REAL SECTOR

1) Production

Р°) Oil and Gas production

Oil and gas production by SOCAR in January to May 2006

Source: SOCAR

In January to May 2006 the State Oil Company of Azerbaijan (SOCAR) produced 714,400 million tons of oil from onshore and offshore fields or 11,900 less as compared 2005. The onshore and offshore oil and gas producing units (OGPU) of the SOCAR produced a total of 3.275,600 million tons of oil, or 13,700 tons (or 0.4%) down as compared to 2005.

Over the first five months of 2006 the foreign companies under the joint ventures and operating companies lifted 441,800 tons of oil, or 1,800 tons (or 0.4%) more as compared 2005.

In this period gas production amounted 2,863,2 billion cu m of natural gas, or 779.5 million cu m (or 37.4%) more than 2005. The OGPUs produced 1,591,5 billion tons of gas, or 13.3 million cu m more than 2005. JVs and OCs produced 48 million cu m of gas in this period, or 8 million cu m less than 2004. The Azerbaijan International Operating Company (AIOC) produced 1,213 million cu m of associate gas, or 763.5 million cu m of fuel more as compared 2005.

Azerbaijan has 57 oil and gas fields with 18 offshore and the rest onshore fields. The SOCAR employs 59,170 people.

b) Oil and Gas refinery

Production of major types of oil products in January to May 2006

Source: State Statistics Committee

The Baku Oil Refineries, parts of the State Oil Company of Azerbaijan (SOCAR), former Azerneftyanacag and Azerneftyag, produced 3,123,600 million tons of various oil products during January-May 2006, which is 11.3% more of the same period of 2005.

Particularly, production of gasoline grew by 7%, kerosene 7.9%, diesel fuel 14.2%, mazut 4% and naphta 16.4%. Growth was achieved in the production of lubricating oil 80.5% and oil bitumen 36.1% in January-May 2006 as compared to the same period of the last year.

РІ) Sale

In May the oil products were sold at the following prices in the world market (FOB MED (Italy)): gasoline $704.69 per ton (-$32.55 per ton against April price), jet kerosene $677.11 per ton (-$17.14 per ton), diesel fuel - $624.04 per ton (-$20.57 per ton), the price of 1 ton of mazut was $337.97 per ton (-$1.43 per ton).

Export of oil products from Azerbaijan in January to May 2006 (in ths tons)

Over 1,809 billion kW/h of electricity was generated in the system of Azerenerji JSC in May 2006, or 9.3% more than 2005.

Azerenerji announced that 1.499 billion kW/h of entire generation fell on thermo-power stations, 0.31 billion kW/h hydro-power stations.

As a result of energy exchange in May 66,722 million kW/h was imported from Russia, 37.58 million from Iran, and 21,24 million kW/h from Turkey.

Since the beginning of the year Azenerji has generated 10,806 billion KW/h electricity, including 9,355 billion KW/h generated by the thermo-power stations.

3. Chemical industry

Azerkimya state company increased production of some chemical products, particularly, caustic sodium (31.6%), propylene (69%), ethylene (68.7%), polyethylene (69.9%) and nitrogen (48.6%) in January-May 2006.

Production of major types of chemical products in January to May 2006

Source: the State Statistics Committee