BAKU.14.01.2004.MEDIA-PRESS: The Ministry of the Economic Development of Republic and the World Bank develop the new project on the supporting of the private sector in Azerbaijan. As Media-Press has been informed in the Baku Office of the WB, by preliminary information, the realization of the project would cost $15 MM.
As Media-Press has informed earlier, in 2003 with purposes of the further development of the private sector the number of licensed kinds of activities was reduced in 8 times in Azerbaijan - from 240 up to 40; at the same time the term of licenses has been increased from 2 up to 5 years. By preliminary results of 2003, the share of the private sector in the GDP has made about 74%; in the New Year this rate would increase up to 75%, in 2005 - up to 77%, in 2006 - up to 79.5% by the predictions of the government.
The governmental program on the development of the regions of the country provides an extension of the private sector. The project provides the development of non-oil sector in the first turn, the infrastructure, attraction of investments to the regions, foundations of new job places, development of small and middle business. The foundation of the enterprises on processing the agricultural production is the program aspect of no small importance. It would save businessmen from the necessity of exporting the agriculture products to other regions and would allow product processing on the places. At the same time such step would allow reduce a flow of the country population to the capital.

THE CREDIT BAG OF THE AZERBAIJAN MICFOFINANCING BAG WOULD INCREASE IN 2.5 - 3 TIMES IN 2004

BAKU.14.01.2004.MEDIA-PRESS: The Azerbaijan micro-financing bank (AMFB) plans to increase its credit bag in 2.5 - 3 times - from $4 MM up to $10 - 12 MM. The Chief of the Management of the Bank Mr. Tomas Englkhard has declared on the press conference devoted to the opening of the third branch of the AMFB.
By the words of Mr. Engelkhard, the AMFB has allocated about 2.5 thou credits by a total of $7.3 MM during its existence since 2002.
Since September 2003, the AMFB renders its services on the territory of the trade centers, situated in 30 km form the chief office of the bank in Baku. In the first stage clients received credits by departure of the experts from the bank to places.
At the present time the branches of the bank also operate in Baku and Sumgait. The bank plans the opening of the branch as well in Gyanja.
The European Reconstruction and Development Bank (23.75%), the Black Sea Trade and Development Bank (23.75%), the International Financing Corporation (23.75%), the German bank KFW (23.75%) and LFS Financial Systems (5%) are the shareholders of the bank.

THE WB WOULD STUDY THE REALIZATION OF 10 YEAR PROGRAM ON EDUCATIONAL SYSTEM REFORMING IN AZERBAIJAN

BAKU.14.01.2004.MEDIA-PRESS: : In the next week the Mission of the WB would arrive in Baku for studying the process of realization of the new 10-year program on reforming the educational system in Azerbaijan. Media-Press has been informed in the Baku WB Office about this.
Ten years program (2003 - 2013) of the reforming the educational system of Azerbaijan provides high quality improvement of situation within frameworks of this field, modernization of the educational programs for elder forms and issue of new text-books, preparation and qualification improvement of teachers, development of the material and technical base of the field. The cost of the project makes $60 MM. Its realization would be carried out by three stages. The first stage would include 2003 - 2007, the second one 2007 - 2010 and the last one 2010 - 2013. The first WB's credit tranche by a total of $18 MM was allocated on September of the past year.
On February of the past year the Education Mission of the WB visited to Baku and determined the work on determination of budget of each component of the project jointly with the working group. As well the mechanism of managing the project has been developed.
This is the second project of the WB on reforming the educational system of Azerbaijan. The first agreement on this issue has been signed between the WB and Azerbaijan on July 1999. The project was completed in the end of 2002, it cost made $5.5 MM and the Government of the country had allocated $500 thou.

THE VICE-PRESIDENT OF "TRANSNEFT" HAD BEEN CUNNING WHEN HE HAS TOLD THAT THE MEP BAKU - TBILISI - CEYHAN WOULD NOT CHANGE THE CONJUNCTURE OF THE OIL TRANSPORTATION MARKET

