Azerbaijan’s oil and gas revenue decline

Azerbaijan saw an 11 per cent decline in their oil and gas revenue in 2012 according to findings in a recent report.

The report published on 10 July 2013 shows a decline of physical payments where taxes and fees are paid in barrels of oil.  This is not offset by a slight increase in cash payments received by the government.

Azerbaijan is required to publish such reports every year as the government implements the global standard promoting openness about revenues from natural resources, called the Extractives Industries Transparency Initiative (EITI).

According to the report, in 2011 oil receipts were 181.1 million barrels, while in 2012 the government only received 160.8 million barrels.

The physical payments in 2012 equals to a monetary value of over $18 billion before transportation and other selling costs are deducted. The figures are based on average price per barrel applied to the oil sold in the world market of US $ 112.21 as stated in the EITI report.

The equivalent conversion for 2011 gives a monetary value of $20.1 billion, based on average Brent price for that year. This represents a decline of around 11%. 

Meanwhile, the Azeri government received US $3.1 billion in cash in 2012, up from US $3.0 billion in 2011.

The Executive Director of the State Oil Fund, Shahmar Movsumov, said that the EITI report fulfills its goal of publicising data on natural resources and raising awareness among the population.

 “I believe [the] cooperative nature of country’s MSG and desire to promote greater transparency and accountability will continue this upward moment in the EITI reporting and implementation.”

A representative of the EITI NGO coalition in Azerbaijan, Gubad Bayramov, called for the 2012 EITI report to cover the oil and gas sector more deeply. He added that the civil society has not presented their opinion yet and is planning to do so later in August.