Europe / Caspian / CIS

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 sq.km)

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)

Licensing:

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

13 Jul 24	Azerbaijan: Saipem signs framework agreement with bp for offshore activities in Azerbaijan Saipem has announced the signing of a framework agreement between BP Exploration (Caspian Sea) and a consortium composed of Saipem Contracting Netherlands, BOS Shelf and BOS Shelf International. The framework agreement entails the execution of offshore activities in the Azerbaijani waters of the Caspian Sea operating the SCV Khankendi, a state-of-the-art vessel owned by the Shah Deniz consortium and specifically designed for subsea construction.
17 Jun 24	Azerbaijan: Baker Hughes awarded multi-year contract to help Azerbaijan maximize well productivity Baker Hughes has announced an award from the State Oil Company of Azerbaijan Republic (SOCAR) to employ its electric submersible pump (ESP) technology and automated field production software solution, Leucipa, in the nation’s oilfields.
05 Jun 24	Azerbaijan: MVM Group acquires a stake in the Shah Deniz offshore gas-condensate field Hungarian state-owned MVM Group has entered into a sale and purchase agreement with the Azerbaijani state-owned entity Southern Gas Corridor for the acquisition of a 5% stake in the Production Sharing Agreement for the Shah Deniz gas-condensate field offshore Azerbaijan and a 4% stake in Azerbaijan Gas Supply Company, established for the marketing and sale of natural gas produced from the Shah Deniz gas-condensate field.
17 Apr 24	Azerbaijan: bp begins oil production from major new platform offshore Azerbaijan bp, as operator of the Azeri-Chirag-Gunashli (ACG) project, has announced the start-up of oil production from the new Azeri Central East (ACE) platform as part of the ACG field development in the Azerbaijan sector of the Caspian Sea.
04 Mar 24	Azerbaijan: WindEurope and Azerbaijan join forces to accelerate wind energy WindEurope and the Azerbaijan Renewable Energy Agency have signed a Memorandum of Understanding (MoU) to advance the deployment of onshore and offshore wind energy in Azerbaijan and the wider Caspian Sea area.