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AZERBAIJAN


  
  

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 7,124 6,090 5,600 102
         
GNI per capita
 US $ 810 710 650 146
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 312- (20/12/06)

Another disaster in the offing
The world has enough dreadful conflicts on its plate, which it has never worked out a satisfactory way to deal with. Another, or rather a revenant, one is brewing. It is in the benighted Caucasus, between Armenia and Azerbaijan.
The Azeris are enjoying a colossal economic boom on the back of sky-high oil prices and an abundance of the same. 
The figures given out for GDP growth beggar belief. It will be in the order of 34% this year after 26% last year. 
The proceeds to the national treasury are colossal. The president, Ilham Aliyev, has an inveterate idea of what to do with them - build up a vast army to avenge the defeat of 1992 and retrieve the 20% of Azeri territory in Armenian hands, allowing one million or more refugees to return home.
He is doing exactly what any other leader of his country would do. The situation dictates a military response. But he is not reckoning with the Machiavellian leaders of Russia.

The Moscow factor
There is nothing that the Kremlin would like better than another showdown between Armenia and Azerbaijan, in which they would make quite sure the former would win. 
It would in all likelihood disrupt oil supplies from the Caspian Sea to the West, boosting global oil prices, and revenging themselves on the renegade former Soviet states trying to escape their yoke :Georgia, Azerbaijan and Kazakstan. 
President Aliyev likes to point out that Azerbaijan has a military budget larger than the entire budget of Armenia. But he forgets that the Russians have a military budget larger than the entire GDP of Azerbaijan. That is the real point.

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Nevertheless, the militarization of Azerbaijan goes on, as the following discourse testifies:-

Vahid Aliyev: Those who treat Azerbaijan's steps for release of lands as militarization are wrong 
"The formation of the professional army will be realized step-by-step. The work concerning it has already begun in the Border Troops and other units and in the Defence Ministry, as well," President's councillor on military and security affairs lieutenant-general Vahid Aliyev told the APA. 
Noting that Azerbaijan is at war at the moment, Vahid Aliyev does not consider right to transfer all Armed Forces to professional staff completely. He said that under President's commission opportunities of Naval Forces and Coastal Security increase, material and technical base of these bodies strengthen. "The US plays great role in the modernization of Azerbaijan's Naval Forces."
Vahid Aliyev did not rule out the facts of corruption in Armed Forces and problems in the military units.
"Shortcomings are found everywhere. The Supreme Commander-in-Chief regularly gives commissions to remove these shortcomings," he said.
Vahid Aliyev expressed his position on the protests of international organizations and foreign states concerning the increase of military expenses.
"Double standards exist in the world. Those who treat Azerbaijan's steps for release of the lands as militarization are wrong. According to international juridical norms we have the right to release our lands. Our Armed Forces are being prepared for this," he said.

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ENERGY

SOCAR, McDermott sign contract for underwater gas pipelines 


Azeri state oil company SOCAR has signed a contract with McDermott Caspian Contractors (a subsidiary of C.Rey McDermott S.A) for the construction of new underwater gas pipelines connecting the Gunashli and Neftyaniye Kamni fields, according to information on the SOCAR website. 
"SOCAR President, Rovnag Abdullaev, met with C.Rey McDermott S.A. President, Robert Dison, after which the contract was signed. The SOCAR president expressed his satisfaction with cooperation with McDermott and noted that this is the first contract of its type that has been awarded to a foreign company. In turn, the McDemott chief said that his company is interested in developing cooperation with SOCAR further," the statement said. According to the conditions of the contract, McDermott Caspian Contractors is to build a 10-inch low-pressure gas pipeline stretching 18.4 kilometres, which will connect platform number four at the Gunashli field with a gas compressor station at the Neftyaniye Kamni field. In addition, McDermott will lay a 24.5-kilometre 20-inch high-pressure gas pipeline at a depth of up to 123 metres from platform No. 14 at the Gunashli field to a gas collector at the Neftyaniye Kamni field. The contract also covers the installation of a section of pipes to strengthen the pipeline and the installation of standpipes, in addition to testing work. The development of the shallow-water section of the Gunashli field has been underway since 1980. 

SOCAR calls first 2007 Azeri light tender 

Azeri state oil company SOCAR has called a tender for the next year's first consignment of Azeri Light crude oil produced at Azerbaijan's Azeri- Chirag-Gunashli (ACG) fields, a source at SOCAR said, Interfax News Agency reported.
The consignment of 600,000 barrels will be shipped from the port of Batumi on January 2-6.
SOCAR has a 10 per cent interest in the ACG project. Profitable oil is distributed among shareholders in proportion to their participation in the project. Participants in the Azeri-Chirag-Gunashli contract currently include British Petroleum - 34.1367 per cent, the US companies Unocal - 10.2814 per cent, ExxonMobil - 8.0006 per cent, Devon Energy - 5.6262 per cent, and Amerada Hess - 2.7 per cent, Japan's INPEX Corp - 10 per cent and ITOCHU Oil - 3.9205 per cent, Norway's Statoil - 8.5633 per cent, and Turkey's TPAO - 6.75 per cent.
SOCAR exported 2.753 million tonnes of oil products in January-November 2006, up 37.8 per cent on the same period of 2005, SOCAR said.
SOCAR exported 1.28 million tonnes of diesel fuel, 311,485 tonnes of gasoline, 203,881 tonnes of aviation fuel, 29,965 tonnes of virgin gasoline, 870,421 tonnes of fuel oil, 16,66462 tonnes of bitumen and 40,434 tonnes of lubricants. SOCAR exported 249,358 tonnes of oil products in November.
There are two oil refineries in Azerbaijan - Azerneftyag and Heydar Aliev Baku Oil Refinery - with the capacity to produce 22 million tonnes of oil products annually.

