Davos, 28 January (AZERTAC). Azerbaijan`s President Ilham Aliyev has attended the World Economic Forum`s session entitled “Global Energy Outlook”.

The World Economic Forum Annual Meeting has engaged leaders from all walks of life to shape the global agenda at the start of the year for the last four decades.

In response to new priorities, the organizing theme for this year`s Annual Meeting is a call to action, "Improve the State of the World: Rethink, Redesign, Rebuild".

The meeting brings together nearly 2,500 participants, including government representatives of the world’s top 25 economies and fast-growing small countries, including heads of state and government, ministers of finance and economy, and ministers of foreign affairs as well as governors and mayors of the world’s top regions and cities.

The “Global Energy Outlook” session was opened by Daniel Yergin, Chairman of Cambridge Energy Research Associates.

Moderator: I would like to begin with President Ilham Aliyev. The term energy security, what does it mean from the viewpoint of Azerbaijan and as you look at the global energy system?

President Ilham Aliyev: First of all I would like to say that most important for us from the point of energy security is diversification of supply routes. We managed to achieve that, and today we have a diversified pipeline system which can transport our natural resources in various directions. At the same time it is very important to provide the balance of interest between producers, transiters and consumers, so that we have sustainable and long-term energy cooperation. If this balance of interest is disrupted it may create certain problems. Another issue which is important for us is a fair market price for our natural resources, particularly for gas, and full commitment by all the parties to the signed contracts. I think these elements in the package can provide much more confidence for producers and for consumers with respect to energy security.

Moderator: Mr. President, for the first decade or so of Azerbaijan`s existence as an independent nation the focus was on oil. Spotlight turning certainly to natural gas, looking out five or ten years from now, what would you see in terms of Azerbaijan`s role in a global gas market and what are the obstacles to get in there?

President Ilham Aliyev: I think that, definitely, the role of Azerbaijan in a global gas market will grow. Because discovery of huge gas reserves will allow Azerbaijan to transform to one of the major gas exporters. As you know, the minimum proven gas reserves in Azerbaijan are more than two trillion cubic meters. So, that will be enough for us and for our export capacity for decades. And most important is now to provide that there is a reliable and long-term market for our gas. I mentioned that we have already a diversified gas supply system. But that system can transport only today`s level of production. What we are planning to do is to increase gas production two or three times, maybe more. To do that, we need much bigger capacity of pipeline infrastructure. And of course in order to invest major investments in new developments and pipeline infrastructure we need to have clear understanding who are our consumers, what is the market regulation in those countries, is the market reliable and long-term for us or not. After all these issues are in place I am sure that Azerbaijan will use its gas potential as successfully as we did with oil development.

Moderator: I guess that consumers are getting into view.

President Ilham Aliyev: Yes, we have consumers, we have also consumers around us. Azerbaijan is now transporting its natural gas to the neighboring countries, despite the fact that some of these countries produce much more gas than we do. But our target is to continue diversification to find new markets, particularly markets in Europe. We know that European consumers are also looking for diversification, new sources of gas supply, and Caspian gas, particularly gas from Azerbaijan can be, for the time being, the only gas source for Europe.

Moderator: Mr. President, we`ve been talking about volatility, what it does to companies. Maybe you share a word with us, you are responsible for the country. What does volatility does for you, for a country. And when you have the sudden upsurge in revenues and downs in the revenues, how do you manage to deal with stability and inflation and all those issues?

President Ilham Aliyev: I can tell you that the reforms which we conducted in our country for the last several years allowed us to create a sustainable and diversified economy. Twenty years ago Azerbaijan was part of the Soviet Union and we had a zero percent in our economy of market economy segment. Today market economy is eighty five percent in our growth domestic product (GDP). We use the wealth, which was generated from oil and gas, in order to invest in non-energy sector, primarily industry production. And thus today we managed to overcome the difficulties of the crisis and also the changes in oil price with minimum losses.

I can give you several figures which clearly illustrate what happened in Azerbaijan in 2009. So, GDP growth was 9.3 percent, industry production growth was 8.6 percent, inflation rate was only 1.5 percent. In 2009, despite of dramatic drop of oil prices, our sovereign oil fund accumulated more resources. These figures clearly show that our economy can tolerate such kind of unexpected developments. Of course, we have suffered from economic crisis, too, but managed to mobilize all our resources. I can also tell you that one of the important elements in 2009 was that unlike many countries in our region our national currency did not lose its value, it remained stable, and this was a big support with respect to social protection of the people.

Today`s level of oil price is acceptable for companies, consumers and countries. This level of price allows us to invest more, to find more oil and gas, at the same time it is also acceptable for consumers. The balance of interest which I referred to in my previous comment is observed now.

I hope in 2010 we will implement all the major projects which we have in mind. I can tell you that in 2009 investments in Azerbaijan in total were close to ten billion dollars which is a huge amount for our economy. In the future I think that balanced oil price will allow us to continue to develop. By the way, during the last six years Azerbaijan`s economy was fastest growing economy in the world. Total growth of economy in six years was 3 hundred percent.

So, what we have already achieved, accumulated and managed to redirect from oil into non-oil sector will allow us to continue to develop successfully.

Other speakers at the session included Tony Hayward, BP CEO, Khalid Al-Falih, President of Saudi Aramco, Peter Voser, CEO of Royal Dutch Shell, Andrew Liveris, President of The Dow Chemical, and Thierry Desmarest, Chairman of Total.

######