BP – surviving in a USD50 oil barrel world

Addressing the plummet in oil prices in recent months at the BBG monthly meeting, BP’s Chief Procurement Officer Wilbert Long said there is no one single projection that people are aligning to about the future.“Are we in a v-cycle or a u-cycle? I can even ask if we are in an up-and-down cycle. People are divided on this,” he addressed attendees at the Hyatt hotel, 27 April 2015.

“We’re fortunate that we had a four years of USD100 dollar oil, and I think we became complacent. We and this country were living very well. Now, with the drop, the people, the country and us as a company are feeling it. We have to change ourselves and say, if we’re a leading company what should we be doing?

“We need to position ourselves to be able to thrive and survive in a USD50-barrel world now, re-baseline the organisation, and do whatever it takes to get us there, and maintain the discipline. So, if oil does go back to USD100, we shouldn’t change, we should maintain the discipline.”

He compared this strategy to Axon, pointing out that despite the decline, the company isn’t making an awful lot of changes in the way they operate day to day. “That’s something that that we are going to have to do and are doing right now,” explained Wilbert.

BP has worked with 1600 British companies in this region (Azerbaijan, Georgina, Turkey) during last 10 years. “British companies have been very, very instrumental in what has transpired in the region. You’re extremely important to us, and certainly you will continue to be important to us in the foreseeable future.”

British Embassy Update

New Deputy Ambassador Stephen McCormack addressed the BBG for the second time since arriving at post, and gave a brief rundown on the activities and events that the British Embassy is organising over the coming month:

13 May: Crisis training exercise in preparation for Baku 2015

31 May: Visit by the Lord Mayor of London Alderman Alan Yarrow to promote UK financial services.

2 June: Caspian Oil and Gas Show (COGS) reception

10 June: Queen’s Birthday Party (QBP)

COGS and the QBP are the British Embassy’s annual flagship events. Sponsorshop is still available so if you would like to have your name associated with the British Embassy please contact Head of the Commercial Section Jacqui Mullen Jacqui.Mullen2@fco.gov.uk

If you would like to attend a meeting or wish to become a sponsor, please contact Chairman John Patterson, jpatterson@i2offshore.net

PwC celebrates 20 years in Azerbaijan

Speaking at the JW Marriott Absheron Hotel on Wednesday 1 April, PricewaterhouseCoopers Country Managing Partner Movlan Pashayev announced the firm’s latest milestone: 20 successful years in Baku. He touched on the challenges during the course of that time, which the firm has overcome to comprise the strong, 100+ workforce it is today.

As Azerbaijan weathers two interrelated crises – the significant drop in oil prices and the Russia-Ukraine conflict – which have been shrouded in uncertainty, Movlan wanted also to share some thoughts about the current status of the economy and what businesses can expect for 2015:

“In our opinion the government is yet to take action, to diversify the economy and use the opportunity to create more jobs.

“How is the central bank going to save the banks [after the devaluation of the manat]? It’s one of the biggest issues on the agenda. I think we are going to see a few more banks going bankrupt this year.

“A second issue is the major drop in confidence. The trust in the stability of the financial system, from businesses and the general population, has faded quite significantly.

“Sales of apartments has caused a lot of controversy: If you own an apartment but haven’t lived thee for more than three years then you will be taxed on the difference between the sale price and the purchase price. The question is, what is the purchase price?

“We’ve also seen tightening of immigration, in particular when it comes to short-term business trips. If you do not fit in to to one of eight specified industries – retail and consulting, for example, are excluded – by decree you are liable to obtain a permit, even if you are visiting for just one day.”

As there are crackdowns in some areas, elsewhere doors are opening: “A lot of opportunities will come from Turkmenistan. Certainly politically, related to the diversifying of energy resources due to the Russia-Ukraine conflict. We have already seen some signals that Turkmenistan is starting to open up. I think it’s a good place to start expanding.”

 

British Embassy News

Deputy Ambassador Adrian Lee, whose three–year posting is coming to an end, gave his final BBG speech. He summised some good news: “We had the final visit of the Prime Minister’s Trade Envoy Charles Hendry, during which an agreement was signed between the government of Azerbaijan and the British government on a joint economic trade mission. I hope will give a positive mood for all our trade interests. It’s a really good success.”

Adrian also gave dates for a busy April ahead:

8-12 : British Film Festival (spring)

11-12: British Education Fair

13-15: Visit by UKTI energy officials

On healthcare, Adrian announced that from 6 April there will be a change in eligibility of healthcare for British visitors the UK. Any visitors staying for more than six months will now have to pay for their health care.

Lastly, Adrian thanked the BBG for having him, and asserted how relevant and important he has come to find the BBG over the years: “The first time I came I thought, we have a nice meal, we are entertained by John…. After three years I can see the real value added to the business world in Baku. I can tell by the number of people that attend, the number of business cards that get exchanged, and by the energy that this group has that it really works well. And when we get a really informative presentation by the sponsor as we have had tonight I think it’s even better.”

New Deputy Ambassador Stephen McCormack has now taken over the position.

 

If you would like to attend a meeting please contact Membership Secretary James Onslow at azerbbg@gmail.com

If you are interested in becoming a sponsor please contact Chairman John Patterson at jpatterson@i2offshore.net

To find out more about PricewaterhouseCoopers in Azerbaijan please visit their website.

EY presents first Robin Bennett award

On Tuesday 27 May 2014 at the Four Seasons Hotel, BBG sponsors EY introduced their first annual Robin Bennett ‘smoking pipe’ award for contribution to Azerbaijan-UK business relations, in recognition of Robin’s work in Baku.

And the award goes to…

EY Country Managing Partner Ilgar Veliyev presented the award to John Patterson, current BBG Chairman since 2009 saying, “You are the face of Azerbaijan-UK business. Thank you very much for the BBG, thank you very much for your banter; please keep doing what you’re doing which is very helpful for all of us.”

“Robin did a lot for the promotion of British business people in Azerbaijan,” Ilgar explained. “His birthday is in June, and we wanted to do something to support what he was doing for many years of his life.”

Robin Bennett OBE, 1942-2011, was one of the founders of the BBG Azerbaijan, which he went on to chair for 10 years, developing the Baku business world with his sought-after experience and knowledge. He came to Baku as a Managing Partner of EY, with whom he enjoyed a long and successful career, after which he set up the Azerbaijani branch of Moore Stephens.

EY, the global tax and accounting firm known as Ernst and Young until last year is celebrating its 20th year in Azerbaijan. Partner and BBG committee member  Turgay Teymurov highlighted EY’s new branding during a light-hearted quiz as their sponsor’s presentation.

British Embassy news

British Ambassador Irfan Siddiq attended an international British ambassadors conference in London last month. One topic of discussion was the recovering economy. As part of his summary, Irfan said: “The UK now has the fastest growing economy of all G7 countries, but there is a need for us as a country to continue to work to support this economic recovery. There is a lot of focus on how we can encourage British companies to do more business overseas. You’re all already fantastic examples of success in that regard, examples that we’d like others to follow.”

June is a busy month for the Embassy, which has already hosted an opening reception for the Caspian Oil & Gas Exhibition and Conference in conjunction with the Embassy of the United States. It was attended by the Prime Minister’s Trade Envoy Charles Hendry who visited that week, meeting the president, attending the exhibition and “making sure the British presence is felt,” said Irfan.

Other delegations coming to Baku in June include London & Partners to share the legacy of London 2012 Olympic Games as Baku prepares for the 2015 European Games; the University of Cambridge in establishing a course in Turkic and Azeri Studies; and the Royal College of Defence Studies to learn about the geopolitical landscape of the country.

Irfan added: “It’s an indication of how much the British government is beginning to focus on Azerbaijan, and how much interest there is in Azerbaijan.”

The evening was led by Chairman John Patterson with ‘New Faces’ introductions and the usual mingling and networking before and after the presentation and buffet.

We ate beef Wellington and crêpes suzette washed down with Azerbaijani Fireland wine, finding a moment to tear ourselves away for a Jaleh Spa hand massage as an unexpected Four Seasons Hotel treat.

If you wish to attend the next event, or become a sponsor, please contact John Patterson at jpatterson@i2offshore.net