Energy in Azerbaijan

[londontsi]

Re: Energy in Azerbaijan

Revised Azeri budget to be based on $30 oil - c.bank chief

http://www.reuters.com/article/azerbaijan-crisis-budget-idUSL8N1534FW?feedType=RSS&feedName=bondsNews

an 19 Azerbaijan's revised budget will be based on an oil price of $30 a barrel, the country's central bank chief said on Tuesday, as the former Soviet country struggles to stave off a currency crisis.

Oil-rich Azerbaijan has been hit hard by the collapse in global oil prices to multi-year lows as energy sales account for 75 percent of government revenue.

It has been forced into devaluing its currency and has burnt through over half of its official reserves.

"After revision the budget will be based on an oil price of $30 per barrel," the central bank's Elman Rustamov told state television. Azerbaijan's 2016 state budget is currently based on an oil price of $50 per barrel.

The Azeri manat has lost about a third of its value against the dollar in the past month and central bank reserves now stand at about $5 billion.

Azeri Finance Minister Samir Sharifov said last week that the state budget would be amended and spending cut in response to the crisis.

He said Azerbaijan took in 11.6 percent less in budget revenue than it had expected last year because of the decline in oil prices.

Economic growth slowed to 1 percent last year from 2.8 percent in 2014, well below official forecasts.

The 2016 budget currently sees total government revenues of 14.6 billion manats ($9.1 billion), down from 19.4 billion manats in 2015. Spending of 16.3 billion manats is forecast, down from 21.1 billion manats last year.

($1=1.6028 manats) (Reporting by Nailia Bagirova and Margarita Antidze; Editing by Alexander Winning)

[londontsi]

Re: Energy in Azerbaijan

Azeri c.bank forex reserves stand at around $5 bln -bank chief

http://www.reuters.com/article/azerbaijan-crisis-idUSR4N150005?feedType=RSS&feedName=bondsNews

Jan 19 The foreign currency reserves of Azerbaijan's central bank currently stand at around $5 billion, the bank's head, Elman Rustamov, told reporters on Tuesday.

The central bank was ready to sell $200 million on the forex market on Monday to support the ailing manat currency but local banks bought less than this amount, he said. (Reporting by Nailia Bagirova and Margarita Antidze; Writing by Dmitry Solovyov; Editing by Maria Kiselyova)

[londontsi]

Re: Energy in Azerbaijan

Georgian Energy Minister Says Russian Gas Supplies May Increase to 20%

http://sputniknews.com/business/20160120/1033400715/georgia-russia-gas-supply.html

Georgia’s negotiations with the Russian energy giant Gazprom may lead to increases of Russian natural gas deliveries to the former Soviet republic to 20 percent, Georgian Energy Minister Kakha Kaladze said.

TBILISI (Sputnik) – Georgia imports the majority of its gas from neighboring Azerbaijan. Although Tbilisi has not acquired gas from Russia since 2007, it gets 12 percent of Russian gas as a transit fee to Armenia.

"If an agreement can be reached, we would be able to receive additional volumes of up to 20 percent when our country needs it. Of course, this is a temporary one-year agreement," Kaladze told the Rustavi 2 television channel late Tuesday.

He said the previous agreement with Gazprom expired on December 31.

Kaladze cited the "technical inability" on the part of Azeri pipelines to increase supplies as the reason for ongoing talks, whose next round is scheduled in Vienna on Wednesday.

The minister said Georgia "makes every effort" to maintain its transit status in light of Russia’s request to compensate the country monetarily for gas deliveries to Armenia in the latest talks.

Should the country lose its transit status, Kaladze said power lines would need to be stopped.

"We would have to purchase additional electricity from Russia, which would require even greater spending and affect rates, so our citizens would have to pay more."

Talks between the two countries were first held last October.

National experts and the opposition criticize the possible partnership as a precursor to the loss of Georgia’s energy independence.

[londontsi]

Re: Energy in Azerbaijan

Azeri c.bank says rumours of manat's further weakening "groundless"

http://www.reuters.com/article/azerbaijan-crisis-idUSL8N1531W6?feedType=RSS&feedName=bondsNews

Jan 19 Rumours that the rate of Azerbaijan's manat currency may tumble further to 1.8-2.0 per dollar are groundless, central bank head Elman Rustamov said on Tuesday.

"Azerbaijan's economy should adapt to today's oil prices," he said in parliament. "We have enough resources and we are able to use them in the right direction."

The official rate set for Tuesday was 1.6028 manats per dollar. (Reporting by Nailia Bagirova and Margarita Antidze; Writing by Dmitry Solovyov; Editing by Maria Kiselyova)


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This is how everything stars.

If there is no substance to the rummer why make the announcement.

.

