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Dmitriy Solovyov

AZERBAIJAN - Energy & Mining

Reach the Market

General Director, Cross Caspian Oil and Gas Logistics

Bio

Dmitriy Solovyov began his career in logistics and supply chain management at the SunTea Group of Companies in Dubai in 1998 after graduating, and later joined Middle East Petroleum FZE in Baku in 2001, where he managed the Economic Analysis and Planning Department for the Dubendi Oil Terminal. He joined Ocean Energy in 2003 on its energy trading side. In 2006 he became Planning and Logistics Department Manager of Cross Caspain Oil and Gas Logistics, and was appointed the company’s Acting General Director in 2007. Since 2010 he has been the General Director of the company.

What is your company’s level of involvement in Azerbaijan’s energy sector? Our company is a joint venture between the State Oil Company of the Azerbaijan Republic (SOCAR) and AzTransRail, a […]

What is your company’s level of involvement in Azerbaijan’s energy sector?

Our company is a joint venture between the State Oil Company of the Azerbaijan Republic (SOCAR) and AzTransRail, a rail forwarder engaged in the transportation of hydrocarbons. Our shareholders’ names speak for themselves. SOCAR is a state oil company, being one of the largest entities in the oil sector, and AzTransRail is one of the major hydrocarbon rail forwarders in the region. The company started operations in 2005, inheriting the vision and experience of its shareholders.

What changes have taken place in the region’s oil and gas sector since you started operations?

There has been a clear process of consolidation and institutionalization. In Azerbaijan large-scale projects such as the Baku-Tbilisi-Ceyhan (BTC) pipeline, the Azeri-Chirag-Guneshli (ACG) oil and Shah Deniz gas fields, are now operating. In Kazakhstan, the Tengiz and Karachaganak projects are in operations, and the giant Kashagan oil field is being developed. A certain volume of Turkmen crude oil is delivered to the BTC, and a significant share of oil products from Turkmenistan is traditionally transshipped via this route. There is a lot of activity going on, and that means a lot of opportunities and responsibilities for the transportation sector. Azerbaijan has always provided a stable environment for the transshipment of hydrocarbons. In terms of consolidation, there have been investments by SOCAR and its partners in the Kulevi Oil Terminal in Georgia, a modern facility that started operations in May 2009. There is also a new terminal under development in Qaradagh. Furthermore, KazTransOil acquired the Batumi oil terminal. In Azerbaijan and Georgia there has been a lot of international involvement in the development and utilization of infrastructure, and this ensures that the services provided are always monitored for compliance with international standards in terms of quality, safety, efficiency, and flexibility. Overall, there is a high level of cooperation among all the stakeholders. We all share a common goal of making the Azerbaijan-Georgia transit corridor work and to transport as much hydrocarbons as possible from the Caspian shores to the Black Sea.

How have the necessary rail connections developed?

The Azerbaijani and Georgian railway systems are interconnected in terms of transporting cargo from the terminals located on the Caspian shore in Azerbaijan to the terminals located on the Black Sea shore in Georgia. When terminals are built, it is always crucial to take into account the technical capabilities of the railway systems, and the technical capabilities of the other terminals. The transit terminals in Azerbaijan need to work in tune with those in Georgia. As well, the requirements of shippers need to be studied and satisfied, while reconciling these needs with the technical specifications of the transshipment facilities being utilized.

What investment and development plans are you working on in the medium to long term?

Hydrocarbon logistics always require close monitoring and continuous capital investments. Continuous maintenance along with developing of new capacities and/or facilities are capital intensive activities.

What is your evaluation of the sector’s human capital in Azerbaijan?

Azerbaijan has typically been a regional center for the oil industry. It was also one of the historic centers for oil research and science in the former Soviet Union. All these factors, along with the rapid and solid development of the economy, help us in finding many skilled and highly qualified people in Azerbaijan.

Would you say that Azerbaijan is developing into a hub for oil and gas flows with other Central Asian states?

Yes, that’s correct. If a country produces and safely exports its own oil it can always serve as an additional economic stability factor. However, if a country struggles to export its own production, it is impossible to serve as a hub, because conflict would arise in terms of insufficient hydrocarbon transportation capacity. Azerbaijan is one of the rare examples where production can be wholly exported due to the visionary long-term planning implemented, as seen in projects such as the BTC and SPC. They stand out as being the most significant achievements in the oil industry for the last 20-30 years. Azerbaijan can export its hydrocarbons in many directions, providing more than enough transportation capacity. Azerbaijan, therefore, is an extremely viable, stable, and attractive hub for shippers.

How do you see your transportation assets developing in the future?

Every export and transit route requires a certain combination of assets. We have the right combination of assets to transport crude oil and oil products from the Caspian Sea to the Black Sea or via the BTC. I believe our corridor needs to concentrate on developing the further flexibility of these key assets.

How would you characterize the business environment for foreign investors engaging in the Azerbaijani energy sector?

Anyone attending international oil and gas exhibitions and conferences in the Caspian region can witness that in all cases Azerbaijan is mentioned as one of the best and most stable environments for foreign investments in the region.

Do you think there is need for any reforms or changes to make Azerbaijan more investor friendly?

I believe that Azerbaijan has provided one of the best possible environments, and you can see many successful developments that prove that. All of the big oil projects are successful. I am sure that Azerbaijan will continue to maintain its leadership in the region in terms of being able to maintain a creative environment for investment in the energy sector as well as in the other sectors of its rapidly growing economy.

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