The Business Year

Murad Sadikhov

AZERBAIJAN - Energy & Mining

Upstairs, Downstairs

General Manager, Nobel Oil

Bio

Murad Sadikhov’s career began at the Institute of Physics at the Academy of Science of Azerbaijan in 1990. He then worked as Chief Economist of the Project Evaluation Unit and at the Department of External Resources and Foreign Investment at the Ministry of Economy. He has also worked as a Consultant at the Private Sector Development Network, the Economic Development Institute of the World Bank, UNDP, and the Mitsubishi Corporation. Since 2003, he has had several executive positions at companies such as Mitsubishi Corporation, BP AzSPU, and NORM LLC.

What is the history of Nobel Oil in Azerbaijan? Nobel Oil started its activity in Azerbaijan in 2005 as an engineering and services company. The company’s main focus was in […]

What is the history of Nobel Oil in Azerbaijan?

Nobel Oil started its activity in Azerbaijan in 2005 as an engineering and services company. The company’s main focus was in the oil and gas production services area, having entered the market offering services relating to the rehabilitation of old fields and work on oil wells. Later, we expanded our activities into integrated engineering services relating to rotating equipment, such as gas compressors, engines, and generators. We currently cover a full portfolio of services, starting from the design stage of greenfield facilities, the upgrading of brownfield operations with modern technology, operations and maintenance, overhaul, supervision, spare parts supply, and more. We have completed several ambitious projects, such as work on 72 offshore wells, as well as the installation and upgrade of gas compressor stations.

Who are your main customers here?

Nobel Oil is closely cooperating with the State Oil Company of Azerbaijan Republic (SOCAR) and its production unions. Following demand from the energy sector in Azerbaijan, we are expanding our activities to catch up with the organic growth opportunities that are evolving in the region. Nobel Oil is building its competitive advantage around four business functions. The first function is called integrated energy services, and we continue to expand and develop our drilling operations and capabilities, work-over skills, operation and maintenance of oil and gas processing facilities, and oil and gas production facilitation services. Second is procurement and supply chain management. We aim to participate in various projects relating to the supply of goods and services, as well as long-term logistics supply projects in the region. The third function that is being formed is an engineering and project management function. With experience accumulated in the delivery of integrated services for rotating equipment, we have created the capabilities required to participate in various engineering, procurement, and construction (EPC) projects as a turnkey contractor or local integrated sub-contractor to international general EPC contractors. The energy sector in Azerbaijan is booming and SOCAR leads these multibillion-dollar projects. Competition is very fierce, and we are actively working in order to become a qualified local partner for the big international players. Last but not the least is upstream. Together with SOCAR, we started exploration activities at the Umid field, where our affiliate has a 20% interest. The early production of gas and condensate that started at Umid has opened up a new era for Nobel Oil as an upstream player. We are proud that our contribution to the project in form of competence, know-how, as well as equipment and investment, made this happen. It was the first gas condensate field that was discovered since Azerbaijan obtained independence without the participation of “oil majors.”

Production started on September 18, 2012 at a rate of 1.2 million cubic meters per day of gas and about 160 tons of condensate. Currently, gas is being supplied to the national grid network, and we are now discussing the action plan for full-field development with SOCAR in order to increase the production of this field drastically. The total reserves of this field are around 200 billion cubic meters, but we will continue the appraisal process and we believe this will increase further after the appraisal is finished.

What is your outlook for the oil and gas sector in 2013?

Overall, 2013 will be very challenging for us because we need to make adequate resource allocation to participate in a number of big projects to be implemented by SOCAR and BP in the region. We would like to participate in every project, but we must plan properly and mobilize our resources to successfully implement every project. One example includes a refinery project in Turkey, two fertilizer projects in Azerbaijan and Georgia, a gas-processing plant, and more. All these projects are large scale, so big players from all over the world are fighting to get them. As a local sub-contractor we could be of benefit to them and we have an appetite to be involved in every project. Again, it is a big challenge to get the project and there will be huge competition, not only among the companies, but also for the resources, because everyone will need to mobilize an adequate number of qualified engineers and skilled workers. I expect 2013 will be a very promising year for contractors and a difficult year from a competition perspective.

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