EXTRACTIVE INDUSTRY NEWS: Azerbaijan

·  The Azerbaijani Parliament ratifies new oil contracts  ·   The Coalition disagrees with new oil agreements  ·  Coalition has determined priorities for the next stage of its activity ·  Next meeting of the International EITI Supervisory Board has been held ·  New members have been accepted to the Coalition 

Public Unions Coalition of  “Improving Transparency in Extractive Industries” has held a conference on topic “Implementation of EITI in Azerbaijan: retrospective view to a 5 years period” by financial support of  Norway Kingdom Embassy in Azerbaijan in 17th June 2008 at the Irshad Hotel by participation of local and international companies. Chairman of National Government Commission on EITI and executive director of the Oil Fund Shahmar Movsumov, ambassador of Norwegian Kingdom in Azerbaijan John Ramberg, representatives of oil-gas companies worked in Azerbaijan, World Bank’s and OSI’s( Open Society Institute) representatives  were participating in the conference.

Coalition for Improving Transparency in Extractive Industries is conducting  “ improving transparency of oil revenue expenses” project, financed by Baku Embassy of Norway Kingdom. One of the five planned directions within the project is organizing talk shows in local TV s. In this direction third shooting of program was held in 24th may in Kapaz TV of Ganja. Coalition’s coordinator Gubad Ibadolgu  has participated in the talk show as an expert.

State Oil Fund of Azerbaijan Republic (SOFAZ) assets have been increased from $ 2,017 million in August, 2007 to $ 3,335 million in April, 01, 2008. Budget revenues of the State Oil Fund of the Republic of Azerbaijan (SOFAZ) for the period of January-March, 2008 reached 1116,4 million manat, while budget expenditures constituted 438,4 mln. Manat. Revenues of the 2008 budget of the fund was approved 3,60, expenditures 1,68 billion manat, the amounts, however, will be expected to be amended in May, 2008 when the state budget is amended at the Parliament. SOFAZ’s revenues have been increased thanks to the oil price in the market.

This Press release is jointly prepared by Committee on EITI, extractive industry (oil and gas) companies and Non-Governmental Organizations (NGOs) Coalition for Increasing Transparency in the Extractive Industries of Azerbaijan.

The Coalition Increasing Transparency in Extractive Industry held its 10th General Assembly in the Conference Hall of AF-HOTEL-AQUAPARK on October 20th, 2007. The gathering started with the playback of the national anthem of Azerbaijan. Addressed to and read out at the meeting were the letters of greetings and welcoming speeches by the chairman of the EITI Commission of the Government of Azerbaijan and executive chairman of the State Oil Fund of Azerbaijan, Mr Shahmar Movsumov, as well as the Open Society Institute – Assistance Foundation, the Embassies of the United Kingdom and the Kingdom of Norway to Azerbaijan, and a number of international organizations and oil companies.

The coalition of local NGOs Increasing Transparency in Extractive Industries (ITEI) holds its 10th General Assembly at the AF-HOTEL-AQUAPARK in Novkhany, a settlement on the outskirts of Baku. The meeting will hear the reports by the Board and the Monitoring Group of the Coalition, and discuss the Action Plan of the Coalition for Year 2008, as well as amendments and alterations in the Regulations of the alliance. Meanwhile, as the term of office of the governing bodies of the Coalition is over, it has been decided to review the organizational issues on the agenda. The General Assembly will announce the members of the Board to oversee the operation of the Coalition for the coming two years.

For the first time in the history of modern Azerbaijan, the State Oil Company has signed two oil development deals "in the dark," without public notice of its negotiations with the foreign companies involved, and without the traditional public contract signing ceremony.

Azerbaijan's Extractive Industry Transparency Initiative (EITI) is being developed by NGOs that created a coalition for this purpose 3 years ago. The NGO coalition has issued the first copy of a special journal about this. The journal called Transparency in Extractive Industry explains how the State Oil Fund's money is spent,

·  Azerbaijan has become a full member of EITI  ·   XII General Meeting has been held  ·  SOFAZ budget approved ·  The Coalition has voiced its opinion regarding the validation ·  The Coalition has disclosed its opinion regarding with the 9th report  

EITI Coalition has held a press conference on 11 March. Council Coordinator of EITI Coalition Azer Mehtiyev, council members Mehriban Vazir, Dunya Sakit, Oktay Gulaliyev also member of EITI Board and Coalition Ingilab Ahmadov took part in the press conference held in Caspian Plaza. Azer Mehtiyev made an opening speech, he talked about Coalition’s position on 9th report of companies’ to State and that this position had been determined quite before, but as it was not discussed together with Government and companies it was impossible to publish it: “We would like to publish it after mutual discussion of parties of the Memorandum. But, because of validation process and other causes this discussion has not been occurred yet. We hope we can get responds to our questions after this conference.”

Coalition For Improving Transparency in Extractive Industry (EITI) has held its following XII General Meeting on 21 February 2009 in the conference hall of Caspian Plaza. Coordinator of Coalition Council Azer Mehtiyev gave information about done works by Coalition Council in 2008-2009 periods, main directions of the program, development of international relations, validation process of EITI, existing obstacles and future plans.

