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Brazil’s Locomotive Breath

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The process of growth and modernization in Brazil has been always described as an example to be followed by other developing countries. Nevertheless, the Brazilian ‘locomotive’ has stopped.

The country is going through a period of dramatic political and economic instability. Although the Olympics Games should have been an international show of Brazilian power, they revealed the structural weakness of a country full of ambiguities and contradictions instead. Petrobras’ inquiry, combined with negative effects of the economic crisis, seem to have temporarily buried the China of South America. Oil wealth becoming yet another time not a blessing but a curse.

“In a broader sense, the hydrocarbons and its scarcity phychologization, its monetization (and related weaponization) is serving rather a coercive and restrictive status quo than a developmental incentive” – diagnoses prof. Anis H. Bajrektarevic, and concludes: “That essentially calls not for an engagement but compliance.“

To describe the history of the nation we need to focus our attention on oil, because the black gold is the embodiment of the success -and fall- of the Brazilian economy.

Oil – how black is gold

One the central drivers of Brazilian economic growth has been the production and the export of natural resources and their products. Looking at Brazil’s GDP between 1982 and 2015, three main trends can be observed. (i) A stable growth pattern from 1982 to 2002. (ii) The GDP rocketing up between 2003 and 2012, with a light slowdown during 2009-2010 caused by the financial crisis. (iii) A fall of GDP’s values between 2012 and 2015. Analyzing the evolution of the percentage of annual GDP growth’s, it is not possible to identify a specific trend. The most significant point that can be made is the constant growth of the GDP between 2004 and 2008, which was around 5% per year. The economic growth does not just imply a dramatic increase of GDP but also the improvement in social-economic status of millions of poor brasilians. Starting from 2001 the level of absolute poverty – defined as the percentage living with less than two dollars per day – decreased 12%. The levels of relative poverty – defined as the percentange of people with less than 50% of the average income – fell by 25% between 2002 and 2013.

Graph 1: Trend of Brazilian GDP 1982 e il 2014

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Graph 2: Percentage of GDP Grotwh 1982-2014

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Graph 3: Trends of poverty levels 1995-2013

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The value of export and of the satellite activities of natural resources for Brazilian is represented by their proportion on the total GDP. As clearly shown in Graph 4, one of the engines of the Brazilian boom in the 2000s has been oil. Its incidence on GDP increased remarkably from 1999, a stable growth that reached its peak during 2000s. Between 2003 and 2006 oil rents produced around 3% of total GDP. Graph 5 shows the cost of oil per barrel from 1980 to 2015. To clarify, the most important oil reserve in Brazil is Pré-Sal, which needs to compete in a market in which the price is of at least 70 dollars per barrel in order to be profitable. The fall of the international price of oil, then, has been penalizing the Brazilian economy that was already damaged by the crisis of Chinese demand and the slowdown of FDI.

Graph 4: Percentage of oil and natural resources on Brazilian GDP 1982-2012 

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Graph 5: Trends of oil barrel 1980-2014

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Eike Batista, imagine of Brazilian fable

The story of Erike Batista is bond with the growth and the fall of Brazilian economy. Batista has been one of the richest man in the world, 8th in the Forbes rank of worldwide billionaires and owner of 30 billion dollars in 2012. However, this changed in 2014 when he admitted to the loss of his wealth and his debt of one billion dollars. How is it possible that this self-made billionaire lost his wealth totalling a whopping 30 billion dollars? The success and the fall of Batista’s business is connected to oil. In the 80s, after completing his metallurgic studies, he went to Amazon forest to implement machines in the research and the extraction of gold. In the 1983 he bought a small society in the Canadian stock exchange, of extraction and trade of natural resources., that gained the value of 1.7 billion dollars in a few years. In 2002 he sold his company for 875 million. The devaluation of the asset was due to wrong investment done by the society in Greece, Russia and Czech Republic, which cost million of loss.

