Azerbaijan's energy relations with Croatia focus on oil, with potential for gas expansion

Azerbaijan is solidifying its role as a crucial energy hub connecting the Caspian region to Europe, navigating global energy market disruptions with ambitious investments in oil, natural gas, and renewable energy sources. The nation is undergoing a dynamic transformation, addressing market demands while embracing the challenges of the energy transition.

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Your refineries work very well with our, as we call it, Azerbaijani light oil, because our oil is light and sweet.

In an interview, Elnur Soltanov, Azerbaijan's Deputy Minister of Energy, detailed the country's evolving energy landscape and its relationship with the European Union. He highlighted the potential for increased natural gas exports, aiming to expand from the current 12.5 billion cubic meters (BCM) to 20 BCM annually. This expansion, however, hinges on mutual commitment: Azerbaijan is prepared to invest in upstream gas fields, but requires long-term purchase contracts and financial backing for pipeline infrastructure from European partners.

Soltanov noted that Azerbaijan has historically supplied gas and significant quantities of oil to Croatia. Currently, the focus is primarily on oil, with Croatian refineries efficiently processing Azerbaijan's light, sweet crude. "Your refineries work very well with our, as we call it, Azerbaijani light oil, because our oil is light and sweet," Soltanov explained, pointing to a strong alignment between Croatian refining capacities and Azerbaijani oil characteristics.

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We are ready to invest in the 'upstream' segment, that is, in gas fields, but we need support in the form of long-term purchase contracts and certain financial support for the expansion of gas pipeline infrastructure.

The potential for increased natural gas supply to Croatia is linked to the broader European energy strategy, particularly the Southern Gas Corridor. While past agreements saw SOCAR, Azerbaijan's national oil and gas company, supplying gas to Croatia, institutionalizing and increasing these supplies depends on the success of larger European deals. Soltanov emphasized that Azerbaijan's readiness to invest is contingent on European countries fulfilling their part, underscoring the collaborative nature required to achieve these energy goals.

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We believe that if both sides do their part, we can reach the level of 20 BCM, and I think Croatia could also benefit from this process.