Oil production grows 47% to over 26m tonnes 

Oil production in Azerbaijan grew 47 per cent to over 26 million tonnes in January-October 2006, a source at the State Statistics Committee said, Interfax News Agency reported on November 20th.
The Azerbaijan International Operating Company (AIOC), which is developing the Azeri-Chirag-Gyuneshli blocs, produced 18.5 million tonnes of oil, which exceeded by 80.9 per cent last year's output. Azerbaijan produced 5.53 billion cubic metres of gas, a 20.2 per cent rise, the source said. A higher AIOC production of casing-head gas was the main reason behind the surge. The company produced 1.97 billion cubic metres of gas, which was 80.9 per cent higher than in January-October 2005.

Kazakstan, Azerbaijan partner up to supply oil and gas to Europe 

English scholar, Sir Halford John Mackinder, once said: "Who rules East Europe commands the Heartland; who rules the Heartland commands the World Island; who rules the World Island commands the World." 
Today Kazakstan and Azerbaijan are regarded by the world as an inseparable partnership. The oil and gas the two countries are rich in, as well as the countries' excellent location in the Caspian region, attract everybody's attention, New Europe reports. 
Azerbaijan's and Kazakstan's estimated oil reserves are 36 to 45 billion barrels and 102 to 104 billion barrels, respectively, and their estimated gas reserves are 46 trillion cubic metres and 141 to 171 trillion cubic metres, respectively.
Over the last year, Europe has focused its attention on Azerbaijan and Kazakstan, energy security being its top priority. The EU countries are looking for new energy sources and energy supply routes. Europe is looking at Kazakstan's oil supplies through Azerbaijan as an alternative to Russian imports.
A considerable number of European and American companies are doing business in Kazakstan and Azerbaijan. "The importance of Kazakstan and Azerbaijan in global energy security and in the development of the transport potential of the entire Eurasian region is growing each year," Kazak Foreign Minister, Kasymzhomart Tokaev, noted. This is the underlying idea behind today's cooperation between the two countries.
Kazakstan and Azerbaijan can realise their energy and transit potential through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline launched last summer, referred to as a bridge connecting Kazakstan and Azerbaijan to the West. A month before the official launching ceremony, the heads of the two states signed an accession agreement for Kazakstan to join the pipeline. And in October this year, Azeri President, Ilkham Aliyev, signed a law essentially opening the new pipeline to Kazak oil. Initially, seven to 13 million tonnes of oil per year will be delivered to Baku by tankers. With the beginning of commercial development of the Kashagan shelf field, annual oil supplies from Kazakstan will grow to 25 million tonnes. This will be possible thanks to a new pipe from Aktau to Baku that is planned to be laid on the bottom of the Caspian Sea.
"The new law on transportation of the Kazak oil by the BTC will undoubtedly facilitate the growth of goods turnover between our countries," Ambassador of Azerbaijan to Kazakstan, Lyatif Gandilov, told New Europe in Astana in an interview.
After Kazakstan's official accession to the BTC, all the statements that Azerbaijan could fill the pipe on its own are history. In May this year, at a press conference during a regular CICA meeting, Aliyev said the BTC was meant solely for the Azeri oil. At the same time, the Azerbaijan ambassador told New Europe, new and promising oil fields had recently been found in the Azeri sector of the Caspian Sea.
Apart from oil, Europe is also very interested in the gas of the Caspian region. During the now more frequent visits of high-ranking EU officials to Kazakstan, the idea of building a new trans-Caspian pipeline is discussed more often. The gas pipe will cross five countries, including Kazakstan and Azerbaijan. Even as an idea, this project is believed to be a most ambitious one. Its planned throughput capacity is 32 billion cubic metres per year, and its estimated cost is US$two billion. This idea is likely to become the focal point of discussion at an international energy forum scheduled to be held in Astana in late November. According to the Azerbaijan ambassador, the former head of the national oil company, and current Azerbaijan Energy Minister, Natik Aliev, is planning to participate in the forum.
Azerbaijan-Kazakstan cooperation is not limited to energy. "We have more than enough opportunities for our cooperation, and cannot list them all. The future of this cooperation will be discussed at the fifth session of the Intergovernmental Kazakstan - Azerbaijan Committee, which should take place early next year in Astana," Gandilov said. He also added that the Foreign Minister of Azerbaijan, Elmar Mamediarov was expected to pay an official visit to Astana early in 2007.
The three meetings will discuss the existing and new joint Kazak-Azeri projects, the success of which will strengthen the role of the Caspian tandem -- Kazakstan-Azerbaijan -- in Eurasia.

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FOOD & DRINK

ADA-Azerbaijan to invest US$65m in supermarket chain 

ADA-Azerbaijan is planning to invest more than US$65 million in the development of a chain of supermarkets in Azerbaijan before the end of 2008, the company said, Interfax News Agency reported. 
The ADA group's strategic development plan envisions the opening of at least 50 self-service supermarkets under the brand Almala, which offers products produced by Russian and Azerbaijani producers before the end of 2008, in addition to the construction of a distribution centre to support the chain's growth.
A representative of ADA said the International Finance Corporation (IFC), the World Bank's investment arm, would provide some US$18 million in financing for the project. IFC experts will also assist the company with their experience in corporate management in issues such as insurance and environmental control. ADA-Azerbaijan was founded in September 2005 by a group of Russian investors and Azerbaijani managers with the goal of setting up a modern chain of supermarkets in Baku. The group includes ADA-Tidzharet (trade operations), ADA-Nagliiet (transportation) and ADA-Mulkiyet (real estate management).

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