Energy in Azerbaijan

[Mher]

Re: Energy in Azerbaijan

Azerbaijan refuses to freeze oil production levels
Agence France-Presse on Feb 16, 2016 @ 8:36 AM

Energy-rich Azerbaijan refused Tuesday to join global producers Saudi Arabia and Russia in freezing crude output to prevent a further slide in oil prices.
"We are not planning to freeze oil production," the Caspian nation's energy ministry said in a brief statement.

Saudi Arabia, Russia, Qatar, and Venezuela agreed to freeze oil output at January levels in a bid to shore up prices after a 70 percent drop due to chronic oversupply.

The announcement marked the first move between OPEC and non-cartel producers to stem the price fall since it began falling nearly 19 months ago.

However the agreement was conditional to other major producers joining in, and the effort to bring other producers on board may prove complicated.

Oil markets were hoping for a cut, and prices soon resumed their drop. In late London trading benchmark Brent crude oil was down 64 cents to $32.75 a barrel, while the main US contract, WTI, was down 0.43 cents to $29.01.

Ex-Soviet Azerbaijan's government has said it was expecting to produce this year 40.7 million tonnes of oil -- a 2.3-percent decline compared to 2015.

Exports of hydrocarbons constitute up to three quarters of the Azerbaijan government's revenues, making the Caucasus country's economy highly dependent on global energy prices.

As oil prices have fallen to near 13-year lows the manna of petrodollars diminished, and Azerbaijan's once-booming economy quickly hit the skids, the national currency plummeted and inflation soared.

http://www.globalpost.com/article/6733764/2016/02/16/azerbaijan-refuses-freeze-oil-production-levels

[Vrej1915]

Re: Energy in Azerbaijan

Azerbaijan refuses to freeze oil production levels
Agence France-Presse on Feb 16, 2016 @ 8:36 AM


As oil prices have fallen to near 13-year lows the manna of petrodollars diminished, and Azerbaijan's once-booming economy quickly hit the skids, the national currency plummeted and inflation soared.

http://www.globalpost.com/article/67...duction-levels

1- Even children in the most remote village of Kavkaz do know by now, that azeri oil output is doomed to decline.
2- The deel to freeze concerns major player, able to produce more than they do actually. (Iran)
3- How can Baku refuse to freeze = decide to produce more, if physically they do not have the capacity, even if they wished to...?

[HyeSocialist]

Re: Energy in Azerbaijan

1- Even children in the most remote village of Kavkaz do know by now, that azeri oil output is doomed to decline.
2- The deel to freeze concerns major player, able to produce more than they do actually. (Iran)
3- How can Baku refuse to freeze = decide to produce more, if physically they do not have the capacity, even if they wished to...?

Exactly. Freezing is to freeze at current production levels. These monkeys have been going down ever since they hit the peak.

[armnuke]

Re: Energy in Azerbaijan

Azerbaijan's GDP declines by 3.3% y/y to €2.3bn in January
By bne IntelliNews February 23, 2016
Azerbaijan's GDP declined by 6.6% m/m and by 3.3% y/y to AZN4bn (€2.3bn) in January, according to the country's State Statistics Committee (Azstat).

[londontsi]

Re: Energy in Azerbaijan

Azerbaijan's GDP declines by 3.3% y/y to €2.3bn in January
By bne IntelliNews February 23, 2016
Azerbaijan's GDP declined by 6.6% m/m and by 3.3% y/y to AZN4bn (€2.3bn) in January, according to the country's State Statistics Committee (Azstat).

http://www.investinganswers.com/financial-dictionary/economics/gross-domestic-product-gdp-1223

WHY IT MATTERS:

When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Federal Reserve often attempts to stimulate the economy by raising interest rates.

[Haykakan]

Re: Energy in Azerbaijan

http://www.investinganswers.com/fina...oduct-gdp-1223


WHY IT MATTERS:

When GDP declines for two consecutive quarters or more, by definition the economy is in a recession. Meanwhile, when GDP grows too quickly and fears of inflation arise, the Federal Reserve often attempts to stimulate the economy by raising interest rates.

How exactly does raising interest rates stimulate the economy?

[armnuke]

Re: Energy in Azerbaijan

How exactly does raising interest rates stimulate the economy?

When rates rise during growth, the goal is to halt inflation.
Higher interest rate => less money supply in circulation => less inflation.

[Artsakh]

Re: Energy in Azerbaijan

When rates rise during growth, the goal is to halt inflation.
Higher interest rate => less money supply in circulation => less inflation.

Economics is not an exact science. The current world situation has nothing to do with shortage of any resources, but artificially created circumstances (now lasting almost a decade) by the big world powers, and in particular the US/West, and one of their intentions is weakening of Russia and Iran through an artificial drop in the world oil prices.

However, I generally agree. They can speak about growth, and decline in unemployment, and betterment all they want (this is concerning the US), however, one thing they can't lie about is an interest rate increase, which is supposed to imply a stabilization of the economy.

Now, let's stay on topic concerning azergayjan.

