TBY talks to the directors of two top services companies on the state of the sector, environmental challenges, and outlooks on the future.
What is the background of your company?
RAMIL ALIYEV The idea was to protect the environment and save the ecological balance, as well as to research appropriate solutions to environmental challenges, as has become the crucial issue all over the world. Basically, we identify proper solutions for environmental issues and work toward reducing them. The State Oil Company of Azerbaijan Republic (SOCAR), in the frame of its duties and responsibilities, has pointed out the importance of inviting foreign investors and creating modern ventures. As a result, in 2006 Ekol Engineering Services was established by its two shareholders: SOCAR, with a 51% share, and Lancer Services, with a 49% share. In a short amount of time the company has proved itself as a successful entity in the environmental sphere. After the President’s announcement that 2010 would be the “Year of Ecology”, there was an increase in the number of environmental projects implemented.
ILHAM BABAYEV A branch office was opened in Azerbaijan in September 2007. The main activities of the company are the drilling of oil and gas wells, well work-over repairs, services for well drilling, enhancement technologies application, prospecting, exploration, and so forth. All of our activities in onshore oil and gas fields are based on state-of-the-art technology.
What are some of the key environmental challenges Azerbaijan is facing, and how does your company seek to provide solutions?
RA The environment is one of the most crucial issues in the world and Azerbaijan in the 21st century. For more than 160 years Azerbaijan has been a significant country for oil production. Despite such a long tradition in the oil and gas sector, environmental protection issues have remained unsolved. In one of the country’s biggest environmental catastrophes, 33,000 hectares of land were contaminated on the Absheron peninsula as a result of non-stop oil and gas operations, resulting in the land becoming unfit for use and the formation of hundreds of artificial lakes. In September 2006, the President decreed a new ecological position in the country through a program known as the “Complex Works Plan for the Improvement of Azerbaijan’s Position 2006-2010”. In the framework of this important state document all appropriate organizations as well as SOCAR began the realization of required projects, and for the last four years a large number of environmental issues have been solved. In 2006 the treatment of oil-contaminated lands was a main point of activity for SOCAR, and as a result of that Ekol Engineering Services became an operational company to successfully perform the aforementioned activities. The key environmental challenge that Azerbaijan is facing at present is oil-contaminated lands, and as a solution we consider it important to provide treatment to these lands and establish green areas in rehabilitated regions.
What is the potential for cooperation between Azerbaijan and oil and gas producers in the Gulf?
IB Being part of the Islamic world and sharing the progressive heritage and spiritual values of Islamic civilization, Azerbaijan, since recovering its independence, has attached great importance to developing relations with the Islamic countries of the world in general and those of the Gulf states in particular. In addition, this interest in closer ties has been fully reciprocated by states in the Gulf. Oil and gas producers there have experience in using innovating technology in the drilling of oil and gas wells, and this has worked in favor of Azerbaijan in the context of oil and gas sector cooperation, and this close relationship is set to continue.
Do you have any plans to expand your activities outside of Azerbaijan?
RA Ekol Engineering Services keeps in focus the establishment and development of foreign relationships and constantly looks to expand its activity outside of the country. We have already created wide cooperation and business relations with a number of companies in a variety of places from Uzbekistan to Germany and Switzerland, and several other companies from around the world. We have also created business relations with foreign companies acting in Azerbaijan, namely BP Exploration, which is operating in the Caspian Sea, and AA services (AAS), a Dutch company that won a tender announced by BP for waste management provision services. In this regard, a joint venture was established entitled AAS-Ekol. This company currently implements waste management projects for BP and Total.
Do you see the potential for Azerbaijan to become a more significant hub for oil and gas exports from other CIS countries?
IB Together with strong government policy and the current rate of development in the oil and gas sector, Azerbaijan is set to play a leading role among the CIS countries.
What is your general outlook for the company and the Azerbaijani oil and gas sector in 2011?
RA My outlook for the future of the company is very progressive, because since we were established we have always moved towards the continuous development of foreign business relations, increasing the material and technical base, and improving our operational potential by involving highly specialized employees. As an operating company of SOCAR, we will continue to implement our global mission of improving the country’s ecological position and succeed in reducing the negative environmental impact on human health, both inside and outside of Azerbaijan
IB Our company works with the Azgerneft and Surakhani operating companies, and we took part in the Global Energy and SOCAR tenders. Aside from this we work with contractors such as Halliburton, Azeri-MI, and Gatewall. In this context we use the latest technologies for the exploitation of oil and gas wells. The future of the sector will be built using state-of-the-art technology, and I fully expect the sector to continue its strong performance throughout 2011.
© The Business Year