1 / 15

Shahriyar Nasirov Research Assistant ORKESTRA, Instituto Vasco de Competitividad

Analysis of Azerbaijan Oil and Gas Sector- forthcoming in Energy Policy Journal. Shahriyar Nasirov Research Assistant ORKESTRA, Instituto Vasco de Competitividad. 30 th USAEE/IAEE NORTH AMERICAN CONFERENCE October 9-12, 2011 Washington, DC. Structure.

quinlan-dominguez
Download Presentation

Shahriyar Nasirov Research Assistant ORKESTRA, Instituto Vasco de Competitividad

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Analysis of Azerbaijan Oil and Gas Sector- forthcoming in Energy Policy Journal Shahriyar Nasirov Research Assistant ORKESTRA, Instituto Vasco de Competitividad 30th USAEE/IAEE NORTH AMERICAN CONFERENCE October 9-12, 2011 Washington, DC

  2. Structure • Impact of Oil and Gas sector on Economy • Production by Type of Contract: Azeri PSAs • Government Policy: Achievements and Challenges

  3. Impact of Oil and Gas Industry

  4. Impact of Oil and Gas Industry • Oil revenues allowed the government to achieve success in reducing poverty. • Transfers from SOFAZ are an important source of revenues

  5. StateOilFund ( SOFAZ)

  6. PSA: Overview • State is represented by the State Oil Company (SOCAR) • Since then 32 PSAs have been signed between SOCAR and AIOC : 1st PSA – ACG in 1994 and 32nd PSA- Shafag Asiman • The title of the hydrocarbons remains with the state. • The State maintains management control and the contractor is responsible for the execution of petroleum operations in accordance to the terms of the contract. • The contractor is required to submit annual work programs and budgets for scrutiny and approval the State Company. • The contract is based on production sharing and not profit-sharing basis. • The contractor provides all financing and technology required for the operations and bear all the risks. • During the term of the contract, after allowance for up to a specified percentage of annual production for recovery of costs, the remaining production is split between the contractor and State. • Equipment purchased and imported by the contractor become property of the State. Service company equipment and leased equipment are exempt.

  7. PSA: AzerbaijanModel

  8. Net Back Value

  9. R-Factor

  10. RROR- Factor

  11. Total TransportCost

  12. Government policy: Main Successful Elements PSAs: Azerbaijan Model • Government guarantee for legal protection • Country’s geostrategic objectives • Lack of strong political parties • No claiming to renegotiate existing hydrocarbon contracts as in (e.g. Russia and Kazakhstan) • Attractive fiscal regime* and elimination of several restrictions

  13. Fiscal Regime

  14. Government policy: Challenges PSAs: Azerbaijan Model • Energy dependency • Lack of Regulatory Legislations • SOCAR’s conflict of interests in PSAs • Legal status of the Caspian Sea

  15. Thankyou !!

More Related