BAKU.14.01.2004.MEDIA-PRESS: The putting into operation of the pipeline Baku -Tbilisi - Ceyhan (BTC), by which the Azerbaijan oil would be delivered to the Turkish port Ceyhan and further to Europe, would not significantly change the formed conjuncture of the oil transportation market. The Vice-President of the Russian Company "Transneft" Mr. Sergey Grigoriev has expressed similar opinion in the interview to the RIA "Novosty".
"The pipeline Baku - Tbilisi - Ceyhan should really show its ability for competition with the Russian route Baku - Novorossiisk. On the other hand, a possible of demands of the Azerbaijan side for the Russian pipeline do not disturb us", - Mr. S. Grigoriev has said.
By his opinion the Azerbaijan side never achieve annual 5 MM tons promised for the Russian pipeline and 2.5 MM tons, which are delivered now are "those volume, which would be able to make weather and affect seriously on the pipe operation". By the words of Mr. S. Grigoriev, "Transneft" would be able compensate these 2.5 MM tons of the Turkmen or Kazakhstan oil without any problems.
There is a grain of truth in the words of the Vice-President of "Transneft", especially as to unwillingness of Baku to grow the volumes of its oil pumping towards Noworossisk. Azerbaijan has repeatedly declared that he has not free oil volumes. Recently the official of the State Oil Company of Azerbaijan (SOCAR) has announced again that Azerbaijan is not interested in a new agreement with Russia on oil transit by the pipeline Baku - Novorossiisk. "Comparing of the oil transportation tarifs on the routes Baku - Supsa and Baku - Novorossiisk is not on behalf of the Russian route. And as soon the pipeline Baku - Tbilisi - Ceyhan would be put into operation in 2005, demands in the Russian version would be minimum at all", - the official of the SOCAR has explained the position of Baku.
The Vice-President of "Transneft" considers "incorrect" the comparing of the oil transportation tarifs on the Georgian route Baku - Supsa (slightly higher than $3 for a ton - by version of Mr. S. Grigoriev, but really $2.7 for a ton - Media-Press) and the Russian one Baku - Novorossiisk ($15.67 for a ton) not on behalf of the Russian route. By his words, the tarif of the route Baku - Supsa do not take into account expenses on "the construction of the pipeline". These expenses were redistributed between shareholders of one company. For any shareholder, which does not enter the company the tarif of Baku - Sups would be certainly higher than on the route "Baku - Novorossisk", - the Vice-President of "Transneft" has noted.
As to that "Transneft" would compensate 2.5 MM tons of the Azerbaijan oil by Turkmen of Kazakhstan one, tha would not be complex thing, however we should not forget that it would be delivered to Novorossiisk again and then to the Bosporus. And as it is known the situation in this strait becomes more comlex every day. At the last year above 51 MM tons of oil and oil products were delivered in this direction. And now the West Europe feels a lack of the Russian oil, because tankers are forced to stay idle in turns for passing the Bosporus. And not only for the bad weather and fogs, but Turkey continues to make strict the regulations for passing its straits.
Just so the pipeline Baku - Ceyhan, which would be laid roundabout the Black Sea straits would be the alternative for this overloaded traffic in the next perspective. And so the opinion of the Vice-President of the Russian oil transport monopoly that "the pipelie should really show else its ability of competing with the Russian route Baku - Novorossiisk" does not held a critic and has been caused most likely by jealousy. At the same time "Transneft" would not refuse from supplementary Kazakhstan oil volumes pumping.
It connection with this the recent words of the official from the Russian government should be reminded. Telling about the pipeline of the Caspian Pipeline Consortium, he has said that "the project CTC accounted for pumping of 60 MM tons of oil has today opportunities of only 28 MM tons and only a half of these opportunities is used. Russia is the founder of the CTC and shares 24% of it, however receives nothing from the mentioned project", - he has noted. By the other words, additional millions tons of the Kazakhstan oil would bot unnecessary. The pipeline Baku - Ceyhan has all chances to attract these millions for itself.

