KBR’s Vision for a Sustainable Energy Future in Azerbaijan

2588

KBR, Inc., a global technology, engineering, procurement, and construction company, recently celebrated 30 years of impactful operations in Baku. In an exclusive interview with Mr. Rashad Shabanov, General Manager of SOCAR-KBR, we explore KBR’s remarkable achievements, pivotal collaborations, and strategic vision for shaping the future of energy in Azerbaijan and beyond.

BY ELENA KOSOLAPOVA
AZERI OBSERVER STAFF WRITER

Question: Congratulations on the anniversary! Can you share some of your main achievements during this three-decade journey?
Answer: Thank you! You are right. KBR established its office in Baku in 1993. Just recently, we celebrated our 30th anniversary with the participation of our strategic partners, such as bp, TotalEnergies, and SOCAR. Over this period, KBR has been involved in projects in Azerbaijan with a cumulative CapEx exceeding $60 billion. We have delivered 11 offshore platforms and designed five terminals, including the Sangachal terminal next to Baku, which is one of the largest in the world. These assets in the Caspian region are performing exceptionally well and contributing to the global oil and gas market. The collaboration between British and local Azerbaijani engineers has been instrumental in strengthening engineering in the oil and gas industry in Azerbaijan.

Mr. Rashad Shabanov

Q.: KBR has played a pivotal role in the development of Caspian oil and gas fields, working closely with bp. Could you elaborate on the impact of these collaborations, highlighting in particular the significance of the new ACE platform in the Azeri-Chirag-Gunashli field?
A.: All of the offshore platforms we worked on were designed and engineered exclusively for bp, with KBR handling 11 of BP’s 12 platforms in Azerbaijan. The latest ACE project, which started in 2016, was a collaboration between SOCAR and KBR. While working on this project, with a total installation cost of $6 billion, KBR and bp made a commitment to localization, involving numerous local engineers and designers. This endeavor has significantly contributed to the growth and development of local Azerbaijani talents in the industry.

Q.: KBR’s partnership with SOCAR was formalized in 2015. How has this collaboration contributed to the growth and success of KBR’s business in Baku? Are there specific projects or initiatives that stand out in this regard?
A.: The joint venture, KBR, operates on a shared decision-making model, and has resulted in substantial achievements, as outlined in the shareholders’ agreement, with a focus on nationalization and high-level project performance. Over the past eight years, we have successfully nationalized several departments, including engineering, finance, accounting, project control, information management, and document management. As a result, more than 70% of the project work has been performed by Azerbaijani local engineers. But as they say there is always space for improvement and this is not final target we are aiming to achieve.

Q.: Can you provide insights into the strategies and programs implemented to foster local expertise and how this has contributed to the current success of KBR’s team in Baku?
A.: For KBR, the joint venture with SOCAR is more than just a collaboration; it serves as one of its operating centers, similar to the Leatherhead Operating Center in the United Kingdom. We call it the Baku Operating Center (BOC). Our primary strategy is to achieve full nationalization in the core segments of our business, supported by experts from the US and UK KBR offices. To achieve this, the company is actively investing in the training and development of its people. We engage with universities, conduct meetings with students and university management, and hire new graduates, even sending them to the UK to enhance their capabilities. Looking ahead, we plan to introduce leadership training at ADA University for our senior technical and disciplined managers. In summary, our high-level strategy is focused on growing and retaining local talent in engineering and design.

Q.: Could you share some examples of your projects beyond Azerbaijan and how the experience gained in Azerbaijan has translated into success on a global scale?
A.: SOCAR-KBR has evolved to the point where we now support KBR globally. The KBR Baku Operating Center strategically allocates resources to fill gaps in other offices around the world, including Singapore, the Middle East, and the USA. Supporting our global colleagues is a significant step change for us and represents a notable shift in our capabilities.

Q.: According to the World Economic Forum’s “Promotion of Efficient Energy Transition-2023” report, Azerbaijan is among the countries that have made the most progress in the Energy Transition Index over the last 10 years. What engineering solutions and expertise can KBR bring to address the challenges associated with energy transition in the country?
A.: The global focus on environmental issues, especially with COP-28 in Dubai and the upcoming COP-29 in Azerbaijan, underscores the importance of addressing the challenges of energy transition. KBR is actively supporting green energy, green ammonia, blue ammonia, sustainable aviation fuel, plastic recycling and hydrogen projects around the world. KBR has over 51% of the global Ammonia technology market.
In Azerbaijan, we are partnering with bp to electrify projects, such as the Shah Deniz Alpha platform and the Shah Deniz compression project, to reduce carbon emissions by incorporating more green and electric energy solutions. While these projects are in their early stages, our commitment is clear: future projects will be environmentally responsible, with a focus on green energy and electrification.

Q.: How does KBR see its role in shaping the future of energy in Azerbaijan?
A.: KBR sees itself as an ongoing contributor to Azerbaijan’s energy sector, leveraging its expertise from more than a century of global experience. KBR provides us with crucial resources, including subject matter experts, training, tools, and systems. With a younger generation taking on leadership roles, KBR’s approach reflects an increased focus on active engagement in Azerbaijan, particularly in supporting the transition to green energy. Also KBR has various new Energy technology licenses such as on SAF (sustainability aviation fuels), plastic recycling, green and blue Ammonia’s and we can provide this technology together with our engineering procurement and construction management solutions to Azerbaijan.

Q.: Looking ahead, what are KBR’s key priorities and strategic initiatives in Baku?
A.: As well as operating in Azerbaijan SOCAR-KBR has set its sights on exploring overseas markets. Top management of SOCAR and KBR are actively reviewing strategies to expand and diversify business, to support widely industrial growth and contribute to the oil and gas industry. The overall strategy represents a significant step change for SOCAR-KBR, with the goal of increasing revenues from the international market.