Tehran, Baku Discuss Caspian Energy Exploration

Tehran, Baku Discuss  Caspian Energy ExplorationTehran, Baku Discuss  Caspian Energy Exploration

Iranian and Azerbaijani officials discussed the exploration and development of the Caspian Sea oil and gas fields in Baku on Thursday, in the latest rounds of talks between the two countries to tap the rich oil and gas resources of the world's biggest lake.

A delegation from Khazar Exploration and Production Co., or KEPCO, represented Iran's state-owned National Iranian Oil Company in a meeting with the State Oil Company of Azerbaijan Republic, or SOCAR, Mehr News Agency reported.

SOCAR'S first deputy, Khoshbakht Yusifzadeh, said there is a huge ground for cooperation in the energy sector between Iran and Azerbaijan to help boost the two nation's economic development.

He added that "we should make the best of the opportunity" for joint exploration and development of the Caspian hydrocarbon resources.

"The preliminary terms of exploration and development in the region's oil and gas fields, the future of Iran-Azerbaijan oil trade, sharing the latest software and technologies in the oil and gas industry and joint analysis of seismic data for exploring deep underwater hydrocarbon resources were among the key issues discussed in the meeting," Yousef Etemadi, managing director of KEPCO, noted.

Sitting on a Gold Mine

The Caspian region is one of the oldest oil-producing areas in the world and is an increasingly important source of global energy production.

It holds an estimated 48 billion barrels of oil and more than 8 trillion cubic meters of natural gas in proven and probable reserves.

For the first time in more than a century, Iran discovered oil in its Caspian Sea waters in 2012, according to state media. The deposit was found at a depth of 2.5 kilometers and was estimated at that time to contain some 10 billion barrels of crude, or roughly 7% of Iran’s known reserves.

However, despite exponential growth in terms of extraction from southern oil and gas fields in the past few years, the Islamic Republic has yet to extract crude from its northern waters.

Moreover, decades-long endeavors to delineate the Caspian Sea between the five littoral states, namely Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan, have remained fruitless.

Unresolved disputes arising from the sea’s inadequate legal status and regime have posed obstacles to the exploitation of several offshore oil and gas deposits, and might block many projects, including trans-Caspian oil and gas pipelines.

Ties With Azerbaijan

Azerbaijan was the 12th leading importer of Iranian non-oil goods in the past year, according to Iran Customs Administration.

Iran exported $435.34 million worth of non-oil goods to Azerbaijan and imported $22.22 million worth of non-oil goods from the country. In addition, Azerbaijan is one of the two countries alongside Armenia to supply electricity to Iran under a swap agreement.

Shortly after Iran and the six world powers reached an agreement on Tehran's nuclear program on July 14, Iranian and Azerbaijani businessmen convened in Baku to explore expansion of ties in the energy, banking, transportation and tourism sectors.

Also last month, Iranian President Hassan Rouhani met with Azerbaijan's Economic Development Minister Shahin Mustafayev in Tehran and underlined the need for developing bilateral relations with the northwest neighbor.