Media Press

THE MINISTRY OF FINANCE OF AZERBAIJAN FORECASTS TWO-TIMES GROWTH IN THE STATE BUDGET EARNINGS FOR 2007

BAKU.01.10.2003.MEDIA-PRESS: The Ministry of Finance of Azerbaijan predicts two-times growth in the state budget earnings in 2007 in comparison with 2003 - up to 12 trln. Manats, - the Agency "Interfax-Azerbaijan" has given this information in the Ministry of Finance of Azerbaijan.

With this the growth in the budget earnings will be adequate to the GDP growth: by forecasts of the Ministry of the Economical Development of Azerbaijan, in 2007 the GDP will increase in 2 times and exceed 67 - 68 trln. manats", - the representative of the Ministry of Republic. By his words, in 2007 the government of Azerbaijan plans maximally reduce the budget deficiency and gradually provide the budget without deficiency. These forecasts are enough real, the official of the Ministry has noted, taking into account the increasing incomes from the oil export and economic development.

"By this period definite changes will appear in the tax policy of the Government of Azerbaijan. Especially, the Government plans by this time reducing the rate of income tax up to 20%, - the official of the Ministry of Finance has noted (since January 1, 2004 Azerbaijan intends to reduce the rate of income tax from 25% up to 24%).

By 2003 the incomes of the budget are planned on the level of 6.02 trln. Manats, expenses - 6.423 trln. Manats, the deficiency - 331 bn manats. As the Minister of the Economic Development of the Republic Mr. Farkhad Aliyev has noted, the predicted rate of the GDP for the current year in the nominal expression has been determined in 32.8 trln manats; it is expected that by results of the year the volume of the GDP will exceed 33 trln manats. By September 29 the official rate of exchange makes 4911 manats for $1.

THE GOVERNMENT OF AZERBAIJAN FORECASTS THE INFLATION BY 2.5% IN 2004

BAKU.01.10.2003.MEDIA-PRESS: The Government of Azerbaijan forecasts inflation by a level of 2.5% in 2004 and this corresponds to predictions for 2003, - the Agency "Interfax-Azerbaijan" has been informed in the National Bank of Azerbaijan.

"The supposed monetary-credit policy of the National Bank for the next year provides keeping low inflation rates in Azerbaijan, and this corresponds to the policy conducted in last years. Also the policy of the rate of exchange will be saved in 2004 - the National Bank will intend to support sufficiently stable rate of exchange and intervention on the monetary market will be mainly limited", - they noted in the NBA.

An average rate of exchange of the Azerbaijan currency related to the American dollar is forecasted by a total of 4975 manats per $1 in 2004 agains 5000 manats/$1 in 2003. The inflation in Azerbaijan made 2.5% in 2002. The official rate by September 30 makes 4910 manats/$1. In the beginning of the current year the rate made 4895 manats/$1.

FOR 8 MONTHS A MONETARY MASS VOLUME HAS GROWN BY 12.5% IN AZERBAIJAN

BAKU.01.10.2003.MEDIA-PRESS: By September 1,2003 the volume of the monetary mass in Azerbaijan made 2trln. 278.6bn manats, what is by 12.5% higher than in the beginning of the year.

As "Interfax-Azerbaijan" has been informed in the press-service of the National Bank of Azerbaijan, the monetary mass reduced by 2.3% on August of this year.

A part of ledger money in the money mass structure makes 496.9 bn manats or 21.8% from the total volume. The volume of cash makes 1trln. 781.7 bn manats (78.2%).

38 BN MANATS HAVE BEEN ALLOCATED FROM THE NATIONAL THE BUSINESS ASSISTANCE FUND

BAKU.01.10.2003.MEDIA-PRESS: Since the beginning of the year the National Business Assistance of Azerbaijan has assigned 38 bn manats for the business development.

