State Budget within PSA Contracts Expects 475 Million Manats of Taxes

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Workers manipulate drilling equipment at the oil drilling site of the Millenium Geo-Venture company, in SoufflenheimRevenues to the state budget of Azerbaijan in 2017 on income tax from oil and gas companies operating in Azerbaijan within PSA contracts are projected at 475 million manats ($ 287 million at the current exchange rate), which is 105 million manats more than the forecast for 2016. This was reported in the budget items published on the Finance Ministry’s website.

Oil and gas companies operating in Azerbaijan within PSA contracts pay income taxes 4 times a year: in January, April, July and October.

In this case the actual payments to the state budget for the enterprise profit tax are from the actual price of oil on world markets.

From 1994 to 2015, SOCAR signed 34 PSA contracts to develop oil and gas fields. Some of them have been eliminated due to the inconclusive exploration wells, while others were unattractive because of the volume of hydrocarbons discovered. To date, profit tax is paid in six PSA contracts (two projects at sea, four – on the land).

Oil and gas companies operating in Azerbaijan under PSA contracts paid profit tax in the amount of 680.4 million manats (about $ 650 million) to the state budget in 2015. In 2014, this figure amounted to 1.1 billion manats.

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