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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)

Books on Azerbaijan


 


Update No: 358 - (26/10/10)

Azerbaijan is going to be cautious
There are fears of a new war scare in the Caucasus. But there can be hopes that they are exaggerated.

Azerbaijan always did and will increase the state military budget; however, the country is facing the same economic issues as Armenia, according to ARF Dashnaktsutyun MP, a member of the standing parliamentary committee for economic issues Ara Nranyan.

“Azerbaijan, like Armenia, has diversification problems, in view of the excessive development of the oil industry in its case. Uneven territorial development causes serious issues in remote districts of the country.”

“The double increase of the Azeri military budget does not suggest their intention to unleash a war. To Azerbaijan, the consequences of a war would come at a higher price than the military operation in South Ossetia (in Georgia). Russia would always intervene upon the Armenian side. The Aliyev family prefers income from the oil industry over a questionable war,” the expert concluded.

New BP deal most enticing
Just settled in his job as BP's new boss, Bob Dudley has made his mark. A new exploration deal in Azerbaijan could put his company in the middle of a battle for the country's gas exports, confirming the basic correctness of the above analysis.

In Baku, on 7 October, Dudley agreed a production-sharing agreement that will see BP join state-owned Socar to explore and develop the Shafaq-Asiman deep-water structure, 125 km southeast of Baku. Socar says the field could hold 300bn-0.5 trillion cubic metres (cm) of natural gas. BP says its knowledge of the basin suggests the structure would hold gas, not oil.

The deal followed a heads of agreement forged in July, and its signing further strengthens BP's presence in the country: it holds a 25.5% stake in the huge, 1 trillion cm Shaz Deniz gas field; and operates the AIOC venture producing gas from it.

A new agreement between global energy company, BP, and the State Oil Company of the Azerbaijani Republic (SOCAR) was signed in early October in Baku for the exploration and development of yet another offshore gas field in the Azerbaijani sector of the Caspian Sea.

It is estimated that the Shafag-Asiman field contains between 300 billion and 500 billion cubic meters (bcm) of natural gas, plus gas condensate that may also be recovered. A production-sharing agreement (PSA) between the two partners sets up a joint venture on a parity basis with a time horizon of 30 years.

BP will handle the exploration phase of the development, and then the partners will operate it jointly after production begins. Annual production volumes have not yet been publicly estimated even provisionally, but a figure ramping up into the range of 11-14 bcm per year (bcm/y) in the final phase does not seem unreasonable.

The deal further boosts Azerbaijan's already considerable gas production prospects, which include the 16 bcm/y planned for Shah Deniz's Phase Two development, the gas in the deepwater Azeri-Chirag-Guneshli (ACG) development now being exploited for oil that flows through the Baku-Tbilisi-Ceyhan (BTC) export pipeline, and several other offshore gas fields. BP holds a 25.5% share in the consortium developing Shah Deniz Two, and the company in August increased its share in ACG to 39.8% from 34.1% with its purchase of the stake owned by Devon Energy.

In June 2008, Azerbaijan President Ilham Aliev announced new estimates of gas reserves in the Shah Deniz offshore deposit, basically doubling from 600 bcm to 1.2 trillion cubic meters (Tcm), which is equivalent to roughly a century's worth of the country's domestic consumption. He also announced a new estimate of 5 Tcm for the country's total gas reserves, including five then-new fields, these being the Apsheron, Babek, Nakhichevan, Umit and Zafar-Mashal blocks.


 

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