Batista exploited new opportunities that arose during the Brazilian economic boom. Between 2001 and 2002 he created and subsequently sold two companies to the Brazilian state; a thermodynamics and an iron production company. The holding that would make a Batista billionaire was OGX (Petròleo e Gàs Participacoes), specialized in the research and refinement of oil and gas. The market strategy of OGX was aggressive from the beginning. In 2007 he arranged the rights of exploration for 21 areas for OGX doubling the amount offered by its competitors. The next year OGX was able to produce barrels at the cost of 145 dollars per barrel and it announced their structures would be able to produce 1 million barrel per day in 2019. Batista’s ambitions and his confidence in Brazilian economy encouraged him to invest a large amount of money to build up an harbour at Acu, 400 km away from Rio de Janeiro. The project was supposed to create a centre for the refinement and the trade of oil products, thereby radically increasing OGX’ productivity.

From 2008 onwards, the Brazilian magistrate started to investigate bribes that Batista allegedly gave to the Governator of Amapà, Waldex Gòez, concessions of privileges for his companies. Even though the media caught wind of the investigation, the judiciary case was closed without any charges. The slowdown of Brazilian economy and the fall of the oil barrel started to strain foreign investors and foreign shareholders and lead them to reduce investments into Batista’s companies. The final blow was caused by the Abu Dhabi fund, Mudabala Development, which retired from EBX – one of Batista’s holdings – and asked for the liquidation of all their stock options which totaled 1.5 billion dollars. The financial pressure then cut the liquidity of Batista’s companies, which, having invested a lot of money, survived using financial leverage. Like a balloon, EBX snapped under the weight of financial debts that made Batista lose all of his assets.

Petrobas investigation

In March 2014, a group of Brazilian judges started to investigate the relationship between the Worker’s Party and the public oil company Petrobras. The charge was that executive directors of Petrobras and of the main building societies (Btp) developed a corrupt system in which Btp would receive contracts for the construction of oil platforms increasing the building costs between 1% and 3%. In exchange, governmental parties would obtain illegal funds to sponsor political campaigns. The companies involved were Camargo Corrêa, Oas, Utc-Constram, Odebrecht, Mendes Júnior, Engevix, Queiroz Galvão, Iesa Óleo & Gás e Galvão Engenharia and members of the Workers’ Party, the Brazilian Democratic Movement Party (Pmdb) and the Progressive Party. (Pp).

The main consequence of the inquiry was the delegitimization of the Workers’ Party that led Brazil from 2002 onwards. The President, Dilma Rouseleff was forced to leave office despite the fact she was not personally involved in the investigation. The successor of former President Lula endured immediate pressure to resign for her knowledge of systematic corruption as Chairman of Petrobras and Minister of Energy (2003-2005). Nevertheless, the impeachment of Rouseleff regarded the charge of having transferred public funds from national banks to finance social expenses that went beyond the fixed amount allocated for public expenses. However, the charges that led to her dismissal did not include the Petrobas scandal. Eduardo Cunha was the political leader leading the group that called for Dilma’s dismissal. Paradoxically, he was not only found with a secret million dollar bank account in Switzerland, but was also barred from assuming any public position for eight years due to an investigation for his involvement in corruption and bribes. Some representatives of worldwide left-wing parties talk about a conspiracy to dismiss the Workers’ Party. The Brazilian and international elite allegedly exploited the economic crisis to destroy the consensus of Lula and Rouseleff’s party, which had always had significant popular support. Lula won the election in 2002 with 46.4% of the votes against just 23.3% of his opposing candidate José Serra. In 2006, Lula was confirmed President with 48.6% in the next election. His successor, Dilma Rouseleff, won in 2010 with 46.9% of the votes. Even though she experienced a small decline, Rouseleff won the election in 2014 with 41.6% of the votes. These Brazilian governments made enemies in the international market due to their politics of nationalization and semi-nationalization of natural resources. For example, Petrobras, founded in 1953, was partially privatized during the 90s. However, Lula started a propagandist campaign in 2007 to return company under state control. In addition, to prevent the private exploitation of the Pré-Sal oil reserve, Lula’s government passed a law to give to Petrobras the monopoly to explore the area and extract oil from Pré-Sal.

Some influential voices, such as independent Brazilian experts and academics raised concerns about the nature of the process. Pedro Fassoni Arruda argues that there were secret powers behind the impeachment that were also involved in the coup d’etat in 1964. In a similar vein, Pablo Ortellado criticised the framing of Rouseleff in the media. Sapelli contends that the modern political history of Brazil is characterized by a deep fragmentation of parties, which means every President has to deal with many small personalist parties. The external support that every government needs to administrate generated the construction of a system of corruption intrinsic to Brazilian society. Many experts believe that judge’s actions could enforce the trust of markets and investors in Brazilian institutions. Cutting the ambiguous bonds that exist between parties and companies should help to make the legal framework more stable and safe, strengthening the power of the Law. This could be a message from Brazil to all the world, that whoever is corrupted, no matter what status, will be punished.