ON FEBRUARY 3 THE CREDIT AGREEMENT ON FINANCING THE PROJECT BAKU - TBILISI - CEYHAN WOULD BE SIGNED

BAKU.14.01.2004.MEDIA-PRESS: On February 3 the official signing of the credit agreement on financing the project Baku - Tbiliisi - Ceyhan (BTC) would take place, the source in the company BP-Azerbaijan has informed the agency "Interfax-Azerbaijan" about this.
An arrival of the companies-shareholders of BTC Co (operator of the construction and operating the pipeline Baku - Tbilisi - Ceyhan) and as well the international finance organizations is expected. Supposedly, single agreement with all creditors of the project - shareholder of BTC Co and governments of Azerbaijan, Georgia and Turkey would be signed.
The total attracted for the project BTC with accounting the extra charged per cent rates would make $2.6 bn at a total cost of he project by $3.6 bn. The direct expenses for the construction of the pipeline make $2.95 bn, moreover the shareholders of the project invest 30% of this total and 70% from the total are allocated as credits. Expenses on purchasing 10 MM bbl of oil for filling up the pipeline (about $250 MM), credit facilities form the rest total.
The length of the oil pipeline BTC makes 1767 km and 443 km of them lay through the territory of Azerbaijan, 248 km through the territory of Georgia, 1076 km - through the territory of Turkey. The capacity of the pipeline would make 50 MM tons of oil per a year.
The construction works have begun on April 2003 and would be completed in the fourth quarter of 2004. The start of the export of the Azerbaijan oil from the port Ceyhan (Turkey) is planned by the second quarter of 2005. BP (30,1%); the SOCAR (25%); Unocal (8,90%); Statoil (8,71%); TPAO (6,53%); ENI (5%); Itochu (3,40%); ConocoPhillips (2,50%); INPEX (2,50%), Total (5%) and Amerada Hess (2,36%) are the shareholders of the project.
Totally, four groups of borrowers would provide credits for the project BTC. The international organizations the European Reconstruction and Development Bank and the International Financing Corporation make the first group, which would provide totally $500 FMM (by $125 MM would be allocated from own means by each organization and the same total would be allocated as syndicated credit).
The export-credit agencies, which would provide guarantees to the commercial banks for financing the supplies of the materials and equipment from the USA, Great Britain, Germany, Italy and France, would make the second group. The syndicate of 15 commercial banks, which would allocate $1.2 bn, makes the third group. ABN AMRO, Citigroup, Mizuho and Societe Generale are organizers of the syndicate. The large companies-shareholders of BTC Co such as BP, Statoil, Total S.A. and ConocoPhillips would enter the fourth group and allocate up to $800 MM.

IN 2003 THE AZERBAIJAN INTERNATIONAL OPERATING COMPANY PRODUCED 6.456 MM TONS OF OIL ON THE FIELD "CHIRAQ"

BAKU.14.01.2004.MEDIA-PRESS: The Azerbaijan International Operating Company (AIOC, the operator of the development of the block of the Caspian fields "Azeri - Chiraq - Guneshli" - ACG) has produced 6.456 MM tons of oil on the field "Chiraq". For the past year the AIOC has exported 6 MM 219 thou tons of oil by the pipeline Baku - Supsa (Georgia).
On December 553 thou tons of oil have been produced on "Chiraq" and this is by 17 thou tons of oil more than a year ago.
An average oil production from the offshore platform "Chiraq - 1" has made 131thou bbl in 2003. However in 2004 this rate would reduce up to 125 thou bbl as the partial modernization would be carried out on the platform in the third quarter and "Chiraq-1" would be connected to the underwater oil pipeline, which is constructed within frameworks of full scale development of ACG. Moreover, in the next year by plans three producing wells would be transferred to water pumping class and it would affect on the production rates. However, in 2005 these wells would be used again as working ones.
Slightly more than 50 thou tons of oil would be produced in 1997, 2371 MM tons would be produced in 1998; 4.814 MM tons in 1999; 5.0728 MM tons in 2000; 5.8974 MM tons in 2001; 6.3865 MM tons in 2002.
At the present time 18 wells operate on the stationary platform Chiraq-1 (15 working and 3 water pumping ones). The maximum productivity of the technical installations on the platform allows daily production up to 146 thou bbl of oil. By the mid of 2004 the capacity of the platform would be increased up to 165 thou bbl daily.
The British BP (34.1367% - operator), the American Unocal(10,2814%), ExxonMobil (8,0006%), Devon Energy (5,6262%) and Amerada Hess (1,0413%), the SOCAR (10%), Japanese Inpex Corp. (10%) и ITOCHU Oil (3,9205%), the Norwegian Statoil (8,5633%), the Turkish TPAO (6,75%) и the Saudi Delta Oil (1,68%) are the shareholders of the project on the development of the fields "Azeri", "Chiraq" and deep water field "Guneshli".

THE VICE-PRESIDENT OF "LUKOIL": "WE FEEL RESTRAINED OPTIMISM RELATIVELY TO THE SHARING IN THE PROJECT "ZIKH - GOVSANI"

