Auditor Deloitte presented the independent conclusion on the report presented within EITI on results of 2005. In 2005, 14.3 million barrels of oil were provided by the companies, Trend with reference to a governmental source.
As it was stated in the conclusion, 1.4 million barrels not included in the Companies schedule relate to the amount transferred to the Government by an extractive industry company which was not a party to the MOU. We confirmed the overall amount allocated to the Government by receiving a confirmation from Azerbaijan International Operating Company (AIOC) (BP), who is the operator of this oilfield, of the total amount allocated to the Government. 0.2 million barrels were incorrectly included in the Companies schedule and relate to the amount reported by two foreign extractive companies as profit oil payable and local market oil disposed of to SOCAR under commercial terms, stated in the conclusion.
Governments schedule 1,919,709 thousand cubic meters Companies schedule 1,779,652 thousand cubic meters. An amount of 109,179 thousand cubic meters of gas included in the Governments schedule relates to the use of different measurement units of the volume of gas received from one extractive company which is a party to the MOU. The Companies schedule did not include 21,371 thousand cubic meters of gas transferred to the Government by one extractive company which is a party to the MOU. The Companies schedule did not include 3,077 thousand cubic meters of gas transferred to the Government by one extractive company which is not a party to the MOU. As it was stated in the conclusion of Deloitte, the governments schedule includes 6,430 thousand cubic meters of gas which relates to one local extractive company which is a party to the MOU.
The finance received from the transportation was described by the government in amount of $16.5 mln while this amount in the report of the company equals $12.9 mln. Transit duties relating to the Northern Route of 0.2 mln USD were not included in the Governments Schedule but reported by the Companies. According to the auditor, these amounts were not included in the Governments schedule because they were paid to SOCAR as part of commercial activities and as such are not reportable under the terms of the MOU. Besides, a payment of $ 1.3 mln was included in the Governments schedule but it was accrued in 2004 and included by the Companies in their payments to the Government in 2004. An amount of 2.7 mln USD included in the Governments schedule relates to transit fees that were paid by two extractive companies which are not parties to the MOU. The Companies schedule includes transit duties amounting to $ 0.2 mln which represents a rounding difference.
It was described in the conclusion of Deloitte that the governments schedule which was initially submitted the EITI Committee had been incorrectly consolidated by the EITI Committee from the information submitted by the Government, due to the omission of $50 mln paid by two extractive companies who are parties to the MOU. The EITI Committee realized that they had made this error in the consolidation of the Governments schedule and that they had omitted this amount which had been reported to them by the Government. The EITI Committee submitted a revised consolidated Governments schedule which was corrected for this omission.
The difference of $1 mln relates to the amount paid to SOCAR by an extractive company who was not a party to the MOU.
According to the company, local companies extractive output of 1 million barrels relates to incorrect reporting under the MOU by one local extractive industry company of crude oil sold to SOCAR per local market prices. This is a commercial activity and is not reportable under the terms of the MOU.
The volume of the gas received within share of local companies was described in size of 0 while this amount equaled 6.43 mln cubic meters in the report of the company. This gas belongs to the local companies, however it was described in the reports as gas received by Azerbaijan from share participation in the production realized by foreign companies.
According to Deloitte, the difference of 3.5 bln AzM arose due to the fact that one local extractive company reported only the 2005 profit tax and not the 2004 profit tax paid during 2005 as required under the MOU.