[Mher]

Re: Energy in Azerbaijan

Azerbaijan: Unemployment Rises as Economy Teeters
Feb 24th, 2016

Falling oil prices and a recent currency devaluation are spurring businesses to lay off workers in Azerbaijan. But, in a sign of the political sensitivity of the country’s economic downtown, some companies are keeping unemployment numbers under wraps.

Azerbaijan’s sudden economic plunge is forcing cuts at all kinds of enterprises, across all sectors. The list of government-connected entities that have announced layoffs include Azerenerji, the country’s largest electrical power utility; the gas-distribution network Azerigas, part of the state-run, generally cash-rich SOCAR energy company; and mobile phone operator Azercell.

In addition, seven private banks have closed over the past month after the Central Bank revoked their licenses. Culture and Tourism Minister Abulfas Garayev has even announced that “several museums will be closed because of ineffectiveness,” and warned that cultural organizations that receive government support, but post low “earnings” will be shut down.

While acknowledging job losses, some companies seem reluctant to discuss the underlying economic causes. Some attribute the layoffs to “reforms” or a “transfer [of employees] between departments.” Tellingly, numbers for the layoffs are often not made public.

In January, Labor and Social Welfare Minister Salim Muslumov stated that the government is aware of the problems posed by layoffs and will make vocational retraining available to those who lose their jobs.

So far, official data does not appear to reflect the downturn in the job market since Azerbaijan’s currency, the manat, experienced an almost 33-percent devaluation against the dollar last December. As it has for the past few years, Azerbaijan’s State Statistical Committee puts unemployment at 5 percent of the working-age population of roughly 5.8 million.

Government promises of job training and other benefits for the unemployed are ringing hollow to many in Imishli, a southern region with a population of almost 125,000, located along the Iranian border roughly 220 kilometers southwest of the capital Baku.

Imishli is the only Azerbaijani region this year that did not require government subsidies to meet its expenses. Even so, it has not escaped the collateral damage inflicted by the economic crash.

According to the regional government, 45 percent of the region’s revenue is generated by one sugar factory, part of a conglomerate that also produces limestone, plant oil and fodder. The factory, the Azerbaijan Sugar Production Association, is owned by Azersun Holding, a business operation that a report published by the International Consortium of Investigative Journalists indicated had connections to family members of President Ilham Aliyev. The president himself opened the 850-employee facility in 2006.

In December, management cut nearly 200 jobs, according to Azersun Holding spokesperson Afig Safarov, adding that those affected were sub-contractors. One laid-off worker told EurasiaNet.org the job market in the region is bleak. “Now, wherever I go for a job, I’m told to wait. … Unemployment was always a big problem here, but now it’s worse,” he said.

Even some of those who have a job complain that wages are not sufficient to keep pace with the rising cost of living. One state-sector worker in Imishli said he is unable to make ends meet on his monthly salary of 180 manats (about $115). “One should get at least $1,000 [per month] in order to be able to live in Azerbaijan. We have so many expenses,” he said. “Let’s give $115 [per month] to a minister and see how he can survive on that.”

Official data does not seem to take the sugar factory layoffs into account. As of January 2016, the latest date for which information was available, only 47 individuals were registered as unemployed in Imishli.

Until recently, profits from Azerbaijan’s abundant energy exports helped keep the issue of unemployment off the public’s radar, noted Parviz Heydarov, an economic expert at Baku’s Scientific Research Institute of Economic Reforms. Starting in 2004, Azerbaijan spent more than 50 billion manats (about $33 billion) to spur economic development in its regions. Those initiatives have had mixed results. And now, the government is not in position to spend as it once did, given that Brent crude, the international benchmark, has slipped under $33 per barrel, roughly 70 percent off its average two years ago.

Protests over the manat’s devaluation and rising unemployment have occurred throughout Azerbaijan in January.

In Ganja, the country’s second-largest city with a population of 313,200, a job fair turned into a protest on February 5 when applicants grew agitated that they would not receive job offers for one of the 750 positions reportedly available. Police stamped out the impromptu demonstration and the job fair was canceled.

To keep a lid on popular frustrations, the government is mulling fresh initiatives aimed at the agricultural sector, which employs roughly 37 percent of working-age Azerbaijanis. Azerbaijani officials are engaging Ukraine, China and Japan, among others, in discussions about various forms of agricultural cooperation.

In Imishli, an agriculturally oriented region, the government recently opened a “milk-collection facility,” co-financed with the US government, which could provide jobs for upwards of 1,200 people, Trend news agency reported. The regional government also plans to open a dairy farm that will produce cheese for export, a 20-million-euro ($21.9 million) project, News.az reported.

Even the sugar factory supposedly has expansion plans. Azersun Holding spokesperson Safarov maintains that the plant’s production rate of 1,000 tons per day will not drop, and that experts are looking for new projects to rehire those recently laid off, he said.

http://www.eurasianet.org/node/77516

[Azad]

Re: Energy in Azerbaijan

In Ganja, the country’s second-largest city with a population of 313,200, a job fair turned into a protest on February 5 when applicants grew agitated that they would not receive job offers for one of the 750 positions reportedly available. Police stamped out the impromptu demonstration and the job fair was canceled.

Maybe all the citizen of Ganja should move to Ankara permenantly for a better future. Unfortunately, rumor has it there might be some major water shortage for the city in the near future.