BAKU.14.01.2004.MEDIA-PRESS: The Russian oil company "LUKoil" is able to stay in the Azerbaijan onshore project "Zikh-Govsani". The Vice-President of the Company Mr. Leonid Fedun has informed about this.
We negotiate on this project and have restrained optimism that we would continue the realization of this project", - he has said.
Entering of the contract on the project "Zikh-Govsani" into force is postponed for unsolved problems associated with ecology. The realization of the ecological program on the block requires about $100 MM of investments and this makes a half of the cost of the project.
The contract on the fields "Zikh" and "Govsani" was signed on January 9, 2001. "LUKoil" and the State Oil Company of Azerbaijan share separately by 50% in the project. The total contract area makes 128sq.kmm including the rehabilitation one - 52 sq.km. The remained oil supplies are estimated by 20 MM tons; the period of the contract makes 25 years.
Mr. L. Fedun has informed also that for the present the Italian company Agip has not accepted a decision on leaving the other Azerbaijan project - on exploration and development of the offshore gas condensate field "Shakh-Deniz". "We continue negotiations on the joint sharing in this project ", - he has added.
Jointly on the parity base with the Italian company Agip (the producing branch of Eni) "LUKoil" shares the joint company LUKAgip, which shares 10% in the project of the development of the field "Shakh-Deniz" and construction of the South-Caucasus gas pipeline Baku - Tbilisi - Erzurum
On December 2002, Agip declared about its intension to sell its share in the JC LUKAgip. And in the beginning of September of the past year the Chief of "LUKoil" Mr. Vagit Alekperov has declared that his company would be able to purchase the share of Eni in this enterprise.
The contract on the development of the field "Shakh-Deniz" was signed on June 1996. BP (25,5%, the operator of the project), Statoil (25,5%), the SOCAR (10%), LUKAgip (10%), OIEC (10%), TotalFinaElf (10%), and TPAO (9%) are shareholders of the project.

THE OFFICIALS OF THE BRITISH OIL AND GAS COMPANIES WOULD STUDY OPPORTUNITIES OF THE NEW INVESTMENTS TO AZERBAIJAN

BAKU.14.01.2004.MEDIA-PRESS: The group of the officials of the British oil and gas companies would study opportunities of investments to the economy of Azerbaijan.
They would visit Baku in the end of January for these purposes, the agency "Iterfax-Azerbaijan" has been informed in the press-service of the British Embassy.
During the visit the officials of the business circles would meet with potential partners from the SOCAR, a number of local and as well foreign ones operating in the country.

WILL THE CASPIAN OIL MAKE ONE-FIFTH PART OF THE WORLD OIL SUPPLIES?

BAKU.14.01.2004.MEDIA-PRESS: On the EuroAsian economic summit meeting in Almati, the Chief of the Italian Corporation ENI Jan Maria Gros Pietro has declared that the oil supplies of the Caspian Region makes 7.8 bn tons. By estimations of the other sources the supplies make from 13 up to 22 bn tons and even up to 50 bn tons of oil.
According to the official estimations of Kazakhstan, the supplies make 27.5 bn tons. "If forecast are recognized true, in the next future the oil would possibly make one third part of the world oil supplies and be equal to the summary oil supplies of Iraq and Kuwait", - Mr. Gros Pietro has declared.
Kazakhstan estimates the oil production in the region of the Caspian se by 4.7 MM bbl daily. The Saudi Arabia produces 8.1 MM bbl of oil daily; And Russia produces 6.3 MM bbl. Thus, the Caspian region occupies the third place on the oil production and has left behind Iran (3.4 MM bbl daily) and China (2.8 MM bbl daily).
The President of Azerbaijan Mr. Ilham Aliyev thinks that soon the Caspian Sea would occupy the second place on oil production if oil production volumes of Azerbaijan, Turkmenistan and Kazakhstan would be summed. The Kazakh side is believes that in the next future the Caspian region would become the largest oil suppliers not only in the CIS, but also in the world.
For realizing this dream the construction of a large amount of pipelines would be required. At the present time the Caspian oil is delivered to the world market only by five routes: Baku - Novorossiisk, Baku - Supsa, Tengiz - Novorossiisk, Atirau - Samara and Neka - Tehran. The total capacity of these pipelines would make 122 MM tons by 2015 excepting Baku - Tbilisi - Ceyhan (BTC), which is still in the construction stage. However, when by 2015 the oil production in the Caspian Region would make 250 - 300 MM tons.
The major part of oil experts are agreed with that the oil supplies of the Caspian Sea make no less than 10% of the Middle East one. In accordance with the long-term energetic predictions by 2050 the Persian Gulf and the Caspian Sea would give more 80 per cents of the world oil production and natural gas. Summary oil supplies of the regions of the Persian Gulf make approximately 800 bn bbl of oil. For comparison, the oil supplies of the North and South America and Europe make less than 160 bn bbl. And up to 2030 they would be exhausted by estimations of the experts.

