Total, Europe’s third largest oil company, announced last Friday that they have made a major gas discovery in the Caspian Sea.
The discovery, made in the Absheron block off the coast of Azerbaijan, is thought to have large pockets of gas spread over a 270-square-kilometer field and holds about 350 billion cubic meters of natural gas and 45 million metric tons of gas condensate, according to SOCAR, the state oil company of Azerbaijan.
It is likely that additional reserves will be discovered as the exploration of the field advances. Participants in Absheron are Total (40 percent), SOCAR (40 percent), and Gaz De France (20 percent).
This discovery will benefit Total, Azerbaijan, and the entire southern Caucasus, making the Southern Gas Corridor from the Caspian to Europe one step closer to reality. The discovery confirms Azerbaijan’s potential to become a significant supplier of natural gas to Europe, making the Caspian basin a competitive source of gas in addition to Gazprom’s depleting West Siberian fields and vast but expensive-to-exploit Yamal peninsular fields in the north of Russia.
Total has been working in Azerbaijan since 1996 and already pumps 13,000 barrels of oil a day. The group owns 10 percent of the South Caucus Pipeline Company and 5 percent of the Baku-Tsibili-Ceyan Oil pipeline. Total’s senior vice president for exploration Marc Blaizot stated that the techniques developed by the company in its Caspian work would help it find more gas in similar basins off Britain, Brunei, Malaysia, and Egypt.
The gas find has far reaching geopolitical implications for the South Caucasus nation. With Azerbaijan emerging as a natural gas leading potential supplier, Europe views Azeri gas as a way to break Russia’s grip on the continent’s gas market. The European Union and Azerbaijan are expanding their relations. In January 2011, an important declaration on the Southern Gas Corridor was signed by Baku and Brussels.
Azerbaijani President Ilham Aliyev stated that Azeri energy policy “has one purpose—to promote the interests of the Azerbaijani nation and deepen regional cooperation.” Development of the Shah Deniz II, Absheron, and other gas reserves will benefit the entire region, providing funds for Azerbaijan’s development and a source of gas outside of the Russian network for Europe.
This discovery may irritate major gas suppliers, such as Russia and Iran. As additional gas exporters, such as Azerbaijan, step up gas exports, the geopolitical clout of the current leaders diminishes.
The United States should continue to encourage development of energy infrastructure in the region. As Matthew J. Bryza, the U.S. Ambassador to Azerbaijan, told the Trend News Agency, “The United States looks forward to continuing our work with Azerbaijan and the countries and companies developing the Southern Corridor…. We hope that the Southern Corridor will lead the way for future projects that will strengthen prosperity and stability throughout the entire South Caucasus.”