Recently, the news reported the Brazilian parliament approved a law with 292 in 393 to abolish the monopoly of Petrobras on the reserve of Pré-Sal. This law seems to be just the first step of a greater project of privatization pursued by President Michel Temer. With strong politics of liberalization for Brazilian natural resources, Brazil seems to offer intriguing opportunities for business and investments for many multinationals. If Petrobras’ inquiry is just conspiracy or smart intuition is hard to understand. Surely, the destiny of Brazil will be, another time, defined by black gold. For better or worse.

Energy

Armenia’s attack against Tovuz is also an attack against Europe’s energy security

Dr. Esmira Jafarova

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The recent escalation of tensions between Armenia and Azerbaijan, this time along the international border in the direction of the Tovuz district of Azerbaijan in the aftermath of an armed attack launched by Armenia on July12–14, 2020,had been brewing for some time before finally boiling over into full-fledged military clashes, the worst in recent years, that caused causalities and destruction on both sides. Azerbaijan lost more than 10 servicemen, including one general and a 76-year-old civilian. There are many reasons why this attack happened in this particular border area (and not along the Line of Contact, as usual) and at this particular time, but in this piece I want specifically to focus on one of them and, in concurrence with other internationally recognized scholars in this field, assert that this attack against Azerbaijan should be considered as an attack against Europe’s energy security and well-being.

To begin, a brief review of the history of recent developments in conflict resolution testifies that, although the year 2019 was relatively incident free along the Line of Contact between the Armed Forces of Armenia and Azerbaijan, and for the first time in many years mutual visits of journalists took pace, the year was also identified as the “lost year for the conflict settlement” owing to the lack of progress in the negotiations. This absence of progress was accompanied by incendiary rhetoric employed by Armenia’s Prime Minister Nikol Pashinyan who, having ascended to power on the back of the many alluring promises of the so-called “Velvet Revolution,” found himself grappling to deliver on those ambitious reform pledges. The harbingers of heightening hostility were seen in Pashinyan’s infamous declaration during the pan-Armenian games held in Khankendi on August 5,2019, when he said that “Nagorno-Karabakh is Armenia, and that is all;” as well as his continuous insistence on changing the negotiation format –already established by the relevant decisions of the OSCE –to include representatives of the puppet regime in the occupied Nagorno-Karabakh region as an independent party to the peace negotiations.

The year 2020 started off with the January meeting of the Foreign Ministers in Geneva, and in April and June two virtual meetings were held because of COVID-19 lockdowns; however, hopes for any positive progress quickly subsided in the wake of other negative developments. The so-called “parliamentary and presidential elections” that were held by Armenia in the occupied Nagorno-Karabakh region of Azerbaijan on March31, 2020, were condemned by the international community. These mock elections later culminated in the Shusha provocation,in which the “newly elected president” of the puppet regime in the occupied territories of Azerbaijan was “inaugurated” in Shusha – a city that carries great moral significance for Azerbaijan. The last straw in a hostile build-up was the denial by Pashinyan of Russia’s Foreign Minister Sergei Lavrov’s comments about a staged, step-by-step solution to the conflict; Pashinyan denied that this was ever the subject of negotiations. The very recent threats by the Armenian Ministry of Defense, which publicly threatened “to occupy new advantageous positions” in Azerbaijan, further testified to the increasingly militaristic mood among Armenia’s upper echelons.

