No plans to cut oil output: SOCAR boss
Azerbaijan has no plans to reduce its oil
production, Rovnag Abdullayev, president of the state oil company
SOCAR, has said, dismissing earlier statements.
Amid a slump in crude prices on world markets, some oil-rich countries have decided to scale down oil output, with some reports suggesting the South Caucasus republic could follow suit. Oil prices are currently around $40 a barrel.
Abdullayev told reporters on Friday that the move aims to influence crude prices.
"As for Azerbaijan, it cannot exert any influence on world prices as it is not such a major producer," the SOCAR chief said.
According to Abdullayev, Russia, a huge producer and exporter of energy resources, and members of the Organization of Petroleum Exporting Countries (OPEC) may counter falls in oil prices by reducing production.
Abdullayev noted that the oil price of below $70 is not considered viable in the present conditions. Therefore, if it does not go up, producers will refrain from channeling hefty investments into the energy sector, which will, in the long run, result in an acute shortage of oil around the world.
"Therefore, oil-producing countries are contemplating how to stabilize oil prices to avoid problems in the future, i.e. to set normal, stable prices which would average at $70-80 a barrel. But, even if this indicator is not achieved, the prices should be expected at around $60-70 in 2009."
Also, Abdullayev stressed that projections of oil prices falling as low as $25 had no merit.
He emphasized that the sharp decrease in oil prices would cause no problems for Azerbaijan`s state budget. "The oil price of about $40 a barrel is not causing serious problems for Azerbaijan now, and neither will setting the price at $70 in next year`s budget."
The SOCAR president did say oil prices might change before 2009, adding that "the current price does not worry us."
The 2009 state budget, endorsed by President Ilham Aliyev last Thursday, sets the oil price at $70. Some economists and opposition representatives have come out against the measure, claiming this will cause a budget shortfall.
Abdullayev also said prices for fuel are not expected to go down in the country.
World crude prices have plunged about three-fold in recent months, bringing down prices for gasoline in a number of countries. Some industry experts argued that gasoline prices should fall in Azerbaijan, as well.
But Abdullayev said domestic fuel prices are regulated not by price levels in world markets, but by the country`s Cabinet of Ministers.
He noted that fuel prices in Azerbaijan had also remained unchanged in the past, at a time world crude prices were steadily climbing.
"Therefore, predicting a reduction in prices for gasoline here in light of the falling oil prices in world markets would be wrong," Abdullayev added.
Amid a slump in crude prices on world markets, some oil-rich countries have decided to scale down oil output, with some reports suggesting the South Caucasus republic could follow suit. Oil prices are currently around $40 a barrel.
Abdullayev told reporters on Friday that the move aims to influence crude prices.
"As for Azerbaijan, it cannot exert any influence on world prices as it is not such a major producer," the SOCAR chief said.
According to Abdullayev, Russia, a huge producer and exporter of energy resources, and members of the Organization of Petroleum Exporting Countries (OPEC) may counter falls in oil prices by reducing production.
Abdullayev noted that the oil price of below $70 is not considered viable in the present conditions. Therefore, if it does not go up, producers will refrain from channeling hefty investments into the energy sector, which will, in the long run, result in an acute shortage of oil around the world.
"Therefore, oil-producing countries are contemplating how to stabilize oil prices to avoid problems in the future, i.e. to set normal, stable prices which would average at $70-80 a barrel. But, even if this indicator is not achieved, the prices should be expected at around $60-70 in 2009."
Also, Abdullayev stressed that projections of oil prices falling as low as $25 had no merit.
He emphasized that the sharp decrease in oil prices would cause no problems for Azerbaijan`s state budget. "The oil price of about $40 a barrel is not causing serious problems for Azerbaijan now, and neither will setting the price at $70 in next year`s budget."
The SOCAR president did say oil prices might change before 2009, adding that "the current price does not worry us."
The 2009 state budget, endorsed by President Ilham Aliyev last Thursday, sets the oil price at $70. Some economists and opposition representatives have come out against the measure, claiming this will cause a budget shortfall.
Abdullayev also said prices for fuel are not expected to go down in the country.
World crude prices have plunged about three-fold in recent months, bringing down prices for gasoline in a number of countries. Some industry experts argued that gasoline prices should fall in Azerbaijan, as well.
But Abdullayev said domestic fuel prices are regulated not by price levels in world markets, but by the country`s Cabinet of Ministers.
He noted that fuel prices in Azerbaijan had also remained unchanged in the past, at a time world crude prices were steadily climbing.
"Therefore, predicting a reduction in prices for gasoline here in light of the falling oil prices in world markets would be wrong," Abdullayev added.
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