As Media-Press has been informed in the Ministry of the Economic Development these funds were sent for financing 231 business-projects in 46 towns and regions of the Republic. The especial attention was paid to the regions of the country. So 80% of the financed projects were realized out of ranges of the capital. Besides of this, the projects, which provided the production and processing were preferred.

The projects crediting is carried out by 14 banks, which became winners of the relevant competition. Now the work on enlarging number of banks, which would be able to allocate favorable credits to businessmen. As well the allocation of 57 bn manats from the state budget have been provided for business development in Azerbaijan. In the past year above 12 bn manats have been allocated from the National Business Assistance of Azerbaijan. These funds were distributed among of 49 businessmen from 18 regions. Businessmen created 1400 job places in account of credits. During 2003 - 2005 it is provided to allocate 250 bn manats for the business development in Azerbaijan.

GOODS TURN-OVER BETWEEN AZEBAIJAN AND CHINA HAS GROWN UP IN TWO TIMES

BAKU.01.10.2003.MEDIA-PRESS: The goods turn-over between Azerbaijan and China made $86 for first seven months of the current year. In spite of that this rate is not high in total and do not show the cooperation potential of two countries, a growth of the turn-over is significant - in two times in comparison with the past-year period. The Ambassador of China Mr. Chjan Siyun has made this rates available on the reception devoted to the 54th Anniversary of foundation of the CPR.

"Now about 20 Chinese companies operate in Azerbaijan, which invested about $100 MM in the economy of the country", - the diplomat has told. By his words, Azerbaijan and China remain reliable partners in bilateral as well in multilateral levels, "especially in questions related to wholeness of both the country", - Mr. Chjan Ciyun has emphasized.

THE REGIONAL TRAINING CENTER OF THE WORLD CUSTOMS ORGANIZATION HAS OPENED IN BAKU

BAKU.01.10.2003.MEDIA-PRESS: The regional training-center of the World Customs Organization has opened in Baku. As the Chief of the SCD of Azerbaijan Mr. Kyamaletdin Geydarov has noted, the "training center of the State Customs Department will also operate in this regional center. For several years 4 - 6 training courses have been organized here. Courses of qualification improvement are conducted on their base. However, the World Customs Organizations will be able to conduct these courses",

The President of the World Customs Organization Mr. Mishel Dane, who took part in the ceremony marked the necessity of reforms conduction in the customs system of Azerbaija, especially in relation to revising rates of custom duties. "Taking into account the fact that Azerbaijan is in the war state, reforms may be carried out stage by stage. It is necessary to understand that changes in the tax and other regulations are required for reduction of customs duties", - he has emphasized. Mr. K. Geydarov and Mr. Dane took part in the opening of the Cynology Center of the SCD.

FOR 8 MONTHS THE VOLUME OF THE CARGO CARRIAGES IN AZERBAIJAN HAS MADE 71.5 MM TONS

BAKU.01.10.2003.MEDIA-PRESS: For 8 months the volume of cargo carriages in Azerbaijan has made 71.5 MM tons - by 11.5% higher than for the same period of 2002.

By data of the State Statistic Department of Azerbaijan, 52.4% of cargos were carried by car, 19.1% - by railway, 16.2% - by the main pipelines, 12.3% - sea transport. A part of the private sector in the cargo deliveries has made 55% or 39.3 MM tons.

The volume of cargo carriages by cars has made 37.5 MM tons (a growth of 7.7%); by railway - 13.7 MM tons (19.8%); 8.8 MM tons have been transported by sea transport.

The Baku International Marine Trade Fleet and other enterprises of the maritime transport executed shipment - unloading works by a total of 6.6 MM tons or by 15.1% more than for the analogous period of the past year. A part of the private sector made 2.5 MM tons.

In accordance with the forecast for 2003, the volume of cargo carrages in Azerbaijan will make 105.3 MM tons, the part of the private sector will make 58% of deliveries.

