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Azerbaijan’s oil and oil products - key source of its income - Azerbaijani expert

2 October 2021 14:45 (UTC+04:00)
Azerbaijan’s oil and oil products - key source of its income - Azerbaijani expert

By Trend

After Azerbaijan gained independence, oil and oil products became key sources of its income. And today the rise in world prices for oil and gas can be regarded as a factor in increasing of income, the head of the Azerbaijan Oil Research Center Ilham Shaban told Trend.

According to the expert, the price of oil in the state budget of Azerbaijan for 2021 is set at $40 per barrel.

"However, according to the report of the Ministry of Finance for the first half of the year, during this period the export price of Azerbaijani oil amounted to $62 per barrel. The subsequent rise in oil prices to $70, and in September to $80 per barrel, formed the average export price for raw materials at the level of about $65 per barrel. The exact figures can be given by the relevant government agencies. The third quarter is over, and perhaps by mid-October new information will be released," Shaban said.

The expert believes that if oil prices remain at this level, the revenues from raw materials produced at the Azeri-Chirag-Guneshli (ACG) block of fields may exceed $5 billion.

"The main government revenues from the sale of hydrocarbons come from the ACG project. Last year, production at the block decreased, but in the first half of 2021, revenues increased by about 25 percent. Oil prices were low last year (the average export price of oil in Azerbaijan was less than $42 per barrel), and production volumes were reduced to a minimum due to Azerbaijan's obligations under the OPEC + format. Thus, 34.5 million tons of oil were produced in Azerbaijan. State Oil Fund of Azerbaijan's​ revenues from ACG also fell to $3.5 billion. Revenues from the oil and gas sector as a whole amounted to $3.8 billion. In any case, the rise in oil prices has a positive effect on state budget revenues," Shaban said.

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