THERE WERE DEFINED THE BASIC DIRECTIONS OF ALTERNATIVE AND RENEWED ENERGY SOURCES USING

The Ministry of Industry and Energy of the Republic of Azerbaijan, Mr. Majid Karimov.

Caspian Energy: Mr. Karimov, what is the stage of headed by you Ministry's structure formation?

The Ministry of Industry and Energy of the Republic of Azerbaijan, Mr. Majid Karimov: The established on the base of Decree of the President of the Republic of Azerbaijan, National Leader Heydar Aliyev dated April 18, 2001 the Ministry of Fuel and Energy (MFE) as a body of central executive power has realized and fulfilled the State policy in Fuel and Energy Complex (FEC) for more than three years. We should note that such kind of large companies like SOCAR, JSC "Azerigaz" and "Azerenerji" join to FES of Azerbaijan. In accordance to done reforms in the aim of improvement of state department structure on the base of Decree of the President of the Republic of Azerbaijan Ilham Aliyev dated December 6, 2004 the obligations of the MFE were transferred to founded by the same Decree Ministry of Industry and Energy (MIE). Presently, there are carried out the works on development of standard-lawful base connected with the MIE activity.

What did change with adding the new obligations to the Ministry regarding the industry of Azerbaijan?

In connection with establishment of MIE by Decree of the President of the republic it was transferred the extra obligations connected with State regulation and control in the field of industry. By about 3.000 plants join into industry and fuel-energy complex of the Republic. In the terms of dynamically development of some industry branches the one of main tasks is the increasing of using level of presence scientific-technical and trained potential. The successful implementation of "State Program of the Republic of Azerbaijan on development of Fuel Energy Complex (2005-2015)", confirmed by the President of the Republic of Azerbaijan dated February 14, 2005 promoted for construction of new plants and factories in the country, opening of new working places and common development of industry branches in the Q I of 2005.

The acceleration of industry branches development depends on creation of profitable processing environment, improving of industry processing structure on market economy, increasing of competitive of industry plants both in domestic and foreign markets, attraction of technologies as investments. The solving of all matters will be defined in profitable MIE activity and we will build all efforts for their successful implementation.

Which does strategy and plans on attraction of new foreign investments in oil sector of country, signing of new agreements on development of Azerbaijan oil and gas structures, forecasts for decade?

Since signing of September 20, 1994 the "Contract of the Century" on development of "Azeri-Chirag-Gunashli" (ACG) with famous foreign oil companies of leading countries of the world, there was laid by National Leader Heydar Aliyev of Azerbaijan the base of new oil and gas strategy of the Republic of Azerbaijan.

Today, there were signed in Azerbaijan 25 oil contracts with 35 companies from 15 countries of the world. The volume of investments on stated contracts is estimated at 70 bn USD. Forecasted profits of the republic make 40-60 bn USD. Today, there was invested to development of Azerbaijan oil industry infrastructure by about 9 bn USD of foreign investments.

For effective profit using from oil and gas production the Government of Azerbaijan established the state Oil Fund. The profits accumulated in the fund will be invested into economy of Azerbaijan, particularly into sphere of non-oil sector that will be resulted for improvement of population's social condition, opening of new working places and common to acceleration of economy development. Realization of these projects is major priority of Azerbaijan government.

At present there is continued the intensive work over major four projects having the main meaning for the Republic and generally for country. The first is development of ACG field, the second - development of gas condensate "Shah Deniz" field, the third - construction of main export pipeline Baku-Tbilisi-Ceyhan named after Heydar Aliyev and the forth - construction of the South Caucasus Pipeline Baku-Tbilisi-Erzurum.

Implementation of stated projects will let to reach the oil production in the Republic of Azerbaijan by 2010 up to 60 mln tons and gas - up to 20 bcm for a year.

Introduction of modern technology of oil and gas production, using of advance oil and gas equipment, organization of modern coastal infrastructure the large utilizing of international standards will promote to development of oil and gas industry of the region.

At present within the frame of signed agreements there are carried out the geology prospecting operations in the Azerbaijan sector of the Caspian Sea. Furthermore, there are fulfilled the works by attraction of foreign investments for restoration of oil and gas structures in onshore.

What about the realization of oil and gas export project via pipeline named after Heydar Aliyev and South Caucasus gas pipeline?

