AZERBAIJAN'S FOREIGN DEBT TOTALS $1.55 BILLION

BAKU/26.10.04/TURAN: Azerbaijan's external state debt is reported to have totaled $1,550 million by 1 October. "It is a reasonable index in comparison with the Gross Domestic Product," a governmental functionary told TURAN.

This year the government has used $140-150 million of the foreign debt limit, which is equal to $200 million. An agreement on crediting is to be signed with the World Bank by the end of the year, meaning the allocation of $15 million by WB to implement the Market Service Development Project in Azerbaijan. The project is to improve the post service of the country. Another agreement is to be signed with the Islamic Development Bank on the projects of the construction of the Khachmaz power substation and the Yashma-Derbent power cable line ($13.5 million) and the Velvelechay-Takhtakorpu part of the Samur-Apsheron Canal ($10 million).

Azerbaijan is supposed to spend $143 million on repaying the external principal debts and interests in 2005. The state budget will repay $20 million, while the debtor organizations will repay the rest of the total. --0--

PROFITABILITY OF STATE OIL FUND ASSET MANAGEMENT DECREASES TWICE

BAKU/26.10.04/TURAN: The assets of the State Oil Fund of Azerbaijan (SOFAR) increased by AZM 194 billion ($42.7 million) or 4.6% in January-September 2004 and reached AZM 4,209 billion ($857.7 million). The surplus was AZM 477.4 billion ($97 million) in the same period of 2003.

The incomes totaled AZM 819.8 billion and the costs totaled AZM 625.4 billion. It was AZM 640.2 billion (44%) and AZM 367.2 billion (36.4%) less than the January-September 2003 indices respectively.

The oil-contract-related incomes totaled AZM 819.8 billion, including AZM 677.8 billion from the sale of the profit oil (there was AZM 653.7 billion in January-September 2003). The Baku-Supsa oil transit fee incomes totaled AZM 47.7 billion (there was AZM 48.1 billion in January-September 2003). The bonus payment incomes totaled AZM 7.9 billion (AZM 559.8 billion). The per-area payment incomes totaled AZM 6.3 billion (AZM 63.1 billion). The lease of state property by foreign companies gave AZM 2.3 billion (AZM 0.6 billion). The nine-month SOFAR asset management produced AZM 77.8 billion, which was AZM 56.9 billion or 42% less than the January-September 2003 index. The total asset management profitability decreased almost twice and was less than 2% of annual interest.

The execution of the SOFAR expenditure budget produced the following items in January-September 2004: improvement of the dwelling, social and economic conditions of refugees and internally displaced people - AZM 15.7 billion (there was AZM 76.2 billion in January-September 2003), financing of the part of Azerbaijan in the Baku-Tbilisi-Ceyhan Main Export Pipeline Project - AZM 36.4 billion (there was AZM 574.6 billion), transfers to the state budget - AZM 488 billion (AZM 320 billion). The SOFAR management costs totaled AZM 51.7 billion, including AZM 2.3 billion spent on the staff management and AZM 49.4 billion spent on the reevaluation of the currency assets (losses deriving from the rate difference). Taxes totaling AZM 33.6 billion were transferred to the state budget, mainly including the profit tax for 2003.

RV INVESTMENT COMMENCES EXPLOITATION OF GOLD DEPOSITS OF AZERBAIJAN

BAKU/12.10.04/TURAN: RV Investment Services Group LLC from the USA is to commence the exploitation of promising gold deposits in Azerbaijan. In early September it concluded a contract on the drilling work with VEIN Ltd. from the UK. The drilling will be done in the Kedabek and Gosha deposits in Tovuz and the Piyazbashi, Agyurd, Shekerdere and Keleki deposits in Ordubad, Nakhchivan. "The experts of VEIN Ltd. are to start their visit to Azerbaijan on 20 October," Fizuli Samedov, Chief of the RV Investment Azerbaijan Office, told TURAN.

He said the first stage of the work would last until June 2006 and $50 million will be invested in the deposits then. The money will help to buy machines and devices, process the minerals, etc. Over 4,000 people will most probably work there.

The production-sharing agreement on the gold deposits was signed between Azergizil Concern from Azerbaijan and RV Investment Services Group LLC on 20 August 1997 and confirmed by the Parliament of Azerbaijan in March 1998. The Ministry of Ecology and Natural Resources represents Azerbaijan in the contract now. It will get 51% of the profit.

The contract envisages the extraction of minerals from 9 gold deposits in Kedabek, Tovuz, Ordubad, Kelbadjar and Zangelan. The former two districts of Azerbaijan have been conquered by Armenia.

* The deposits envisaged by the contract contain 400 tons of gold, 2,500 tons of silver and 1.5 million tons of copper. The investment in the project can most likely total $500 million. The term of the contract is 25 years. Azerbaijan is to receive 80% of the incomes that would derive from the exploitation of the deposits. --0--

Last correction date of the file: 24/7/2008 - 15:22:30