This litany of discouraging events relating to the peace process over the last year and a half in some ways heralded what we witnessed on July12–14, 2020.This attack against Azerbaijan along the international border between Armenia and Azerbaijan reflects the deep frustration of the Pashinyan regime in its inability to bring about the promised changes. Economic problems were heightened by the COVID-19-induced challenge and decreasing foreign assistance, and this was all happening against the backdrop of Azerbaijan’s increasing successes domestically, economically and internationally. Azerbaijan has long been established as an important provider of energy security and sustainable development for Europe through the energy projects that it is implementing together with its international partners. The Baku–Tbilisi–Supsa Western Export (1998) and Baku–Tbilisi–Ceyhan (2005) oil pipelines and Baku–Tbilisi–Erzurum (2006) gas pipeline have enhanced Azerbaijan’s role as an energy producing and exporting country, and the Southern Gas Corridor (SGC) is already becoming a reality. This 3500-km-long Corridor comprises four segments – the Shah Deniz-II project, Southern Caucasus Pipeline Extension (SCPX), Trans Anatolian Pipeline (TANAP) and its final portion, the Trans Adriatic Pipeline (TAP). The Corridor passes through seven countries – Azerbaijan, Georgia, Turkey, Bulgaria, Greece, Albania and Italy – with Italy being the final destination receiving Caspian gas. Turkey is already receiving gas via TANAP and is contracted to accept up to 6 billion cubic meters of gas via this pipeline. Europe is expected to receive 10 billion cubic meters of Azerbaijani gas per year, and the first gas has already arrived on Albanian territory. The SGC is scheduled to be fully operational by fall 2020 and TAP is almost complete. Things are progressing uninhibitedly and even the COVID-19 pandemic has been unable topreventthe success of the SGC. This Corridor stands as one of the guarantors of Europe’s energy security by providing diversification of energy sources and routes, even despite Europe’s Green Deal, which also acknowledges the continent’s long-term demand for gas.

Such critical infrastructure, vital for Europe’s energy security, passes close to the border area that includes the Tovuz district attacked by the Armed Forces of the Republic of Armenia on July12–14. Armenia is the only country in the South Caucasus that is isolated from these regional energy projects owing to its policy of expansion and occupation. It is thus the only country that does not have anything to losefrom creating chaos and destruction around this critical energy infrastructure. Jealousy and the feeling of self-imposed isolation from all regional cooperation initiatives have no doubt increased Armenia’s hostility toward these energy projects. Further vivid evidence of Armenia’s belligerence against Azerbaijan’s energy infrastructure was provided by its threat to attack the Mingachevir Dam, a civilian infrastructure project that is also a vital component of Azerbaijan’s largest hydroelectric power plant. Hydroelectric power comprises the largest component in Azerbaijan’s renewable energy potential, today standing at around 17–18%ofthe overall energy balance of the country. It is not difficult to imagine the magnitude of civilian causalities in case such a destruction materializes. 

By conducting this act of aggression against Azerbaijan along the international border in the direction of Tovuz, Armenia wanted firstly, to divert attention from its own internal problems. Secondly, the regime desired to disguise its failures on the international front, especially recently when Azerbaijan initiated the summoning of a special session of the United Nations General Assembly related to COVID-19,convened on July 10, that was supported by more than 130 members of the UN. Thirdly, Armenia wanted to drag in the Collective Security Treaty Organization (CSTO) against Azerbaijan by invoking Article 4, which states: “… if one of the States Parties is subjected to aggression by any state or group of states, then this will be considered as aggression against all States Parties to this Treaty…”.Fourthly, and the central thesis of this article, Armenia intended to target critical energy infrastructure implemented by Azerbaijan and its international partners, thereby jeopardizing the energy security of not only the neighboring region, but also of the greater European continent. The aforementioned existing oil and gas infrastructure aside, the SGC is set to be fully operational by fall 2020, and this multibillion-dollar megaproject offers economic, social and many other benefits to all participating countries involved in the construction and implementation of this project. Any damage to this critical infrastructure would deal a heavy blow to the current and future sustainable development of Europe.

Europe must therefore be vigilant regarding such provocations. International actors, including the European Union,OSCE Minsk Group, United Nations, United States, and the Russian Federation, called for an immediate cessation of hostilities between Armenia and Azerbaijan. However, given what is at stake,including this time the crucial energy infrastructure, had Armenia’sattack not been proportionately parried by the Azerbaijani Armed Forces, the statement made by the European Union about this recent military attack could have contained stronger language beyond just “…urging both sides to stop the armed confrontation, refrain from action and rhetoric that provoke tension, and undertake immediate measures to prevent further escalation… .” Naming and shaming the aggressor appropriately is indispensable in this situation. As Mr. Hikmat Hajiyev, Head of Foreign Policy Department of the Presidential Administration and Adviser to the President of the Republic of Azerbaijan on Foreign Affairs, also noted: “the EU should distinguish between the aggressor and the subject of aggression.”

