Azerbaijan's real gross domestic product (GDP) has greatly increased in recent years, driven by growth in oil and gas production. The hydrocarbon sector accounted for 47.3 % of GDP in 2012, a decline from the 50.2 % recorded in 2011. Earnings from hydrocarbons sales account for around 90% of total export revenue.
The country welcomes growth in other sectors to become less oil dependent. Despite efforts to diversify the economy, it is likely that energy will remain the dominant sector in coming years.
Major projects such as the Baku-T’bilisi-Ceyhan oil pipeline (BTC) to Turkey, the country’s largest oil field Azeri-Chirag-Guneshli (ACG) and the largest natural gas field Shah Deniz (SD) contribute significantly to government revenues. The development of the Trans Adriatic Pipeline (TAP) for transit of gas from Azerbaijan to Europe is an important step towards developing the gas of the ACG field.
The State Oil Fund of the Republic of Azerbaijan (SOFAZ) is one of the central components of the strategy for managing these revenues. Azerbaijan's proven crude oil reserves are estimated at 7 billion barrels and oil production amounts to more than 1 million bbl/day. The State Oil Company of Azerbaijan Republic (SOCAR) plays a major role in oil and gas production, and in managing oil and gas imports and exports.
Azerbaijan EITI is working on producing its first report under the EITI Standard. The MSG met on 10 June to approve the TOR for the Independent Administrator and the reporting templates. The revised Memorandum of Understanding was also approved at the meeting.