Jonas Gahre: Norway’s Ambition is to Further Develop the Engagement of Norwegian Companies in the Caspian Basin

Jonas Gahre: Norway’s Ambition is to Further Develop the Engagement of Norwegian Companies in the Caspian Basin

By Rovshan Pashazadeh

Interview with Minister of Foreign, Jonas Gahr Store

AT: In June this year Crown Prince Haakon visited Azerbaijan and was received by President Ilham Aliyev. What is your assessment of the meeting for the development of the mutual relations between the two countries?

The visit of the Crown Prince was successful, and will strengthen our bilateral relations. The Crown Prince was accompanied by the Minister of Oil and Petroleum, the Deputy Minister of Foreign Affairs, senior officials as well as a business delegation. Throughout a range of meetings, including in the one you mention with the President, a wide array of questions were discussed, bilateral, regional and international. Azerbaijan is a valuable and interesting interlocutor.

AT: The Norwegian Statoil company came to Azerbaijan a short time after the establishment of the diplomatic relations between Norway and Azerbaijan in 1992. To put it differently, the diplomatic relations were boosted by economic relations. Later Statoil implemented a number of successful projects in the Azerbaijani sector of the Caspian Sea and further deepened the ties. In your opinion, what other factors apart from oil and gas can unite the two oil and gas countries – Norway and Azerbaijan –which are geographically far away from one another?

In later years, we have developed our bilateral relationship in many sectors, for instance in education and culture. There are also important opportunities for furthering economic ties between our countries. In this respect, we hope to see Azerbaijan as a member of the World Trade Organization as soon as possible.

From our side we will work to expand and diversify our co-operation in the energy sector. As an example, Norway is co-funding a UNDP project targeting Azerbaijan’s potential in hydro power. We believe that renewable energy is interesting as a potential field for co-operation, not only for the obvious environmental benefits, but also as a platform for further economic development.

We also cooperate with Azerbaijan within multilateral organisations. Norway, like Azerbaijan, has committed itself to the same high standards in a number of important fields as members of the Organization for Security and Co-operation in Europe (OSCE) and the Council of Europe. We believe that abiding by these standards requires us to co-operate and maintain an open and frank exchange of views. Azerbaijan’s support for the ISAF-operation in Afghanistan, where Norway is also actively involved, is another important example of joint interests and sharing of responsibility.

AT:Does Norway have a 10-year strategy with regard to the Caspian Sea basin? We mentioned that Norwegian companies are very active in Azerbaijan. What about the southern shore of the Caspian? Or, in the northern sector? To what direction can the situation change? Can Norway be also actively involved in the energy sector in those regions?

Norway’s ambition is to further develop the engagement of Norwegian companies in the Caspian basin. Apart from in Azerbaijan, Norwegian companies are also active in Kazakhstan. Further involvement of Norwegian companies in the Caspian region would be very welcome, both in the energy sector and beyond. That said, Norwegian authorities do not interfere in the decision making processes of private companies. We can and will assist and advise private companies in foreign markets, but the initiative and the business evaluation will have to come from their side.

AT: Mr Minister, in late September, the North Stream gas pipeline to ship Russian gas directly to Germany along the Baltic seabed will be inaugurated. In three years, the gas pipeline will be able to pump 55bn cubic metres of gas under the projected capacity. Russian gas will enter British market after reaching Netherlands. In your opinion, will again Gazprom be the powerful player in Norway’s gas market in Europe in the next five years? The Kremlin has greenlighted to Statoil to expand operations in Russia. Does this mean that Norway and Russia have decided to cooperate in the world gas market?

Norway and Russia are strategic partners in promoting gas as a reliable energy source. In general terms we are also competing in the same markets. This is positive. But, we are also complementing each other in key European markets, as for example in Germany. By promoting gas as a competitive energy commodity, within stable and transparent contract conditions and well functioning delivery systems we hope that gas can strengthen its relative weight in Europe’s energy mix. Norwegian companies are present in Russia and we cooperate with Russia in many areas of interest, but we do not cooperate on market issues.

AT: The energy security issue of the European Union has been on the agenda for a long time. However, regrettably, no decisive steps have been made to this end up until now. That is to say, no new infrastructure projects have been implemented in new markets. In your opinion, to what extent is it correct to consider it merely a business project?

Norway is a strong partner on energy security with the European Union. Undoubtedly, the Caspian region has the potential of becoming an important external supplier of energy for Europe. How new energy projects should be implemented, if at all, is a matter for the relevant business partners and the host countries to address. However, it is also important to look beyond the pure business side, namely how energy resources can be used in an efficient manner compatible with the goals of sustainable development and modernisation in the host countries. This is a political question which probably should lie at the foundation of any commercial project in the region.

AT: Could you please share with our readers figures of Norway’s investment in the Azerbaijani economy and those in the energy sector in particular?

Norwegian companies have invested substantially in Azerbaijan since its independence.

The total figure so far amounts to some USD 5 billion, first and foremost in the oil and gas sector. Norwegian companies report that they have excellent cooperation with their local partners.

AT: Norway has been active in the Caspian Sea region since 1990s of XX century and its oil and gas companies were in all Caspian littoral states. However, later they concentrated in Azerbaijan and as of now Baku is the capital of their operations in the Caspian Sea. In you view, is it high time for you to expand your activities again?

Norwegian companies continue to be interested in exploration, development and production of hydrocarbons from the Caspian Sea. We support increased involvement by Norwegian companies in Azerbaijan, but also in the wider region.

AT: In such a uniquely energy-rich country, Norwegian governments have been able to present a positive environmentally friendly image, and Norway managed to generate power for its 4.9 million people through non-polluting mechanisms. At the same time, the country exports large quantities of oil and gas. What are the governing principles and policies that Norway is committed to in order preserve these high environmental standards?

More than 60 % of Norway’s energy consumption is from renewable resources, primarily hydro power. About 90 % of our oil and gas production is exported. We will continue to be an exporter of energy for a long time and we are committed to maintaining high environmental and technical standards along the whole cycle of exploration, development, production and transport. Another important factor is close cooperation with the European Union, and with authorities and companies in the countries bordering Norway.