The government of Azerbaijan predicts revenues in 2023 to the state budget in the form of income tax on profits from oil and gas companies operating in the country under PSA contracts (Production Sharing Agreements) in the amount of 3 billion 367 million manats.
This is by 26.1% more than the target for 2022 (2 billion 670 million manats), the
conclusion of the Accounts Chamber of the Republic of Azerbaijan on the draft state budget for 2023.
According to the Accounts Chamber, the forecast revenues from income tax under PSA contracts are expected to be 492 million manats (a decrease of 53.6%). The decrease in the forecast is due to the forecast price for oil exports – $85 in 2022 against $50 per barrel in 2023.
Since this year, the Azerbaijani government has separated the country’s main gas project from other PSA contracts. According to forecasts, in 2023 revenues from the “Shah Deniz” project (operated by BP) are expected to grow by 78.5% of the planned figures for 2022. Next year, revenues to the state budget from “Shah Deniz” are planned at the level of 2 billion 875 million manats ($1.691 billion at the current exchange rate).
Table of state budget revenues from the oil sector, million manats:
|Показатели||2020г||2021г||2022 – forecast||2023 – forecast|
|Transfers from the Oil Fund of the Republic of Azerbaijan||12200||11350||11517,5||11280|
|Income tax payments under PSA contracts||603,7||1044,6||1060||492|
|Income tax payments from the “Shah Deniz” project||–||–||1610||2875|
|General receipts from the oil sector||14002,1||13536,3||15537,5||16297|
|The share of the oil sector in the revenue side of the state budget||56,7%||51,3%||53,2%||53,0%|
At the end of 2021, under PSA contracts, companies paid income tax in the amount of 1 billion 44.6 million manats (+73% of the 2020 figure) to the state budget. The average oil price in 2021 was $71.6 per barrel, while Azerbaijan’s budget for 2021 was prepared from an oil price of $45 per barrel.