Azerbaijan, Baku, 5 March / Trend corr I. Khalilova/ The high price for Azeri Light oil and changing of the profit sharing coefficient for the high-gravity oil produced in the Azeri-Chirag-Gunashli bloc of fields (ACG) between the Government and foreign partners in ACG in 2008 will promote the tripling of revenue to the State Oil Fund of Azerbaijan (SOFAZ) in 2008, the Finance Ministry reported on 5 March.
The high-gravity oil produced from ACG is shared between the Azerbaijani Government and foreign partners on the project on the basis of R-factor envisaged in a PSA which was signed in 1994. The R-factor changes depending on world oil prices. By 2007, Azerbaijan was exporting only 30% of the oil produced from the field and its foreign partners were exporting 70%. At the beginning of this year the R-factor made up 50/50%. Given this fact and the high price for Azeri Light ($103.68/bar on 3 March), SOFAZ is expected to receive AZN 5bln of additional revenue.
In several months the R-factor will be changed from 50/50% to 80/20% (80% will go to Azerbaijan), and this will increase SOFAZ revenue to AZN 10bln from the previously planned AZN 3.609bln.
An increase in SOFAZ revenue from oil sales due to the Government's raising their share in the R-factor will decrease the profit tax of the Azerbaijan International Operating Company (AIOC - operator of ACG).
The sides to the production sharing agreement on Azeri-Chirag-Gunashli field are BP (operator- 34.1%), Chevron (10.2%), SOCAR (10%), INPEX (10%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), ITOCHU (3.9%) and Hess (2.7%). Required investments total $20bln.