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High Oil Prices in World Market Good for Azerbaijan – Expert

Oil&Gas Materials 20 September 2007 16:04 (UTC +04:00)

Azerbaijan, Baku / Trend corr A. Badalova / Recent high oil prices in world market are good for Azerbaijan, the Director of Public Finances Monitoring Centre (PFMC), Inglab Ahmadov, said at a press conference on 20 September.

According to him, whilst the world price for oil is $60 per barrel, Azerbaijani Government will benefit more from implementation of the Contract of the Century (development of Azeri-Chirag-Gunashli fields) than its foreign partners on the contracted area. The distribution coefficient of oil income from Azeri-Chirag-Gunashli can achieve its maximum level (80%) for the Azerbaijani Government. According to the forecasts, income distribution ratio can make up 80% (Azerbaijani Government), 20% (foreign partners) in the first quarter of 2008.

According to Ahmadov, although oil production in Azeri-Chirag-Gunashli will be dropping after 2012, the total volume of oil production in Azerbaijan will remain high by 2023 owing to other fields and new technology.

In his opinion, an increase of world oil prices to $100 per barrel is possible. "That can be caused by the situation in Iran and Iraq, the situation in European and US markets, the situation in China and India, as well as Russia's policy," he said.

Dynamics of AIOC (consortium on development of Azeri-Chirag-Gunashli fields) Expenses from 1994 to 2007, in mln of $

Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln

Further Dynamics of Oil Incomes (according to IMF forecasts)

Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln
Year 2006 2007 2008 2009 2010 2011 2012
Volume of Oil Incomes (in bln of $) 2.97 5.36 15.55 19.37 19.80 18.47 16.79

Dynamics of Oil Production by AIOC

Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln
Year 2006 2007 2008 2009 2010 2011 2012
Volume of Oil Incomes (in bln of $) 2.97 5.36 15.55 19.37 19.80 18.47 16.79
300mln tons by production pick
Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln
Year 2006 2007 2008 2009 2010 2011 2012
Volume of Oil Incomes (in bln of $) 2.97 5.36 15.55 19.37 19.80 18.47 16.79
300mln tons by production pick
First 100mln tons (1997-2007) 10 years
Second 100mln tons (2007-2009) 2 years
Third 100mln tons (2009-2011) 1.8 year

400mln tons after production drop

Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln
Year 2006 2007 2008 2009 2010 2011 2012
Volume of Oil Incomes (in bln of $) 2.97 5.36 15.55 19.37 19.80 18.47 16.79
300mln tons by production pick
First 100mln tons (1997-2007) 10 years
Second 100mln tons (2007-2009) 2 years
Third 100mln tons (2009-2011) 1.8 year
Fourth 100mln tons (2012-2013) 2 years
Fifth 100mln tons (2014-2016) 3 years
Sixth 100mln tons (2016-2018) 3.5 years
Seventh 100mln tons (2019-2024) 5.5 years

Most important financial indexes of AIOC

Operational expenditures Capital expenditures Total expenditures
1995 140
1996 416
1997 619
1998 131 467 508
1999 107 212 319
2000 91 158 249
2001 81 248 329
2002 88 1172 1260
2003 90 2104 2194
2004 90 2491 2781
2005 154 2711 2865
2006 234 2477 2711
2007 (forecast) 396 2569 2965
Total 1462 14609 17446
Note AIOC expenditures in 1994 made up 22mln
Year 2006 2007 2008 2009 2010 2011 2012
Volume of Oil Incomes (in bln of $) 2.97 5.36 15.55 19.37 19.80 18.47 16.79
300mln tons by production pick
First 100mln tons (1997-2007) 10 years
Second 100mln tons (2007-2009) 2 years
Third 100mln tons (2009-2011) 1.8 year
Fourth 100mln tons (2012-2013) 2 years
Fifth 100mln tons (2014-2016) 3 years
Sixth 100mln tons (2016-2018) 3.5 years
Seventh 100mln tons (2019-2024) 5.5 years
Oil price ($ per barrel) 60 50 40 20
Internal profitability (%) 27 25 24 18
Net profit of companies 44 40 32 24
Net profit of companies (without SOCAR) 39.6 36 28.8 21.6
's Profitable oil 180 152 112 24
Profit tax 15 13 11 8
Government's total profit 195 165 123 32
's total profit 199.4 169 126.2 34.4
Total profit of project 239 205 155 56
Capital and operational expenditures 25
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