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Century’s Contract’s 14 th Anniversary & Transparency Initiative in Oil and Gas Industry

Century’s Contract’s 14 th Anniversary & Transparency Initiative in Oil and Gas Industry. Gubad Bayramov EITI Azerbaijan NGO Coalition September 19, 2008. Talking about…. Role of oil in the whole economy ; Public opinion on this ; CSO concerns on : Risks in depositing oil revenues ;

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Century’s Contract’s 14 th Anniversary & Transparency Initiative in Oil and Gas Industry

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  1. Century’s Contract’s 14th Anniversary & Transparency Initiative in Oil and Gas Industry Gubad Bayramov EITI Azerbaijan NGO Coalition September 19, 2008

  2. Talking about… • Role of oil in the whole economy; • Public opinion on this; • CSO concerns on: • Risks in depositing oil revenues; • Outcomes of absence of disaggregated reporting; • Conflicting moments in profit share scheme

  3. Volume Oil Production (million of tones)

  4. oil production in 2008/11 Source: MOED

  5. 2010-2020- what’s next in this tendency? • Staring from 2010 oil production in Azerbaijan will start decreasing. • If the volume of production in 2009 will be 420 million barrels, in 2010 this figure will be 410 and in 2015 even 250 million barrels. 2020 figures will be 110 million barrels.

  6. Oil factor in industry, figures of last 3 years

  7. Survey results among 500 people (financial support of Norway embassy)

  8. Accessibility information on oil revenues

  9. Sources for access to information

  10. Do people feel oil revenue impacts in their lives? • Only 33.28% of respondents mentioned more or less impacts from oil revenues in their lives. 16.64% of them mentioned about positive impacts, the other 16.64% mentioned on little impact. 55.08% stated that the impact is felt through huge construction works only. And 12.48% told they did not have any feeling of an oil country, oil revenues and their spending.

  11. To what extend efficient oil expenditures are? • 8.3% of respondents thought they were efficient. 41.6% were partially satisfied, while 24.96% expressed great concern and dissatisfaction on oil revenue spending. 21.8% told they had no information on this data and 4.16% were totally not interested in the ongoing process.

  12. Whom should oil revenue management be relied to? • 87.36% wanted only official structures deal with this. 45.76% of them relied on president only. 29.12% of respondents mentioned State Oil Fund, 12.48% Parliament and 12.48% government. • 8.32% mentioned NGOs and 4.16% political parties.

  13. Coalition’s activities plan for 2008 • Establishing transparency and accountability assessment of oil companies; • Advocating on disaggregated reporting by companies; • Law on State Oil Fund; • Recommendations on efficiency of oil revenue spending; • Investigation on non-oil/gas EITI in Azerbaijan; • EITI assessment in Azerbaijan and report.

  14. Concerning issues

  15. I. Impacts of international financial crisis • Bear Stearns • Societe Generale • Fannie Mae • Freddie Mac • Lehman Brothers

  16. Regions with oil money deposits

  17. State Oil Fund partners • Barclays Bank Plc (UK) • BNP Paribas (France) • Deutsche Bank (Germany) • Dresdner Bank (Germany) • JP Morgan Bank (US) • HSBC (UK) • Royal Bank of Skotland (UK) • UBS AG (UK) • Hypovereinsbank AG (Germany)

  18. Depositing Oil Money • 75.5% of State Oil Fund actives are deposited into securities. According to the information of April 1, the amount of this deposits is around 2.5 billion USD. • According to April 1 information, 244.3 million USD was given to management. 45.1% of this is held by WB, 34.45% to Deutche Asses Management, 20.45% to Clariden Leu. • Annual income rate of State Oil Fund is less than 4%.

  19. II. Company Attitude towards Disaggregated Reporting • Companies that agree: • 1) Middle east petroleum • 2) Binagadi oil company • 3) BP • 4) Shell • 5) Statoil-Hydro

  20. II. Company Attitude towards Disaggregated Reporting  Companies agreed under condition (if all companies agree) : • 1) Hess (ACG) Limited • 2) SOCAR Hasn’t replied yet: • 1) Lukoil

  21. II. Company Attitude towards Disaggregated Reporting • Disagreeing companies: • 1) Karasu operating company • 2) Petro-HongKong-Pirsaat Oil Limited • 3) Azgerneft • 4) Commonwealth • 5) Itochu oil exploration (Azerbaijan) Inc. • 6) ExxonMobil • 7) Devon • 8) Chevron • 9) Total • 10) Rafi Oil FZE • 11) Shirvan Oil • 12) Anshad petrol • 13) Apşeron  Operating 

  22. III. Profit share scheme According to information above, share of Azerbaijan Government in 2003-07 was 30%, in first half of 2008 55% and in the second 80% №dnf\5\1 -929 August 13, 2008

  23. Zero balance date

  24. CSO calculations

  25. Thanks a lot! 44 Jafar Jabbarly, Caspian Plaza 3, Baku, Azerbaijan AZ1065Phones: (+99412) 437 1320 Fax: (+99412) 437 32 40web-site: www.eiti-az.orge-mail: office@eiti-az.org

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