Accessibility links

Data On Azerbaijan's Oil Revenues Incomplete, Inconsistent

How much money is SOCAR making?

How much money is SOCAR making?

In recent years, Azerbaijan's State Oil Company (SOCAR) has reduced the volume of information in successive annual reports about its revenues, according to participants in a roundtable discussion in Baku earlier this week.

The proceedings were summarized by the Baku daily "Zerkalo" on April 15 in an article titled "Where Is Our Money Going?"

Speaking at the discussion, Zohrab Ismail of the NGO Public Union To Promote A Free Economy noted that in its annual report for 2008, SOCAR declined to list important financial indicators that figured in earlier reports, including on SOCAR's revenues from the sale and export of oil and petroleum products, and from the transportation of oil extracted by joint ventures and individual companies. It also failed to include any data on exports of gas to international markets that began in 2007.

A second participant, Gadir Ibragimli, noted discrepancies between SOCAR's statistical data and that of the Azerbaijani government and the State Oil Fund (ARDNS). He pointed out that while SOCAR gave its revenues in 2006 from oil extracted within the framework of production-sharing agreements as 924.4 million manats ($1.156 billion), the State Oil Fund put the figure at 929.9 million and the Council of Ministers at 933.7 million.

In 2007, according to Ibragimli, the discrepancy between the figures provided by those three agencies was even greater: 1.851 billion manats (SOCAR), 1.799 billion manats (State Oil Fund), and 1.860 billion manats (Council of Ministers).

Ibragimli suggested that it was in order to conceal such discrepancies that SOCAR simply omitted any data on revenues in its report for 2008.

In December 1999, then-President Heidar Aliyev decreed the creation of the Azerbaijan's State Oil Fund with the objective of ensuring that both present and future generations should benefit equally from the country's oil wealth by "improving the economic well-being of the population today, and safeguarding economic security for future generations."

Since the fund signed up to the Extractive Industries Transparency Index in 2003, it has received high praise for its commitment to transparency; the fund is the only such agency in any CIS or Eastern European state to have received (in June 2007) a UN Public Service Award.

During the first eight years of its existence, the fund spent 8.43 billion manats on infrastructure projects, including 297.9 million for the Baku-Tbilisi-Ceyhan oil-export pipeline and 26.6 million for the planned Kars-Tbilisi-Baku rail link, "Zerkalo" reported on May 13, 2009.

It has also spent 592.6 million manats ($711.6 million) on housing for Azerbaijanis forced to flee from the Nagorno-Karabakh region and seven adjacent districts during the fighting of 1991-94. It will allocate a further 80 million manats for that purpose this year.

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.