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PP RUEHAG RUEHDBU
DE RUEHKB #1012/01 1931320
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P 121320Z JUL 06
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC PRIORITY 0751
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RHMFISS/CDR USEUCOM VAIHINGEN GE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEKDIA/DIA WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 BAKU 001012 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EUR/CARC AND EB/ESC 
DEPT OF ENERGY FOR FE - SWIFT AND OS - WILLIAMSON 
 
E.O. 12958: DECL: 06/20/2016 
TAGS: ENRG ECON EPET EFIN AJ KZ RU TR
SUBJECT: EUR DAS MATT BRYZA AND TURKISH ENERGY ENVOY MEET 
SOCAR PRESIDENT ROVNAG ABDULLAYEV 
 
 
Classified By: Charge d'Affaires Jason P. Hyland, reasons 1.4 (b,d,e). 
 
¶1. (C) SUMMARY. EUR DAS Matthew J. Bryza and Turkish Special 
Energy Envoy Ambassador Mithat Balkan met with Rovnag 
Abdullayev, President of Azerbaijan's State Oil Company 
(SOCAR) on June 7 to discuss the southern gas corridor 
proposal.  Abdullayev said Azerbaijan is grateful for U.S. 
support over the years for its energy projects.  Abdullayev's 
priority on the oil side is bringing Kazakhstani volumes into 
BTC, and on the gas side he feels confident pushing forward 
with Phase I and II of Shah Deniz development and gas exports 
to Europe.  DAS Bryza stressed the importance of moving 
quickly to expand gas production, given Gazprom's strong push 
to secure available markets in Greece and Italy.  Ambassador 
Balkan noted that the southern gas corridor is not 
anti-Russian, but anti-monopoly and pro-competition. 
Abdullayev agreed but stressed the importance of political 
support from the United States.  DAS Bryza said the United 
States would provide that support as the countries and 
companies developed commercially viable projects.  END 
SUMMARY. 
 
¶2. (U) Immediately following their June 7 meeting with SOCAR 
Vice President (Marketing) Elshad Nasirov (septel), DAS Bryza 
and Turkish Energy Envoy Ambassador Balkan met with SOCAR 
President Rovnag Abdullayev in a formal setting that included 
Charge, Nasirov and some other SOCAR officials. 
 
¶3. (C) Abdullayev began the meeting by noting that BTC was 
not the end but a beginning, and that more energy projects 
lie ahead.  The United States has helped Azerbaijan "very 
much" in its pursuit of energy projects over the years, said 
Abdullayev, and Azerbaijan is grateful.  Abdullayev said that 
continued U.S. support will be vital in the coming years. 
Bringing Kazakhstan's oil into BTC is the number one priority 
on the oil side, said Abdullayev.  On the gas side, 
Abdullayev pointed out Azerbaijan's current dependence on 
Gazprom and need for an alternative.  Abdullayev said that he 
had recently had good meetings with BP and Statoil about the 
second phase of development for the Shah Deniz field. 
Abdullayev also mentioned the Nabucco project and said that 
Azerbaijan is prepared to provide gas volumes in support of 
it.  Nevertheless, Azerbaijan is still dependent on Gazprom 
for 50 percent of its gas needs and therefore must move 
cautiously. 
 
¶4. (C) DAS Bryza stressed the need for gas projects to move 
quickly, and briefly sketched the concept of delivering 
Azerbaijani gas to Greece and Italy through Turkey.  Gazprom, 
observed Bryza, is spreading disinformation in Athens and 
Rome that Azerbaijani gas volumes are insufficient to meet 
the needs of Greece and Italy.  Meanwhile, Bryza said, 
Gazprom is pushing hard for the Turkey-Greece-Italy 
Interconnector (TGI) to accept only Gazprom gas, "blocking 
the artery" against any future competitor.  Azerbaijan, 
Turkey, the gas producers and potential customers need to 
come together and work out a solution, said Bryza.  The 
United States will provide political support for the southern 
gas corridor project as companies and countries work together 
to realize commercially viable projects. 
 
¶5. (C) Ambassador Balkan noted that Turkey buys 65 percent of 
its gas from Gazprom.  The idea of the southern gas corridor 
is not "anti-Russia" but a legitimate way to protect 
commercial and economic interests by encouraging competition. 
 Abdullayev agreed. 
 
¶6. (C) DAS Bryza said that it is clear that Azerbaijan, 
Turkey and the United States are aligned on this issue, the 
question now is next steps.  Abdullayev said that the Phase I 
and Phase II development plans for Shah Deniz would go 
forward.  (He did not mention full-field development beyond 
Phase II.)  All Azerbaijan needs is political support, said 
Abdullayev - there are no technical problems with these 
projects.  Bringing in Central Asian volumes is a future 
possibility, he added, but echoed Nasirov's argument in 
reftel that securing Turkmenistan's cooperation will be 
difficult.  Turkmenistan is a political issue, not an 
economic one. All agreed it might make more sense to secure 
Kazakhstan's participation in the southern corridor first. 
 
 
BAKU 00001012  002 OF 002 
 
 
¶7. (U) DAS Bryza has cleared this cable. 
HYLAND