In the 21st century, the international community should not tolerate such flagrant violations of international law; disrespect of UN Security Council resolutions (822, 853, 874, and 884) and other relevant international documents calling for an end to the occupation of Azerbaijani territories; and the feeling of impunity in instigating an attack against a sovereign state, a neighbor, and a crucial player in the realization of critical energy infrastructure projects key to Europe’s own energy security. Azerbaijan has long put up with such aggression and the occupation of its internationally recognized territories in Nagorno-Karabakh region and seven adjacent districts, and has opted for negotiations toward a peaceful solution of the conflict. Yet the aggressor cannot be allowed to continue its attacks against other parts of Azerbaijan– this time Tovuz –thereby jeopardizing not only the latter, but also energy security and sustainable development of the greater European continent just because such provocations seem to offer an escape from the regime’s domestic and external problems. Such practices should be condemned in the strongest possible terms. This should be done not only for the sake of Azerbaijan and regional security in the South Caucasus, but in the name of Europe’s own energy security and well-being. 

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Energy

Palestine Plays Regional Power Politics with Proposed Energy Deal

Dr. James M. Dorsey

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Faed Mustafa, Palestine’s ambassador in Ankara, Turkey

When Faed Mustafa, Palestine’s ambassador in Ankara, expressed interest in June in negotiating with Turkey an agreement on the delineation of maritime boundaries in the eastern Mediterranean and cooperating on the exploitation of natural resources, he was repositioning Palestine in the larger struggle for regional dominance and the future of his state.

“We also have rights in the Mediterranean. Palestine has shares in oil and gas located in the eastern Mediterranean. We are ready to cooperate in these areas and sign a deal,” Mr. Mustafa said.

Mr. Mustafa did not spell it out, but Palestine would bring the Gaza Marine gas deposit, 36 kilometers off the Gazan coast, to the table. Discovered in 1999, the field, believed to have reserves of 31 billion cubic meters, remains unexplored as a result of multiple armed Israeli-Palestinian clashes, Israeli obstruction, and repeated changes in the consortium that would have ultimately exploited the field.

Palestine’s efforts to hook up with Turkey, at a time when relations with Israel have all but broken down, coincide with stepped up Israeli attempts to stymie Turkish inroads in Palestine paved by support for activists in Jerusalem and funding of historic and cultural facilities, in the wake of US President Donald J. Trump’s 2018 recognition of the city as Israel’s capital.

The Palestinian move also is a ploy to counter several steps taken by the United Arab Emirates and Saudi Arabia to confront Turkey in Jerusalem and the eastern Mediterranean, facilitate a US plan to resolve the Palestinian-Israeli conflict that endorses annexation, and influence the succession of ailing 84-year old Palestinian President Mahmoud Abbas.

Turkish President Recep Tayyip Erdogan vowed last week in a speech celebrating the change of status of Istanbul’s Hagia Sofia – originally built as a Greek Orthodox church in 537 AD, then renovated into a mosque before becoming a museum by the founder of the Turkish Republic, Mustafa Kemal Ataturk, in 1935 – to a mosque once again this month, that it would be “the harbinger of the liberation of the Al-Aqsa mosque.”

Al-Aqsa on the Harm-e-Sharif or Temple Mount in Jerusalem is Islam’s third holiest shrine. Backed by Israel, Saudi Arabia has sought to muscle its way into the Jordanian-controlled endowment that administers the Harm-e-Sharif.

A Palestine hook-up with Turkey could complicate Palestinian membership of the East Mediterranean Gas Forum, dubbed the OPEC of Mediterranean gas, that also includes Egypt, Cyprus, Greece, Israel, Italy, and Jordan. France has applied for membership in the Cairo-based grouping while the United States is seeking observer status.

Founded in January and backed by the UAE, the Forum is virulently opposed to Turkish attempts to redraw the maritime boundaries in the region on the back of an agreement with Libya. Turkey refused to join the Forum.

