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Official Baku is ready to engage in other energy projects of mutual interest, Azerbaijani Foreign Minister Elmar Mammadyarov said at the Caspian Business Forum in the U.S.
The minister underscored that for last three decades Azerbaijan has been a reliable and credible partner of the U.S. in the region, including the strategic engagement in the fields of energy security, fight against terrorism and transnational threats.
“Azerbaijan as a natural bridge between Asia and Europe is a key country providing U.S. connectivity to Central Asia and Afghanistan, as well as the largest trade partner of the U.S. in the South Caucasus. In 2018, our bilateral trade exceeded $860m – 10-percent increase from the previous year.
Up to date the U.S. has invested over $10bn in Azerbaijan’s economy. The Azerbaijani State Oil Fund (SOFAZ) has invested over $8bn in U.S. markets, including in fixed income, equities and real estate. Over 250 American companies were registered and well-organized in Azerbaijan. Major American construction and operation companies, contractors, service providers and investors have been largely involved in majority of large and medium-sized projects in Azerbaijan since independence,” Mammadyarov said.
According to the minister, since gaining independence Azerbaijan established itself as a reliable and committed partner contributing to pan-European energy security and beyond.
“Last week marked the 25th anniversary of the Contract of the Century – agreement to explore and develop giant Azari-Ciraq-Gunasli (ACG) oil field in the Caspian Sea, agreement which has transformed Azerbaijan’s economy for past decades. Major U.S. oil companies among other Western majors were part of the initial consortium for production sharing under the Contract of the Century. The new contract on the extension of ACG till 2049 signed in 2017. As part of the contract, U.S. companies Chevron and Exxon got over 16 percent of shares in ACG Consortia,” he said.
“Although the U.S. is not part of the Southern Gas Corridor, strong partnership with the U.S. and latter’s support has been critical in the context of diversifying energy routes and strengthening energy security of Europe. Diplomatic efforts of the U.S. and involvement of American companies, which contributed to the completion of Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum pipelines, remain vital for the success of SGC as well.
The U.S.-sourced materials, U.S. employees and contractors are materially and deeply woven into the construction, development and operation of these projects in Azerbaijan and Europe – including over 20 major third-party contractors (e.g. Baker Hughes, Bechtel, Cameron, Emerson, GE, KBR, Schlumberger and Siemens) with contracts totaling over $2 billion,” he added.
“President Donald Trump in his letters reiterated America’s continuous support for the SGC. It is imperative to note that U.S. government has strongly supported the Southern Gas Corridor across multiple administrations. As the SGC nears completion, we are ready to engage in other energy connectivity projects of mutual interest,” the minister said.
“The fourth meeting of the U.S.-Azerbaijan Economic Partnership Commission convened this May in Baku focused on strengthening and deepening our dialogue in areas of mutual interest, including, trade and investment, transport and logistics, agriculture, food safety, and tourism. Today, transportation routes from Central Asia through the Caspian Sea and further through the Caucasus are becoming particularly relevant,” said the minster.
“Azerbaijan today is an active participant in regional and trans-regional connectivity initiatives, including the development of main transport links and strategic infrastructure, establishment of international logistics centers and free trade zones for the development of transportation of passengers and goods between different regions of Eurasia. The Baku-Tbilisi-Kars railway connects Azerbaijan, Georgia, and Turkey, establishing a freight and passenger link between Europe and China,” he added.
“Physical interconnection of rail road is not self-sufficient, and in order to render it commercially viable we are currently working on tariffs unification. BTK is a part of the Trans-Caspian International Transport Route, a corridor of 6,500 km that links Asia with Europe and passes through countries including Azerbaijan, Georgia, Kazakhstan, and Turkey. These transport links are of great importance for landlocked Central Asia, as well as the South Caucasus region. First container trains proved that this route can reduce transit period from 30-35 days to 15 days. The Trans-Caspian corridor will create additional opportunities in investment, trade and transit for enhanced private sector engagement,” he added.
“In recent years our government has been focusing on targeted reforms related to improving business environment, including, limited price control, setting no limits on amount of foreign capital in companies, lifting restrictions on repatriation of profits and technology transfer, no discrimination between foreign and domestic investor, no foreign exchange restrictions and no prior authorization of foreign investment. All inspections in the field of entrepreneurship have been suspended at the legislative level till 2021. Thanks to active macroeconomic policies the economy has stabilized in 2017-2019,” Mammadyarov said.
“In 2018 Azerbaijan ranked 35th in the Global Competitiveness Report and 25th in World Bank`s 2019 Doing Business Report, including 9th for starting business and 2nd in the World for investor protection. Improved business and investment climate in Azerbaijan opens new opportunities for U.S.-Azerbaijan B2B ties,” he noted.
“Azerbaijan has also scored high in the Heritage Foundation’s flagship report – “Index of Economic Freedom 2019”. The report marked Azerbaijan as a most improved country in ‘Rule of Law’ category since the introduction of an Index in 1995. Azerbaijan saw a sharp rise in property rights, investment freedom and fiscal health,” Mammadyarov said.
Economic diversification and the development of the non-oil sector are key long-term goals of our government. Strategic roadmaps for development of national economy will further deepen the economic reforms. In order to build on those reforms and increase the competitiveness and sustainability of the economy, the next phase has begun to develop a deeper economic reform program for 2021-2025. Overall favorable business environment and targeted reforms will provide additional opportunities for the businesses and investors,” the minister added.
“Finally, I would like to highlight important role of the U.S.-Azerbaijan Chamber of Commerce (USACC) and American Chamber of Commerce in Azerbaijan (AmCham) in facilitating commercial links between the countries, both in energy and non-oil sector,” he concluded.