THE 9TH AZERBAIJAN INTERNATIONAL EXHIBITION OF THE TELECOMMUNICATIONS AND COMPUTER TECHNOLOGIES WILL OPEN IN BAKU

BAKU.01.10.2003.MEDIA-PRESS: Today in Baku the 9th Azerbaijan International Exhibition of TV communications and computer technologies "BakuTel-2003" will open. 68 companies from 12 countries - Azerbaijan, Hungary, Germany, Israel, China, Norway, UAE, Russia, Slovenia, USA, Turkey, Ukraine, Finland and France take part in it. The exponents demonstrate their achievements in the field of TV communications and information technologies, communications and as well the safety system, software, etc.

"Round tables" on the information-communication technologies with a participation of about 200 officials and experts from other countries will be organized. They will analyze processes within frameworks of the ICT in Azerbaijan, discuss on their understanding and foreseeing the further development of this field, possibilities of enlarging and deepening of cooperation between Azerbaijan and international organizations, particularly with the International Electric Communications Unit

For last 10 years $465 MM were invested to the TV communications sector of Azerbaijan. The investments volume for 2001 - 2005 will make $870 MM. $261 MM (about 30% from total volume) will be delivered in account of inner funds of the Ministry of the Communications, $483 MM (56%) will be attracted in account of foreign investors, the rest part - $126 MM (14%) - credits. During the next three years the density of the phone supplying in the country will be increased up to one number per five persons and this will make totally 1.750 MM clients of the phone network. By 2004 all Republican TV communication networks will become digital. Bu the end of the year, a number of mobile communications clients will exceed 1 MM persons in Azerbaijan. Azerbaijan stands on the first place on a number of such clients related to the population number among of the other states of the CIS.

THE MAJORITY OF THE AZERBAIJAN ELECTORS REQUESTED BY THE SOCIOLOGISTS PREPARE TO VOTE FOR REPRESENTATIVES OF THE GOVERNING PARTY ON ELECTIONS

BAKU.01.10.2003.MEDIA-PRESS: The majority of electors, which took part in the sociological opinion poll conducted by the Analytical Information Center and pol "Sel" in two towns of Azerbaijan - Baku and Sumgayit - are ready to vote for the present President of the country or his son, the Premier Mr. Ilham Aliyev. According to data of the poll, 65.9% of polled expressed their sympathies for their candidatures.

The most real competitor in the President Elections, the leader of the opposition Party of the National Independence Mr. Etibar Mamedov has got only 9.5% of votes. The rest candidates have been arranged by following order: Mr. Isa Gambar ("Musavat" Party) - 8.4%, Mrs. Lala Shovkat (independent candidate) - 7.5%, Mr. Sabir Rustamkhanli - (from the Civil Solidarity Party) - 4.2%.

UZBEKISTAN IS NOT ABLE TO JOIN TO THE PROJECT BAKU - TBILISI - ERZURUM, THE CHIEF OF THE STATE OIL COMPANY OF AZERBAIJAN DECLARES

BAKU.01.10.2003.MEDIA-PRESS: Uzbekistan will not be able to join to the project of the construction of the South Caucasus gas pipeline Baku - Tbilisi - Erzurum, the President of the Stated Oil Company of Azerbaijan (SOCAR) has declared in his commenting the declarations of the Georgian officials about a possibility of Uzbekistan's joining to the project.

"I do not understand ways of this joining. The gas pipeline will be constructed within frameworks of the first stage of the development of the field "Shakh-Deniz" and this project has its shareholders. There are possibilities of the joining only in a way of repurchasing of a shard of shareholders", - "Interfax-Azerbaijan" quotes Mr. N. Aliyev. The Chief of the SOCAR thinks that however this does not solves of problems as relevant trade agreements on gas sale-purchase, transit, etc., should be available.

