Profit taxes from AIOC expected not to be less than $220m in 2006

Business Materials 19 December 2005 14:24 (UTC +04:00)

Upon the definition of expenses of the Azerbaijan International Operating Company (AIOC, an operator on the Azeri-Chirag-Gunashli fields) in 2006 the Taxes Ministry will be able to establish expected revenues from the AIOC in profit taxes as a result of the next year. Natik Amirov, the Deputy Taxes Minister, said that for the time being the Ministry is based on the initial calculations, which urges the AIOC to transfer no less that $220m to the public budget in profit taxes.

The calculations were made on the base of oil prices set in the public budget. The AIOC will start profit tax payment only after repayment of its all expenses. In maintenance of average oil prices at $40 per barrel in the world markets, in 2006 the AIOC is supposed to cover its rest expenses in the amount of $548.6m, as well as receive profit taxes in the sum of $880m.

The AIOC will pay profit taxes with interests of 25% in compliance with the contract. The revenues will increase if average oil prices exceed $40 per barrel.