Azerbaijani oil and gas projects proved their worth worldwide long ago. The investments are repaid there. Azerbaijan is a very reliable partner fulfilling its commitments. This has been once again clearly confirmed this week.

Azerbaijan’s investment potential for British oil and gas companies was estimated at $ 17 billion at the briefing with the UK Trade and Investment Agency. The agency expects to increase the volume of investments in the oil and gas sector of Azerbaijan.

This is not surprising given that the British BP is the largest foreign investor in Azerbaijan`s oil and gas sector and the operator of the largest deposits of the country. Moreover, BP together with SOCAR is involved in the implementation of major energy projects.

There is another interesting point. Oil & Gas UK’s report was published on the same day. According to it, the investments in the British North Sea oil and gas projects will be reduced by 80 percent by 2017. In particular, the document states that the current investments in the amount of 14.8 billion pounds will annually decline from 2 to 4 billion pounds.

Of course, such a cost reduction is due to the prolonged fall in oil prices. The crisis of the sector forces all the companies to cut spending on both exploration and extraction of energy carriers, approach to investing in any projects in a more meticulous and selective way.

In this situation, one can conclude that British companies make a choice in favor of Azerbaijan by reducing investments in exploration and production in the North Sea and increasing them in exploration and production in the Caspian Sea.

The reasons for this decision are quite clear. In recent years, oil production in the British sector of the North Sea was strongly reduced. In 2014, it amounted to 1.42 million barrels per day. It amounts to a 70 percent decrease in comparison with the peak in 1999. At the same time, operating costs are also growing fast. The matter is that the cost of oil extraction in the North Sea is one of the highest in the world. This is due to the need to build oil platforms and use expensive equipment.

At the same time, the cost of oil production in the Caspian Sea is lower, while Azeri Light oil is more expensive than the Brent reference North Sea blend.

Such a turn of the British oil and gas investors in the direction of Azerbaijan is not accidental and is due to both economic and practical reasons. This once again proves the importance and prospects of projects carried out by Azerbaijan.

More about: