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The sides are eyeing a new oil transit agreement, which “will reflect current realities.”
According to Lavrov, both countries energy agencies and companies are working on preparing a new intergovernmental agreement.
“The agreement on Azerbaijani oil transit “Baku-Novorossiysk” had been signed in 1996 on the assumption that the pipeline would be filled 100 per cent and based on that, the tariff was established,” Lavrov said.
That condition was not met, and on May 5 Russian prime minister Dmitry Medvedev signed an order to terminate the agreement.
Transneft which is responsible for the national oil pipelines, has earlier said that over the past five years Azerbaijan has been importing twice less oil than the agreement stipulates.
That has reportedly led to significant losses, as the profit from oil transits did not cover pipeline maintenance expenses.
Lavrov stressed that the agreement suspension comes due to economic reasons, not political.
“I don’t agree to such assessment. The situation over Gabala radar station is known – we failed to agree on price. Other claims are speculations, we are not engaged in speculation” said Lavrov
Head of Azerbaijan’s Presidential Administration Novruz Mammadov said “we accept the decision of the Russian Federation as perfectly normal.”