While it is unlikely that the Gaza field will be operational any time soon, production would reduce Palestinian dependence on Israel. Palestinian officials said early this year that they were discussing with Israel an extension of Israeli pipelines to send gas from Israeli gas fields to Palestine but that the talks, contrary to Israeli assertions, did not include development of the Gaza field.

In a twist of irony, Qatar, the UAE’s nemesis, would support a pipeline agreement by guaranteeing Palestinian payments for the gas. The Israeli pipeline along a 40-kilometer route adjacent to the Gaza border with three pumping stations would enable Gaza to operate a 400 MW power plant in a region that has, at the best of times, an energy supply of 15 hours a day.

The status of the talks remains unclear given an apparent delay of Prime Minister Benjamin Netanyahu’s annexation plans amid international condemnation and US insistence that the Israeli leader postpone his move that had been scheduled for July 1.

Qatar reportedly threatened to cut off millions of dollars in aid to Gaza, provided in coordination with the Israeli government, if the Jewish state pressed ahead with annexation.

In June, Israel  approved the transfer of US$50 million from Qatar to Gaza in a bid to dial back mounting tension with militants in the Strip that could spark renewed military confrontation as both Israel and Palestine struggle to get a grip on the coronavirus.

Some Palestinian analysts see the pipeline deal as an attempt by the Palestine Authority (PA) to enhance its influence in Gaza and undermine Hamas – its Islamist rival that controls the Strip – by a significant contribution to a surge in the power supply and a dramatic reduction of the cost of electricity. The risk, these analysts say, is that the pipeline would increase Palestinian dependence on Israel.

Economist Nasr Abdel Karim argued that Israel would only allow enhanced flows of gas, including from the Gaza field, if it leads to an even deeper split between the territory and the West Bank.

“Israel will not allow the Palestinians to benefit from the gas field for economic and political reasons. Israel might allow this in one case — if this plan is part of a bigger project to develop Gaza’s economy so that it splits from the PA and the West Bank,” Mr. Abdel Karim said.

Author’s note: An initial version of this story was first published in Inside Arabia

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Energy

Dangerous attack on Europe’s energy security

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Analysis of the causes of the recent military confrontation on the Armenian-Azerbaijani border reveals an interesting panorama. No such sharp military confrontation or casualties were reported along the border of these two South Caucasus countries during the 30-year-long Nagorno-Karabakh conflict.

Until July 12 this year, the main place of military confrontation between the two countries was Nagorno-Karabakh and 7 adjacent regions, which are recognized by international law as the territory of Azerbaijan and occupied by the Armenian Armed Forces. The last such sharp military confrontation between two countries took place in April 2016 and is engraved in history as a four-day April war.Since then, there has been no such confrontation between Armenia and Azerbaijan with using of heavy artillery and air force.

This time the clash took place in the Tovuz region of Azerbaijan, 300 kilometers from Nagorno-Karabakh.According to the Azerbaijani Defense Ministry, starting from noon on July 12, Armenian Armed Forces violated the ceasefire in the Tovuz region of the Azerbaijani-Armenian border and fired on civilian and military positions using artillery. As a result, 12 Azerbaijani servicemen and 1 civilian were killed. The attack was prevented only after retaliatory strikes, but the ceasefire along the border has not yet been fully restored. The co-chairs of the OSCE Minsk Group (USA, Russia, France) which mediate in the peaceful settlement of the Nagorno-Karabakh conflict, the European Union, as well as the international community call for a ceasefire. However, the possibility of resuming the ceasefire soon is not yet on the horizon.

In this case, one of the main points that raises the question is why the fighting took place not in the direction of Nagorno-Karabakh, but on the Armenian-Azerbaijani border. The point is that the region where is situated the Tovuz region of Azerbaijan, attacked by the Armenian Armed Forces, ihas a strategic importance. The Baku-Tbilisi-Ceyhan pipeline, which carries crude oil to Europe, the South Caucasus Pipeline, which is the beginning point of the Southern Gas Corridor, including the Trans-Adriatic Pipeline (TAP) to Italy, and the Baku-Tbilisi-Kars railway, which laid the foundation for the revitalization of the Silk Road pass  from Tovuz region also. The military provocations in Tovuz not only destabilize the region, but also hinder the operation of these important projects, which provide access to alternative energy sources for Europe.