By his words, the negotiations only may be conducted on the Uzbekistan gas deliveries to Georgia. "There are two ways for this - one through Russia and the other - through Azerbaijan. We have old main gas pipeline, by which gas was delivered to Georgia in the Soviet times. For a long time it was not used and did not fit to operation. However, it is repaired, so Uzbekistan may use it by its intension in condition of paying out the relevant transit tariff, of course", - Mr. N. Aliyev has emphasized.

In his turn, in his interview to Media-Press the Ambassador of Georgia in Azerbaijan Mr. Zurab Gumberidze disproved the information on conduction of negotiations with the official Tashkent about a possibility of joining of Uzbekistan to the pipeline Baku - Erzurum. "The point is not about joining of Uzbekistan to the pipeline Baku - Tbilisi - Erzurum, but the interest of this country to the transport and energetic corridors, which pass through territories of Azerbaijan and Georgia. The point is about strengthening of this corridor by those countries, which are interested in this. In the next time the visit of the President of Uzbekistan Mr. Islam Karimov to Georgia will be held and we shall show our achievements in development of these transport corridors to him", - the Ambassador has said and added that if this idea receives the further development, certainly it will not be discussed without participation of Azerbaijan.

ON OCTOBER SALYAN OIL WILL START A DRILLING OF 2 EXPLORING WELLS ON THE FIELD GARABAGLI IN AZERBAIJAN

BAKU.01.10.2003.MEDIA-PRESS: On October the Operation Company Salyan Oil will start drilling of two exploring wells on the onshore field Garabagli in Azerbaijan.

As the Agency "Interfax-Azerbaijan" has been informed in the Office of the company, "now the preparations for exploring drilling are conducted. The precise terms have not been determined, most likely this will be the end of October".

The project depth of wells will make 5300 - 5500 m, drilling will be conducted in the northern part of the field up to opening of 13 - 15 horizons. It will be the second and third exploring wells, drilled by the company on the field. The first one was drilled in the last year up to the project depth of 5500 m.

By 2003 the company planned drilling of 18 working wells, four of them had been drilled. It is expected that in result of the operating drilling the oil production will increase up to 500 thou tons per a year, and not it makes 365 thou tons.

The contract on development of the fields Kyursangi-Garabagli was signed on December 15, 1998. The Operation Company Salyan Oil has been created on May 12, 1999. The State Oil Company of Azerbaijan (SOCAR, 50%) and the Chinese companies CNODC and CNPC (each one by 25%) are the main shareholders of it. A total volume of investments has made $115 MM.

The fields are located in the Salyan Region of Azerbaijan, in 140 km from Baku. Still before the signing the contract "Kyursangi - Garabagli", the SOCAR started a drilling of the exploring well on the field Garabagli, however it brought not only up to mark of 4500 m, though initially planned to drill more. At the present time this well was preserved and the operating do not make any plans in respect to it. The company do not except its operation as the operating one.

ON OCTOBER SALYAN OIL WILL START A DRILLING OF 2 EXPLORING WELLS ON THE FIELD GARABAGLI IN AZERBAIJAN

THE PRICES FOR OIL HAVE BEEN ESTABLISHED BY A TOTAL OF $20 FOR A BARREL IN THE AZERBAIJAN STATE BUDGET-2004

BAKU.01.10.2003.MEDIA-PRESS: The price for oil has been established on a level of $20 for one barrel in the state budget-2004 of Azerbaijan. The authors of the state budget project apply repeatedly similar practice when a price for oil is established lower than possible average world one, In the budget of Azerbaijan for 2003 it was provided by a level of $19.5. In accordance with considerations, this would allow to save the budget from sharp prices fall. However, in a case of favorable prices, the budget would receive supplementary means. For example, for the first six months of 2003, Azerbaijan managed to earn complementarily $10 MM in account of oil exports.

