“We do not feel the crisis, because the costs of Azerbaijani oil extraction are not high. But our incomes have decreased. We received about $20 billion a year from oil sales. After slump of oil prices, our annual incomes decreased by $5-6 billion,” Azerbaijani Energy Minister Natig Aliyev said in his interview to Al-Jazeera Turk TV channel.
Aliyev added that oil prices are not expected to grow within a short period of time. Minister believes that in time political issues will affect the oil price just as the relationships between Iran and the West.
Asked of the TANAP gas pipeline will compete with the Turkish Stream, Azerbaijani Energy Minister said that the volume of Azerbaijani gas transported to Europe is not high. “Export of 10 billion cub.m. of gas to Europe will affect Russian gas neither from the viewpoint of quantity, nor the price. TANAP is not a competitor of Russian gas, TANAP is just the instrument. We do not see a competitive environment here.”
Commenting on the statement of Natig Aliyev, Azerbaijani Energy Minister, Ilham Shaban, head of the Caspian Barrel Centre for Oil Studies, said that in 2014 Azerbaijan exported its crude oil to the amount of $23.5 billion. Last year the State Oil Fund of Azerbaijan (SOFAZ) received only about $15.2 billion of profit from oil sales. “Minister most likely compared the incomes with the peak period – in 2011 SOFAZ received over $19 billion from the oil sales,” the expert explained.
Shaban said that this year reduction of incomes will be significant. “Considering that average export oil price will be about $60.00 per barrel, then landslide of prices against last year will constitute 40%. It is also necessary to take into account reduction of the volume of extraction in the country by more than 1 million tons. This means that SOFAZ will receive $7.5 billion from the oil sales at best,” Shaban added.
By January 1, 2015 SOFAZ’s assets totaled $37.1 billion.
