Transneft and SOCAR: less is more
SOCAR thinks that reduction of oil transportation via the Baku-Novorossiysk oil pipelines was mainly connected with high tariffs for raw material pumping. Alternative routes of Azerbaijani oil export – through Georgia and Turkey – are more profitable. Taking into account the fact that SOCAR didn’t fulfill contract terms concerning volumes of oil transportation, it was decided to terminate the contract. Less than 2 million tons of oil per year were transported via the pipeline instead of 5 million tons. In 2013, the order made up only 1.6 million tons. As a representative of SOCAR noted, in the current year after conclusion of a new contract about 1-1.5 million tons of oil are planned to be transported via the oil pipeline.
On the whole, the situation with cooperation of SOCAR and Transneft is mixed. It will be attended with difficulties in the future too. The Russian party must get profitable operation of the pipeline; particularly, Azerbaijani partners must adhere to an obligation to fill the pipeline. That’s why Transneft demanded for guarantees on maximally admissible volume of Azerbaijani oil transportation. Perhaps, it could reach it during the recent agreements between the companies.
The pipeline is on the hop in comparison with the Baku-Tbilisi-Ceyhan pipeline, for example. First, tariff for oil pumping through the latter is several times less, than the Transneft’s tariff. Second, Azerbaijani oil, which is transported through the Baku-Novorossiysk pipeline, mixes with Russian one, which is less quality and this reduces its value.
