhmanov stated on November 1 that his country will not abandon the project to build a Trans-Caspian pipeline to supply gas to Europe. The pipeline project envisions supplying up to 30 billion cubic meters (bcm) of Turkmen gas annually through Azerbaijan, Georgia, and Türkiye to the European market for at least 30 years.

In early June, Iran and Azerbaijan reportedly signed an agreement to double the volume of gas swap between the two countries and Turkmenistan. As per the gas swap agreement signed on November 28, 2021, Iran annually delivers 1.5 to 2 bcm of Turkmen gas to Azerbaijan. From January 3, 2022, supplies of 5-6 million cubic meters (mcm) of gas per day commenced as part of the deal. Iran receives Turkmen gas in the east of the country and further delivers an equivalent amount to Azerbaijan.