THE COUNTRIES-MEMBERS OF THE OPEC EXCEED THEIR QUOTAS ON THE PRODUCTION AND EXPORT OF OIL AS BEFORE

BAKU.14.01.2004.MEDIA-PRESS: : The daily production of oil by the states entering into the OPEC has grown up to 27.75 MM bbl.
By the information of the Marketing and Researches Department of the OPEC, the exceeding of the total volume of the oil production in comparison with quotas allocated on the last conference in Vienna has made 3.25 MM bbl daily. For the present Iraq does not join to quota system of the OPEC - increasing of oil production and export in this country makes does not exceed 10 thou bbl daily.
Only four countries of the OPEC: Indonesia, Libya, Qatar and Venezuela some have insignificantly the oil production; nevertheless, the total reduction of volumes has made not more than 60 thou bbl daily. Volumes of produced crude oil only in four states :Iran, Nigeria, Saudi Arabia and United Arabian Emirates has grown by 280 thou bbl at once.
The largest growth in "black gold" production has been registered in the Saudi Arabia - by 140 thou bbl daily, the total volumes of the Iraqi oil production in this country make now 8.45 MM bbl daily.
Thus, cartel has managed to keep high prices for oil and at the same time to increase volumes of deliveries. For the present the main consumer America has reacted in no way at such "horse gambit". The Minister of Energy of the USA Mr. Spenser Abraham carrying out the tour to the Asian countries has declared that in the next time he would not meet with the President OPEC the Indonesian Mr. Purnomo Yusgiantoro.
It's a long time ago as the OPEC thinks about increasing quotas on the oil production. "According to the regulations existing in the cartel, we should increase the oil quotas by 500 thou bbl daily taking into account the high prices for oil produced by the OPEC and Mexico, however we are not going to do this", the President of the OPEC Mr. Purnomo Yusgiantoro has declared. He has emphasized that "the management of the cartel considerately keep up with the development of the situation at the world petroleum markets". By his words, a decision would be accepted on the out of turn conference of the OPEC on February 10 in Algeria and reflect a necessity of balanced demand and offer for a crude oil.

IN 2004 - 2010 "AZERENERJJI" PLANS THE CONSTRUCTION OF NEW ENERGETIC PROJECTS

BAKU.14.01.2004.MEDIA-PRESS: In 2003 the consumption of the electric energy in Azerbaijan has grown by 13.4% in comparison with 2002. As Media-Press has been informed in the JC "Azerenerjji", in 2002 the growth of the consumption has made totally 3% and in 2001 - 2%.
Taking the energy consumption rates growth into account, the construction of the new generating capacities, new generating capacities, substations and EETL of high voltage has been provided for 2004 - 2010,
In the first turn it relates to the construction of the second energetic block on the Baku SREPS "Severnay". The new energetic block with a capacity of 400 MWt would allow significant improvement of energy supplying of the Absheron Peninsula and annual saving above 200 thou tons of the conditional fuel. As well the construction of the new gas steaming installation by a capacity of 400 - 500 MW is planned. As the specialists note, the closeness to consumers is the main advantage of these two stations. Moreover, this would allow reduction of losses in the electric energy transmission. Now the Absheron Peninsula receives the electric energy by the PTL, which have been constructed from Mingechavir.
A significant complex of the reconstruction works would be carried out on the SREPS "Azerbaijan"and AliBayramli SREPS. In result these stations would have the project capacity at the same reduction of the fuel consumption.

IN 2003 THE AZERBAIJAN RAILWAY TRANSPORTED ABOVE 14 MM TONS OF CARGOS

BAKU.14.01.2004.MEDIA-PRESS: In 2003 the Azerbaijan Railway (ARW) transported 14.407 MM tons of cargos. This is by 8.3% higher than the plan rate and by 8.9% higher than in 2002.
As Media-Press has been informed in the ARW, oil has made above 80% of all cargos or 11.6457 Mmtons. This is by 3.1% higher than it has been planned and by 3.7% higher in comparison with the level of 2002.
Railways of Azerbaijan transport mainly transit oil from Kazakhstan and Turkmenistan. Growing the oil transportation has become possible in account of normalization of works on unloading of the oil tanks in the Georgian ports. Earlier, the Azerbaijan tanks stayed idle at the Georgian oil terminals in expectation of the unloading. And this inhibits unloading of the Caspian oil by the ARW. Now in account of extension of the Batum oil terminal and the construction of the Poti oil terminal this problem has been solved; the tanks return to Azerbaijan in time. Every day up to 500 tanks with oil and oil products are sent to Georgia from Azerbaijan. The park of tanks on the ARW allows the transportation of 16 - 18 MM tons of this production annually.
The volume of the passenger activities by railways made 4.6 MM persons in 2003 and the plan was executed by 109.5%. The volume of received profit has made 47.9 bn manats. 18.5 bn manats have been saved on the operating expenses. The official rate of exchange makes 4926 manats/$1 on January 14.

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