Azerbaijan reconsiders oil price forecast for 2013
Azerbaijan, Baku, Oct. 10 / Trend I. Khalilova /
The Azerbaijani government increased its price forecast up to $100 amid the global processes and variability in the world oil prices. The forecasts of the state budget and the consolidated budget for 2013 have been formed on its basis, the government told Trend on Tuesday. At present macro-economic parameters and indices of the state budget for 2013 are adjusted according to this oil price forecast.
The budget package for 2013 and the next three years will be submitted to parliament up till October 15.
According to the situation on the world markets, the oil price as a result of adjustments to the forecast for 2012 was increased from $80 to $100. The Economic Development Ministry originally fixed the oil price at $80 within the macroeconomic forecasts for the next year.
However the price on Azeri Light crude oil produced at the Azeri-Chirag-Guneshli block of fields exceeds $100 a barrel.
On Oct.8, the price of AZERI LT CIF Augusta was $113.88 per barrel, or $0.28 per barrel more, compared to the previous price, according to the State Oil Company of Azerbaijan (SOCAR), which has produced light oil since 1997.
Azeri light oil is produced from the Azeri-Chirag-Gunashli offshore fields which has been developed by BP. It is directly delivered to the Turkish port of Ceyhan via the Baku-Tbilisi-Ceyhan main export oil pipeline, to the Georgian port of Supsa via the Baku-Supsa pipeline.
AZERI LT FOB Ceyhan oil price was $113.13 per barrel on Oct.8, or $0.28 per barrel more than the previous price.
Azerbaijan exports URALS oil from the port of Novorossiysk which is then delivered via the Baku-Novorossiysk pipeline.
The price of URALS (EX-NOVO) was $110.14 per barrel on Oct.8, or $0.35 per barrel more than the previous price.
The price of Brent Dated, produced from the North Sea, was $112.49 per barrel, $0.21 per barrel more than the previous price.
Despite this rise in prices, Azerbaijan continues to follow a conservative policy. It does not stand for significant increase in prices while forecasting the budget indices.
Until 2012, this figure is expected to be reduced to $ 70, but the intensified global financial crisis has affected the oil price. This led to the need to return to a more conservative approach.
The government has already earned about $ 76 billion from oil sale, of which about 45 percent were retained in the fund for future generations, and the remaining funds were used by the government for the current needs.
The ratio of the Azerbaijani State Oil Fund's (SOFAZ) transfer in the state budget income for 2003-2011 increased from 8.2 per cent to 57.3 per cent. According to the SOFAZ, as of the end of the first half of 2012, the figure was 60.3 per cent.
SOFAZ's revenues for 2012 are projected at 13.721.8 billion manat, and expenses - 10.751.3 billion manat.
SOFAZ's assets increased from $0.5 billion to $32.8 billion during 2001-2012 (30 June).
The country's government expects the growth of oil production in 2013.
"Oil production in Azerbaijan declined in 2011 and 2012 and it will increase in 2013," a source in the government said. The increase in the oil production will continue in 2014. This is connected with the completion of repair work and the construction of new wells."
However, a government source said that the factors contributing the economic growth are being changed in Azerbaijan.
"The qualitative changes begin in the process of the Azerbaijani economy's development," the government said. "The factors of economic growth are being changed. This year, the country's economic growth was not connected with the oil sector. Next year, the economic growth will also be supported by the non-oil sector."