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Summary | Profile

Country profile: Azerbaijan

Location: Southwestern Asia, bordering the Caspian Sea, between Iran and Russia, with a small European portion north of the Caucasus range
Climate: dry, semiarid steppe
Terrain: large, flat Kur-Araz Ovaligi (Kura-Araks Lowland) (much of it below sea level) with Great Caucasus Mountains to the north, Qarabag Yaylasi (Karabakh Upland) in west; Baku lies on Abseron Yasaqligi (Apsheron Peninsula) that juts into Caspian Sea
Size: 86600 sq. km total (Land area: 86100 sq. km  Water area: 500
Population: 8,177,717 (July 2008 est.)
Languages: Azerbaijani (Azeri) 90.3%, Lezgi 2.2%, Russian 1.8%, Armenian 1.5%, other 3.3%, unspecified 1% (1999 census)
Government: republic
Capital city: Baku
Legal system: based on civil law system; has not accepted compulsory ICJ jurisdiction
Currency: Azerbaijani manat (AZN)

Country profile

Bordering the Caspian Sea Azerbaijan is capitalizing upon the Sea's sizeable, but still mostly untapped, hydrocarbon resources. Azerbaijan's real gross domestic product (GDP) grew by an impressive 31 percent in 2006, driven by growth in oil production and the beginning of natural gas production. In the next couple years favorable real GDP growth is expected, but maintaining low inflation rates as energy and transit revenues flow into the country represents a major challenge. Azerbaijan's hope for sustained economic growth rests in large part with its management of sizeable oil and natural gas resources in the Caspian Sea region, through effective management of the resulting revenue stream, and non-oil sector diversification.

After the first commercial oil flows through the Baku-T’bilisi-Ceyhan pipeline (BTC) during summer 2006 and the increasing oil production from the Azeri-Chirag-Guneshli (ACG) project, oil revenues are expected to contribute to a doubling of Azerbaijan’s GDP by 2008. Although the oil sector represented around 10 percent of Azerbaijan’s GDP in 2005, it is already projected to double to almost 20% of GDP in 2007. To manage the revenues, former president President Heydar Aliyev created a State Oil Fund in 1999, which is designed to use money obtained from oil-related foreign investment for education, poverty reduction, and efforts aimed at raising rural living standards. As of the end of 2006, the State Oil Fund reported assets of almost $2 billion, but the fund’s assets are expected to increase exponentially to $36 billion by 2010. See a recent paper in Geopolitics of Energyfor more information on the effects of energy revenues on Azerbaijan.

Energy production and consumption

Oil Gas
Production: 934,700 bbl/day (2007 est.) 6 billion cu m (2007 est.)
Consumption: 160,000 bbl/day (2007 est.) 9 billion cu m (2007 est.)
Exports: 795,600 bbl/day (2007 est.)  
Imports: 3,924 bbl/day (2004) 4 billion cu m (2005)
Reserves: 7 billion bbl (17 April 2007 est.) 849 billion cu m (17 April 2007 est.)
Major fields:

Azerbaijan - recent news

04 Sep 23
Azerbaijan: Inauguration of the Absheron gas field
On the occasion of the inauguration ceremony of the Absheron gas field, where the first development phase started production in early July 2023, TotalEnergies met with officials to discuss the Company's projects in Azerbaijan, including the launch of the second phase of the Absheron development and plans to participate in the development of the country’s renewable energy potential.
08 Aug 23
Azerbaijan: ADNOC to acquire 30% equity stake in Absheron gas field
Abu Dhabi National Oil Company (ADNOC), the State Oil Company of Azerbaijan (SOCAR) and TotalEnergies have announced a strategic transaction that will see ADNOC acquire a 30% equity stake in the Absheron gas and condensate field in the Caspian Sea.
10 Jul 23
Azerbaijan: TotalEnergies announces start of production in the Absheron gas field in Azerbaijan
TotalEnergies and its partner SOCAR (State Oil Company of the Republic of Azerbaijan) have announced the start of production of the first phase of development of the Absheron gas and condensate field in the Caspian Sea, around 100 km south-east of Baku.
06 Feb 23
Azerbaijan: Romgaz signs contract for gas deliveries to Romania
Romgaz and SOCAR TRADING, a subsidiary of the State Oil Company of the Republic of Azerbaijan, have signed a new contract for gas deliveries from Azerbaijan to Romania. The contract ensures the possibility of gas deliveries up to 1 billion cm until March 2024.
18 Nov 22
Azerbaijan: KBR Joint Venture selected to deliver first unmanned compression platform in Azerbaijan-Caspian region
KBR has announced that BP Exploration (Shah Deniz) has awarded an optimization stage engineering services contract to SOCAR-KBR for the Shah Deniz compression project in the Azerbaijan sector of the Caspian Sea. The project is in early pre-FID stage.

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