[HyeSocialist]

Re: Energy in Azerbaijan

Azeri c.bank says rumours of manat's further weakening "groundless"

http://www.reuters.com/article/azerbaijan-crisis-idUSL8N1531W6?feedType=RSS&feedName=bondsNews

Jan 19 Rumours that the rate of Azerbaijan's manat currency may tumble further to 1.8-2.0 per dollar are groundless, central bank head Elman Rustamov said on Tuesday.

"Azerbaijan's economy should adapt to today's oil prices," he said in parliament. "We have enough resources and we are able to use them in the right direction."

The official rate set for Tuesday was 1.6028 manats per dollar. (Reporting by Nailia Bagirova and Margarita Antidze; Writing by Dmitry Solovyov; Editing by Maria Kiselyova)


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This is how everything stars.

If there is no substance to the rummer why make the announcement.

.

It's not a rumor. The blackmarket rate is already 1.8-2.0. Even at that rate, the Azeri manat is a strong currency meaning that they still have to import their goods, meaning they still have to buy dollars, meaning there will be more pressures pushing the exchange rate up. Adding currency controls only means that FDI is going to run dry for everything besides oil. Meaning if they want investment into their own country it has to come from SOFAZ. The $30bln in that fund now has to somehow both put the air breaks on the currency skyrocketing out of control, fund their budget, fill in the budget deficit, and put money into investments.

[HyeSocialist]

Re: Energy in Azerbaijan

Azeri central bank says sells $98.2 mln on FX market on Friday

Jan 22 Azerbaijan's central bank said it sold a total of $98.2 million on the foreign exchange market on Friday to support the weakening national manat currency.

The manat has lost more than a third of its value against the dollar in the past month and the central bank has burned through more than half its foreign currency reserves, which now stand at about $5 billion, trying to protect its value from low oil prices. Oil and gas account for 75 percent of the Azeri state's revenues.

(Reporting by Nailia Bagirova; Writing by Margarita Antidze; Editing by Jack Stubbs)

[/B]http://www.reuters.com/article/azerb...-idUSL8N1561X7

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Another $100mln down the tube.

[Mher]

Re: Energy in Azerbaijan

One advantage of a weakening currency is that your exports become more competitive with a lower price, while imports are more expensive, and therefore it helps domestic industries. Fortunately for us, Azerbaijan produces nothing, and has no goods to export, and 95% of its exports are energy resources .

[HyeSocialist]

Re: Energy in Azerbaijan

One advantage of a weakening currency is that your exports become more competitive with a lower price, while imports are more expensive, and therefore it helps domestic industries. Fortunately for us, Azerbaijan produces nothing, and has no goods to export, and 95% of its exports are energy resources .

A lot of these articles are addressing that as well. It seems that when they had a strong currency, it was really easy for them to import goods from Turkey and Iran instead of producing it locally. Essentially nothing developed domestically and essentially agriculture and manufacturing hardly exist in Azerbaijan. Which is really good news for us. They essentially have to restart their entire xxxxing economy, with dwindling oil money and just SOFAZ. The way they are defending the SOFAZ assets seems to signal that they have no intention of using that money to invest in their economy. Its going to be siphoned off by the Aliyev clan.

[Azad]

Re: Energy in Azerbaijan

Fortunately for us, Azerbaijan produces nothing, and has no goods to export, and 95% of its exports are energy resources .

Maybe the country can bath in crude oil while eating caviar.

https://www.youtube.com/watch?v=7m1DEW1ToYM

[HyeSocialist]

Re: Energy in Azerbaijan

“We sure that the oil price will rise again”, SOCAR Vice President for Investments and Marketing Elshad Nasirov said in his interview to Swiss SRF channel.
“The sharpest increase in oil price was recorded when the Bolsheviks occupied Baku in 1920 because ¼ of world oil were produced in Baku. We sure that the oil price will rise again”, Nasirov said.
Answering the question “Are you concerned over oil price decline?”, the Vice-President said: “Absolutely no!”.
“The oil price depends on various factors and this makes difficult to predict the price dynamics. Of course, economic issues play certain role, but there are also political factors which regulate the inter-state relations. Oil price may fall to $20, but this will not be long-term, because investment in oil sector will decrease. Today, a number of oil producing countries can produce the oil with lower initial cost. However, the supply will fall below demand”, Nasirov said.
He added that the initial cost of oil production in Azerbaijan is below $25: “As you know, we have offshore and onshore extraction of oil. Compared to oil extraction from old onshore fields, the oil extraction from new offshore fields is more cost-effective. So, the oil production in Azerbaijan costs on average $20”.
Source: SOCAR

http://www.hellenicshippingnews.com/oil-production-in-azerbaijan-costs-on-average-20/

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So, confession. It costs anywhere between $20-$25 for them to pump oil. This means that they're almost at the point where they're pumping oil for free. Thought this day wouldn't come until 2020 but here it is.