As the leading economist of the European Reconstruction and Development Bank of Azerbaijan (EDRB) Mr. Villem Byuiter considers, probable fall of the world prices for oil is able to make unfavorable effect on the production and export of the crude hydro carbonates on the territory of the former Soviet Republics, especially in Kazakhstan and Azerbaijan. The experts of the ERDB note that for past several years inflow of the private capital to the CIS has occurred in form of the direct investments and was directed in the first turn to regions rich by the natural resources, for example to Kazakhstan or Azerbaijan.

By their opinion, in 2003 the total growth of the economy of the countries of the CIS will make 4.5% and this a little lower than in the past years. Well rates will be achieved by Azerbaijan and Kazakhstan in this financial year: a growth will make 9% or 7.5% correspondingly in account of the energetic sector. By data of the ERDB the high prices for oil in Azerbaijan, 2002 promoted to the growth of the GDP up to 10.6%. In spite of this, the country as before depends still from the oil and gas production fields in the significant degree.

The State Oil Company of Azerbaijan is the largest tax payer in the country. In 2002 the assignments of the SOCAR to the state budget made almost 75% of all tax earnings from the total tax funds from the state enterprises. In the current year the State Oil Company should pay out 1trln 862 bn manats or by 202 bn manats more than in the past one. Correspondingly, for the next year the Ministry of Finance plans that the assignments of the SOCAR to the state budget will grow by 18% up to 2.2 trn. Manats.

IN SPITE OF INTENSIONS OF OPEC, RUSSIA, NORWAY AND MEXICO DO NOT PLAN REDUCTION OF OIL PRODUCTION

BAKU.01.10.2003.MEDIA-PRESS: The Organization of the petroleum exporting countries (OPEC) hopes that Russia, Mexico and other independent producers will reduce oil production by 500 thou bbls per a day since November 1, the Minister of Energy of Indonesia Mr. Purnomo Yusdjiantoro, which will be appointed to the post or Chief of the World Oil Cartel since the beginning of the next year, has declared this. As it has been known, the world cartel will produce by 900 thou bbls of oil less since November 1 to escape excessive production in result of deliveries from Iraq. By the words of Mr. Purnomo Yusdjiantoro, quoted by the Agency Bloomberg, Russia, Mexico, Angola, Suria, Egypt "should want to take part in the reduction of the production". However, the experts doubt very much that independent producers will support the actions of the OPEC. So, the Minister of Oil of Angola Mr. Octavio da Silva has declared that his country do not see a necessity of the production reduction in this year. Oslo occupies the similar position. "Norway will not follow the OPEC and reduce volumes of production and export of oil for maintenance of high prices on the world energetic markets, - the Minister of Energy of Norway Mr. Eynar Steensnes has said. - There is not any sense in reduction of the oil quotas, as the prices for oil are within frameworks of pricing corridor worked out by the OPEC and there are not any signs of their intention to overcome it. If the price for oil falls lower than $20 for a barrel, then Oslo seriously will revise its oil quota oil policy", - Mr. Steensnes has noted.

Mexico is one of the largest independent oil exporters as Russia and Norway; it has declared that it is solidary with the OPEC in plan of reduction of oil quotas by the cartel. However, its support is concluded only in that it will not increase the oil production and export, remaining all at the old level of 1.88 MM bbls per a day. As to the position of Russia, at the last week the President of the RF Mr. Vladimir Putin has declared that Russia is interested in the extremely high prices for oil and confirmed that the Russian side will not allow the fall of prices for power carriers, as in difference of other petroleum producing countries, we extremely are troubled by a necessity of the growth in processing sector of the Russian economy", - Mr. V. Putin has said in his speech in New-York in the Columbia University. Talking about the cooperation with the OPEC, Mr. V. Putin has emphasized that Russia "coordinates its activities" with this organization, "however does not plan joining in it".