Elshad Nasirov, Vice President for Investments and Marketing of the State Oil Company of Azerbaijan (SOCAR), also voices interesting views on this issue: “In my opinion, it is not accidental that Armenia launched a military operation against Azerbaijan three months before the start of Azerbaijani gas supplies to Europe. Military operations are realised on the Armenian-Azerbaijani border, not in Nagorno-Karabakh, which is recognized by all international organizations and countries as the territory of Azerbaijan. All the infrastructure that brings Azerbaijan’s energy resources to Western countries and the world market is located in this region. Baku-Tbilisi-Ceyhan, Southern Gas Corridor, Baku-Supsa pipeline, Baku-Tbilisi-Kars railway, Baku-Tbilisi highway pass through the direct view and proximity of the place where the Armenian military operations began. I invite our colleagues from Washington, Europe and elsewhere to think about how sensitive the Ganja Corridor and the Trans-Caspian region are and how to ensure the military and physical security of Europe’s energy security corridor”.

At present, European countries are among the main consumers of Azerbaijani oil. Italy is Azerbaijan’s main trading partner in the sale of this oil on world markets. In the autumn of this year, Europe will also start consuming Azerbaijani gas. For this purpose, a 3,500-kilometer-long Southern Gas Corridor pipeline is being built and is nearing completion. Its last ring, the Trans-Adriatic Pipeline to the Italian shores of the Adriatic Sea, is 97 percent completed. TAP is the European section of the Southern Gas Corridor, enhancing Europe’s energy security and contributing to decarbonisation and the diversification of gas supplies.

In October 2020, the pipeline will start transporting Azerbaijani gas to Europe. Thus, Europe will start importing natural gas from a completely new source. The attack on Azerbaijan’s Tovuz region shortly before this important event is also considered an attack on Europe’s energy security. Azerbaijan believes that one of the main goals of Armenia’s latest provocations is to destabilize the region and hinder the operating  of these important projects, which will allow Europe to access alternative energy sources and new markets.

There is another dangerous reason for Armenia’s bombing of the border areas densely populated by the Azerbaijani population. The another aim of the provocation and tension in the direction of Tovuz region of the state border between the two countries is to involve third parties to the conflict.We are talking about Russia and member countries of the Collective Security Treaty Organization (CSTO). Azerbaijan’s Ambassador to Russia Polad Bulbuloglu says in this regard: “There is no doubt, this was done to involve the CSTO member countries and, first of all, Russia into the conflict. Because it’s clear that Azerbaijan has bilateral partnership relations, including economic ones with all members of the CSTO. The local task is to raise the CSTO, primarily Russia, the global task is to create another hotbed of tension along the perimeter of Russia, which would create certain concerns”.

Assistant to Azerbaijan’s President, Head of Foreign Policy Affairs Department of the Presidential Administration Hikmat Hajiyev agrees üith this opinion. He says Armenia seeks to involve military-political organizations, member of which it is, into the Karabakh conflict, through military provocations, and avoid responsibility for occupation and aggression against Azerbaijan.

However, Armenia’s efforts in this direction did not yield results.Even though Head Secretary of the organization initially said it would hold an emergency meeting on the issue, but later postponed it indefinitely period.However, Armenia still does not give up its attempts to involve Russia and the organization in the conflict. In this case, Turkey the member of NATO  openly supports Azerbaijan. In this context Armenia is trying to confront NATO and Russia in the Caucasus by exaggerating the Turkish factor. But this time, Russia is cautious.

Nevertheless, it is important to resolve the Nagorno-Karabakh conflict as soon as possible within the framework of international law in order to prevent the dangerous development of events. It should be reminded that, four resolutions of the UN Security Council demanding unconditional withdrawal of the Armenian troops from the occupied territories.Armenia in 1990 years aggressively occupied the Nagorno-Karabakh region and the adjacent seven districts of Azerbaijan. The conflict between the two South Caucasus countries began in 1988 when Armenia made territorial claims against Azerbaijan and as a result of the ensuing war, Armenian armed forces occupied 20 percent of Azerbaijan. Over a million Azerbaijanis living in these territories were subjected to ethnic cleansing and were expelled from their homes.The 1994 ceasefire agreement was followed by peace negotiations. But Aprel war in 2016 and border clash in July of this year shows the conflict may ignite in any time on military ground.

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