Topics Covered
Welcome to Azerbaijan
Overview of Resources
Metals
Fossil Fuels
Investment
Sources
Welcome to Azerbaijan
Azerbaijan, with a total population of 9,493,600 as of July 2012, is located in Southwestern Asia, bordering the Caspian Sea. The country mostly has a dry, semiarid steppe climate and covers a total area of 86,600 km2.
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The national flag of Azerbaijan.
Image Credit: CIA Factbook. |
Azerbaijan gained independence in 1991 following insability that the country continues to experience. Azerbaijan still managed to bring down its poverty rate because of the increase in exports from its oil sector.
The country’s economic growth rate experienced a slight decline due to decrease in the production of oil and also because of the global recession. With decrease in the oil production, Azerbaijan was forced to rely on energy exports and develop new strategies to uplift its economic status. The country’s GDP as of 2011 was $94.25 billion.
Overview of Resources
Azerbaijan’s chief natural resources include natural gas, petroleum, nonferrous metals, bauxite and iron ore. In 2010, Azerbaijan produced a range of industrial minerals and metals and significant production and export activities took place in its oil sector.
Despite being a chief producer of crude oil, the country has focused on the development of offshore resources since 1991. Two major gasfield and oilfield projects in 2010 included the Shah-Deniz offshore gas condensate field and the Azeri-Chirag-Guneshli (ACG) offshore oilfield complex.
The map of Azerbaijan. Image Credit: CIA Factbook
Metals
The United Kingdom’s Anglo Asian Mining PLC started gold production in 2009 in Azerbaijan in 2009. Gold production activities took place in the Gedabek gold and copper mine and in 2010 the company produced 1.9 Mt of gold.
In 2010, licenses for gold fields in Azerbaijan were owned by Anglo Asian Mining PLC. These gold fields were capable of producing 2,500 t of silver, 1.5 Mt of copper and 400 t of gold. Based on this yield, the government highlighted a sixfold increase in the production of gold in Azerbaijan by 2014.
Fossil Fuels
In 2010, Azerbaijan experienced a 2.1% increase in its production of natural gas in comparison with that of 2009. The Oil and Gas Journal stated that the country’s gas reserves were about 30 trillion ft3, as of 2011.
The production of crude oil in Azerbaijan saw an increase by only 0.3% in comparison with that of 2009. About 80% of the country’s total crude oil production was covered by the ACG oilfield complex that has about 5 billion barrels of oil reserves. Azerbaijan’s chief export pipelines in 2010 include the Baku-Novorossiysk, the Baku-Tbilisi-Ceyhan (BTC) and the Baku-Supsa.
In 2010, ACG field produced Azeri crude oil at two refineries that include the New Baku refinery and the Baku refinery. Both these refineries together produce about 400 billion barrels per day of oil.
Investment
Recent mining reports highlight the production of 14,044 ounces of gold by Anglo Asian Mining’s Gedabek gold, copper mine. This production is a huge increase from that of the previous quarter that amounted to 11,716 ounces of gold. The production of silver dore in Q3 amounted to 3,168 ounces in comparison with the Q2 production that amounted to 4,504 oz ounces.
The Azerbaijan firm has agreed with a US$18 million funding that will help to improve gold recoveries of sulfides and oxides at Gedabek. The firm also hopes to produce 720 t of copper in 2012 through the Sulphidization, acidification, recycling and thickening (SART) plant.
Further growth in the country’s economy will depend on a change in global oil prices and discovery of new gas and oil pipelines and also on the government’s ability to use the profits obtained from the country’s petroleum and gas sectors in an efficient and well planned manner.
Azerbaijan’s economic status will likely experience a positive change following an increase in production and export of copper, gas and petroleum and also a significant increase in foreign investments.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.
Sources
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