There are large perspectives of oil and gas production in the sectors of the Caspian. in this connection the important subject is the Caspian oil and gas supplying to European and world markets for providing of growth needs in the world energy carriers economy.

Presently, there is continued the construction of BTC oil pipeline named after Heydar Aliyev with extension 1768, capacity - 50 mln. tons of oil for a year. For today 97% of operations has already been done and the volume of investments makes approximately 2,8 bn USD. On May 10, 2005 the filling was begun at Sangachal terminal. And on May 25 will be begun the filling of Azerbaijan part's BTC pipeline. The first oil from Ceyhan to Mediterranean sea is planned to export at the end of 2005.

From technical point of view the pipeline will meet to highest technology, constructive, ecology requirements and will be provided with pipeline's protection systems from increasing of pressure, appearing of escapes, cathode protection, telecommunication, high integrated SCADA system by control and management of transportation process that meets to modern requirements of technique safety, health and environment protection. Totally the investments made 4 bn USD. On base of Ankar and Istanbul declarations there are fulfilled the negotiations around the main intergovernmental contracts and agreements on transportation of Kazakhstan's oil via Aktau-Baku and further through BTC. There are realized the operations by investigations and determination the opportunities of Azerbaijan and Kazakhstan infrastructure, defined the necessary charges and volumes of units' construction for providing with oil transportation from Kazakhstan to Azerbaijan with further connecting to BTC.

Extracted gas at "Shah Daniz" will be exported via Georgia to the Turkish markets and then to Europe. At the beginning of October 2004 the construction of the South Caucasus pipeline Baku-Tbilisi-Erzurum was begun. The extension of pipeline will be 915 km., capacity - more than 20 bcm for a year, totally the investments made 1 bn USD. At present 70% has been implemented, invested 700 mln. USD. Construction completion is planned to September 2006.

There are many projects in Azerbaijan by improvement of energy system. We would like to know about further operations in the filed?

There "State Program of the Republic of Azerbaijan on FES development (2005-2015)" confirmed by the decree of the President of the Republic of Azerbaijan dated February 14, 2005 is considered the plan of measures for development of energy power system.

The plan of measures includes the creation of new generated powers, reconstruction and upgrading of existent energy powers. In the aim is considered the construction in Sumgayit of ecology clear energy power of modern type with high efficiency and with 500 mWt. There will be set at station the equipment Siemens made.

According to State program there is also considered the construction of great second queue CSPS "North" with 400 mWt of modern type due to long-term and privilege Japanese credit, reconstruction of CSPS Ali-Bayramli, upgrading of 1-8 energy blocks of the Republic of Azerbaijan CSPS and 1 and 3 hydro aggregates of Mingachaur CSPS.

The program also considers the construction of energy transmission lines of high voltage, new substations, complete repairing and increasing of power of existent substations and transmission of power lines, creation of modern dispatcher control system as SCADA, increasing of powers of transmission power lines in the goals of energy exchange between energy systems with the Russian and Iran.

In the purpose of increasing of energy power of Nakhchivan AR is planned the creation of new generated powers and enlargement of network with high voltage. In State program is planned the complex of measures that will provide with the improvement of distribution power networks. There is planned the creation of information base and lines' improvement.

Which projects will be realized in connection with adopting of State program on execution of alternative sources of energy, which realization your Ministry is obliged?

In connection with "State program on realizing of alternative and renewed sources of energy" confirmed by the Decree of the President of the Republic of Azerbaijan dated October 21, 2004 and the coordinator of the program the MIE is defined. There is defined the main goals connected with using of potential sun energy, geothermal water, hydro energy of mountain rivers and water channels, including energy biomass.

There is also considered the improvement of legal base of the Republic of Azerbaijan by introduction of papers in the field. The attraction of investors into projects on utilizing of alternative ad renewed energy sources, stimulating of conditions' creations for their activity and implementation of works aimed for providing of the first class sail in the energy market of ecologically clear energy products is planned.

Regarding the measures are planned the informing of population about alternative and renewed energy sources, development of school-books and training.

In connection of state program in the goals of investors' attraction, study of international experience, inviting of foreign producers to the country, the applications of MIE to foreign finance institutes, embassies, international organizations and foreign companies that got great working experience in the field. At present, there are fulfilled the works on realization of different projects joint with several international organizations and foreign companies.

Thanks for your interview