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Rovshan Ibrahimov
Editor of USAK Energy Review |
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Sunday, 21 March 2010
Germany gas company RWE (Rheinisch-Westfalisches Elektrizitatswerk AG), is a partner in a consortium to build the Nabucco gas pipeline. Initially, Nabucco was planned to be a pipeline to transport gas from Central Asia, but a number of reasons delayed this possibility.
It should be noted that RWE, as well as other members of the Nabucco consortium, does not have enough experience in participating in international projects of this kind. Despite the fact that RWE is a major distributor of gas and electricity in European countries and even has some 20 million users of its services, this company hopes to become a major transnational company following the successful implementation of the Nabucco project.
It is worth noting that established in 1898 RWE,, is the second largest energy company in Germany. However, till now, no companies from Germany have participated in the development of any field in the Caspian region. The German companies did not participate in consortiums, which were created in early 90-ies in Kazakhstan and Azerbaijan to develop the hydrocarbon fields. It can be related to the fact that, historically, the German companies have not been very actively involved in the development of energy resources in some parts of the world. And perhaps the post-Soviet countries’ regions are also not the exception. However, since 2000, we have witnessed how many national oil companies are actively involved in international projects. It is also due to the fact that countries that do not possess adequate resources of hydrocarbons directly want to ensure their stable supply through the development of deposits in different parts of the world.
After RWE joined the consortium for the construction of Nabucco, this company, in addition to the Austrian company OMW, opened an office in Baku in order to get in touch with officials in Azerbaijan. After the opening of the Shah Deniz gas field, it became clear that Azerbaijan would become one of the main suppliers of gas for Nabucco. In addition, RWE via Baku planned to create cooperation with Turkmenistan, which subsequently happened. As can be seen, RWE is not limited to the role of a member of the Nabucco consortium, but also actively participates in the region to establish contacts with representatives of the countries of the Caspian basin. For example, RWE was one of the first Western companies to sign a contract with the Government of Turkmenistan for the development of offshore fields in the Caspian Sea. It is worth noting that this fact, in the case of a successful project implementation, will enable RWE to become a producer of gas in the region. The RWE Company is also actively in contact with officials of Azerbaijan and Turkmenistan. As a result, on 10 March 2010 SOCAR and RWE signed a memorandum of understanding for the prospective gas structure "Nakhchivan", located in the Azerbaijani sector of the Caspian Sea. This memorandum provides conditions for RWE to begin preparations during the year for the signing of the PSA-type contract. It is assumed that the "Nakhchivan" deposit is about 300 billion cubic meters of gas and about 40 million tons of condensate. By signing this agreement, RWE assures its participation in the exploitation of hydrocarbon deposits in Azerbaijan, which in itself is a significant event.
The signing of this memorandum is of practical importance. The contracts signed in Ashgabat and Baku state that RWE will participate directly in the possible deliveries of natural gas to Nabucco. As a member of the consortium, RWE may increase the possibility of this project being realized.
It is worth noting that the German government is also interested in how to support its company’s involvement in the exploitation of deposits in the region. It is no accident that Turkmen President Berdymuhamedov visited Germany in November 2008, although Germany has refused to accept the Turkmen president for the past year due to the human rights situation in that country. The participation of German companies in mining was a widely discussed topic during the visit of the Azerbaijani President to Germany.
However, Germany and German companies are still not actively involved in projects in the region. For comparison, neighboring France is very active in the region and has long been implementing projects in Azerbaijan. In addition, President Sarkozy visited Kazakhstan and signed contracts worth over $6 billion USD, and Berdymuhamedov visited Paris, where the parties stipulated the possibility of cooperation in the energy sector. No doubt, greater participation by RWE in the region would require more active support of the German government. Experience shows that the implementation of energy projects in the region and government support of its companies plays a key role in the successful development of cooperation.
