Azerbaijan says ‘God-given’ oil and gas will help it go green

Azerbaijan says ‘God-given’ oil and gas will help it go green

Sub: IR

Sec: Places in news

Context:

• Azerbaijan will host COP29 climate conference 2024.
• Place: Absheron peninsula near Baku, the capital of Azerbaijan.

About Azerbaijan:

• Landlocked country, bounded on the north by Russia, on the east by the Caspian Sea, on the south by Iran, on the west by Armenia, on the northwest by Georgia, and on the west by Turkey (via the Azerbaijani exclave of Nakhchivan).
• Azerbaijan is known as “The Land of Fire” due to its natural gas deposits.
  • The “burning mountain”– Yanardag in Azerbaijani– is fed by underground gas rising to the surface and ignited upon contact with oxygen.
• The country has a rich history of oil and gas production, shaping its culture, politics, and economy.
• Fueled by petrodollars, Azerbaijan bolstered its military capabilities against its long-standing rival, Armenia. Last year, Baku successfully reclaimed the Nagorno-Karabakh region from Armenia.
• Baku’s Transformation:
  • The capital city, Baku, transformed from a small fishing village to a modern metropolis.
  • Oil wealth funded infrastructure and international events (Eurovision, Euro 2020, Formula 1).

Oil and gas production in Azerbaijan:

• Azerbaijan was one of the first places for commercial oil production in the mid-19th century.
• It claims the world’s first industrial onshore and offshore oil wells.
• Economic Impact:
  • Since 1991, Azerbaijan has produced 1.05 billion tonnes of oil.
  • Oil and gas revenues contribute to about 35% of GDP and nearly half of the state budget.
  • Total oil revenues since 1991: up to $200 billion.
  • Current Production and Exports
  • Natural gas production expected to increase from 37 billion cubic meters (bcm) to 49 bcm in the next decade.
  • 75% of energy exports go to European markets.
  • Azerbaijan is becoming crucial for Europe’s energy security.
• Challenges:
  • Oil reserves expected to last 20 years, natural gas reserves 50 years.
  • The government is working to diversify the economy (technology, agriculture, tourism).
• Environmental Concerns:
  • Planned expansion could lead to emissions of 781 million tonnes of CO2 annually.
  • This has prompted criticism from environmental groups ahead of COP29.
• Green Initiatives:
  • Azerbaijan aims to increase renewable energy capacity to 30% by 2030.
  • Goal to reduce greenhouse gas emissions by 40% by 2050.
  • Plans to transform Nagorno-Karabakh into a “green energy zone”.

Source: TH