IRAN PROVIDES AN OPPORTUNITY OF EXPORTING UP TO 120 THOU BBLS OF OIL PER A DAY THROUGH ITS TERRITORY TO KAZAKHSTAN

BAKU.01.10.2003.MEDIA-PRESS: Tehran has declared about his readiness to provide an opportunity for exporting up to 120 thou bbls of oil per a day through the Iranian territory to Astana. By information of the journal "Petroleum" an agreement on this was achieved at the recent meeting of the Minister of Transport of Kazakhstan Mr. Kajmurat Nagmanov and Iranian colleague Mr.Akhmad Khorram in Tehran. By opinion of the Iranian experts, since Kazakhstan starts the active production of the hydrogen carbonates in the Caspian Sea, the transit potential of Iran certainly will appear in the center of attention of traders. Already since the beginning of 2006 it will be possible to pump annually up to 40 MM tons of oil (the significant part of it will be delivered from Kazakhstan) with using available capacities on the Iranian territory. On the base of this prediction, the official Tehran worked out the gradual scheme of receiving "the large" Kazakhstan oil. Its realization cost makes about 500 MM dollars. Within frameworks of given scheme still three years ago, Iran started modernization and enlarging up to 400 thou bbls per a day processing capacities of the Tehran and Tebriz OPP. The necessity of reconstruction has been caused by that the installations at these enterprises did not allow qualitatively clean the sulphurous Kazakhstan and Turkmen oil.

Simultaneously the International Consortium including the National Iranian Oil Company (NIOC), the Chinese National Petroleum Company (CNPC), the Hong Cong Sinopec Group and Sweden Vitol started the construction of new terminal and oil bulk pier in the Iranian port Neka. The total cost of the contract is estimated by 105 MM dollars. On the second stage the construction of supplementary pump stations is supposed and this will allow the capacity of the oil pipeline Neka - Tehran - Tebriz in 2004 up to 370 thou bbls per a day. Within frameworks of the third stage (2005 - 2006) it is planned to increase its capacities up to 540 thou bbls per a day. The cost of the project will increase up to 360 MM dollars.

After foundation of the relevant transport structure, Tehran appealed to the Caspian countries with suggestions on oil deliveries for further processing on the Iranian OPP. As the Deputy Minister of Transport of the IRI Mr. Golamreza Khansari, since 2003 Iran intends to increase oil import volumes from Kazakhstan and Russia in 4 - 5 times. Especially, the Russian "LUKoil" plans to deliver up to 1 MM tons of oil to Iran before the end of the current year. In perspective "LUKoil" intends to increase annual deliveries to Neka up to 5 MM tons. Today Kazakhstan delivers up to 20 thou bbls of oil per a day to the North of Iran. It is expected that in the next years the volumes of deliveries from Kazakhstan by replacement scheme will be increased significantly; especially as there are not particular technical limitations for deliveries of the Kazakhstan oil to the oil terminals of the Persian Gulf.

FOR 8 MONTHS OF THIS YEAR, 2.94 TRLN MANATS ($598.6MM) OF CREDITS WERE INVESTED TO THE AZERBAIJAN ECONOMY

BAKU.01.10.2003.MEDIA-PRESS: By the data of the National Bank of Azerbaijan (NBA), for 8 months of the current year 2.94 trln manats ($598.6MM) of credits were allocated in the economy of the country. As the press-service of the NBA informed Media-Press that 74.6% of credits (2.2 trln manats or $447.9 MM) are short-term and 25.4% (747.6 bn manats or $152.2 MM) are long term.

Within frameworks of the total credit investments 1.24 trln manats ($252.4 MM) were invested in the state banks, 1.35 trln. Manats ($274.8 MM) were invested to private banks and 338.9 bn manats ($69) - to out of bank credit organizations. The volume of credit investments to different fields of the economy are following: 21.56% of credit funds were invested to the trade and services field, 12.07% - transport and communications development; 4.3% - energy and natural resources development; 5.57% - the agrarian sector. The heavy and light industry - 8.46%; the construction - 7.37% of credits; credits to the physical persons made 27.3%. 64.78% of all credits were allocated in the foreign currency.