Azerbaijan Economy to Grow 14% in 2005 on Oil, President Says
USACC (US-Azerbaijan Chamber of Commerce)
Dec 20 2004
20.12.2004
Azerbaijan’s economy will expand 14 percent in 2005 and at a faster
pace in the following two years as the former Soviet republic triples
oil and natural-gas production, President Ilkham Aliyev said.
The nation of 8.1 million people expects to attract $4 billion in
direct foreign investment next year, accelerating this year’s growth
of 10 percent, Aliyev said. Azerbaijan’s gross domestic product last
year was $7.1 billion, 102nd in the world, above Honduras and below
Botswana, according to the World Bank.
“This mainly reflects the future oil and gas development,” Aliyev,
who turns 43 on Dec. 24, said in an interview in London. “We need
to use this opportunity of having vast oil and gas resources to bring
investment into other sectors.”
Azerbaijan, bordered by Russia and Iran, will benefit from next year’s
scheduled opening of a $3.6 billion pipeline that will carry Caspian
Sea oil from the capital, Baku, to Turkey’s Ceyhan port. A venture led
by London-based BP Plc that includes Irving, Texas-based Exxon Mobil
Corp. and Norway’s Statoil ASA is developing fields in the region, home
to as much as 4 percent of the world’s proven oil and gas reserves.
Azerbaijan, with reserves of at least 7 billion barrels, has stopped
auctioning offshore fields and is trying to attract companies to
older sites onshore, Aliyev said. Oil production, now at more than 100
million barrels a year, will at least triple in three years, he said.
The country may sell $100 million in bonds in 2005, its first such
sale, Aliyev said.
“We may start next year with some small amount to see what benefit
it brings to the economy,” the president said. “If it’s successful,
we can continue on a larger scale.”
Georgian Security
Kazakhstan officials are talks with Azerbaijan to send crude oil
through the pipeline from Baku, Aliyev said, without being more
specific. The pipeline will ship 1 million barrels a day through
Georgia, where President Mikhail Saakashvili is trying to assert
control over secessionists in South Ossetia and Abkhazia provinces.
“We are sure that the Georgian government will fulfil all its
commitments to security over their portion of the pipeline,” Aliyev
said. A separate pipeline from Baku to Georgia’s Supsa port on the
Black Sea “has been working for years without any problems,” he said.
South Ossetia and Abkhazia, each with a population of about
100,000 people, declared independence in 1992 after the Soviet Union
collapsed. Both maintain ties to Russia. Georgian forces clashed with
South Ossetian separatists in August.
“Georgia and Azerbaijan have similar problems, which are aggressive
separatism,” Aliyev said. Azerbaijan since 1993 has had a dispute
with neighboring Armenia over control of the Nagorno- Karabakh region.
Georgia in February plans to sign a military and economic treaty with
Russia to ease tensions that brought them to the brink of war this
year, Saakashvili said on Nov. 22.
source: Bloomberg