·  Coalition meets validator  · Work plan must be discussed and adopted with participation of MoU parties  ·  Efficiency of expenditures allocated from SOFAZ to be evaluated · The 12th General Meeting of the Coalition to be held on February 21 · The Coalition made a statement regarding with the composition of the Supervisory Board of SOFAZ

Public Unions Coalition for Improving Transparency in Extractive Industries signifies its deep anxiety connected with situations as evading from legislative in budget process on ARSOF (Azerbaijan Republic State Oil Fund). So, budget process of ARSOF had been affirmed by 12 September 2001 dated decree of President of Azerbaijan Republic, and is put in order with “Regulations of composition and execution of yearly incomes and expenses program (budget) of ARSOF”. According to those Regulations, ARSOF’s yearly budget has to be represented to Observation Council till 5th September each year (4.1 item), and has to be sent for looking into to the President combined with project of state budget (4.3 item). Dead-line of affirmation of ARSOF’s budget by President is determined in Rules as 31st December (4.4 item). Affirmed budget immediately has to be published on Press (4.6 item).

Validator group that holds validation of transparency initiative in EITI Azerbaijan- representative of Coffey International Company Tim Ruffer, Trond Kubbeurd expert on oil-gas industry of IPAN Company and director of “Balance Audit” company functioned in Azerbaijan Ali Nabiyev, had held a meeting at the office of Coalition of Public Unions on Improving Transparency Initiative in Extractive Industry on 13th January 2009. The purpose of the meeting was learning opinion of the Coalition on execution process of International Transparency Initiative in Azerbaijan.  

New structure of Supervisory Board of State Oil Fund of Azerbaijan Republic (SOFAZ) was approved by decree of the President of Azerbaijan Republic on  November 27, 2008.  

ITEI MEETS MONGOLIAN CIVIL SOCIETY REPRESENTATIVES  · INTERNATIONAL SEMINAR ON THE TRANSPARENCY INITIATIVE HAS BEEN HELD  ·  COFFEY INTERNATIONAL DEVELOPMENT TO VALIDATE EITI PROCESS IN AZERBAIJAN  ·  ANNIVERSARY OF SIGNING OF MEMORANDUM HAS BEEN CELEBRATED WITH DISCUSSIONS · NEXT EDITION OF “TRANSPARENCY IN EXTRACTIVE INDUSTRIES” MAGAZINE HAS BEEN PUBLISHED

Coalition of Improving Transparency in Extractive Industries has held a round-table on topic “5th year of Mutual Understanding Memorandum: profits of past period and claims of future period” in 21st November 2008. Government Commission’s members on Transparency Initiative in Extractive Industries, representatives of companies joined this initiative, representatives of local and foreign NGOs and diplomatic missions, independent experts and representatives of Mass Media attended the event.

Coordinator of Coalition for “Improving Transparency in Extractive Industries” of Public Unions  and Chairman of Economic Research Center Gubad Ibadoglu attended the seminar on “ Implementation of Transparency Initiative in Extractive Industries: the best practices and tools” held within 10-15 November 2008 in Berlin. More than 35 representatives from 10 countries over the world attended the seminar.

Extractive Industries Transparency Initiative (EITI) reports for the first six months of the year 2007 will be collated by Moore Stephens Azerbaijan Limited following the decision of the Selection Group, which was established in accordance with the Memorandum of Understanding signed between the governmental Committee on EITI, foreign and local extractive industry companies and the NGOs’ Coalition for Increasing Transparency in Extractive Industries to implement EITI in Azerbaijan. Tender has been announced by State Oil Fund of the Republic of Azerbaijan, as it is to pay audit company’s fees for collation of the next (seventh) cycle reports as per MOU.

A meeting of the Validation Working group, established in order to proceed with Validation process, comprising of nine persons equally represented by the EITI stakeholders (Government of Azerbaijan, Extractive industry companies, and Coalition of Non-governmental organizations) was held on November 18, 2008.

 · STATE INVESTMENT EXPENSES HAS BEEN DISCUSSED  · ANNIVERSARY OF “THE CONTRACT OF THE CENTURY” WAS CELEBRATED  · NO REPLY FROM SOCAR  TO THE COALTION’S QUESTIONNAIRE  · THE COALITION EVALUATE THE EITI IMPLEMENTATION IN AZERBAIJAN  · A WORK WILL BE CONDUCTED WITH COMPANIES REGARDING WITH THE INDIVIDUAL ACCOUNTABILITY  · THE COALITION’S EXPERTS PREPARE A DRAFT ON THE OIL FUND  OPPORTUNITIES ARISE  TO ATTRACT NON-OIL & NON-GAS PRODUCTION TO THE EITI PROCESS  

Four students from Princeton University, Thomas A. Niblock, James E. Ellis, Nothan J. Stepherd, and Corinna Gilfillan, chairman of USA office of Global Witness International Organization and her advocate Thomas Mayne met with EITI Coalition Coordinator Gubad Ibadoglu and Council members Alimammad Nuriyev and Dunya Sakit connected with implementation of EITI in Azerbaijan in Coalition office in 28th October 2008.

Azerbaijan Republic’s oil producing, entering oil money to the country, and all processes related to it are the focus of attention. If we consider “black gold” s weight in a country’s economy and impact possibilities, we think, incomes, their spending, etc. have to be cause all Azerbaijan citizens to think. And we are not mistaken if we say transparency of these processes servers to all of our interests. The main goal of the organization that we represent “Improving Transparency in Extractive Industries” NGO Coalition is to help establishing transparency in this sphere and to obtain maximum participation of citizens in this process. Coalition has done many things since it functions. However, there are still many problems to be solved and much more strained and important problems are waiting for us in the future. We hold sociological researches permanently for the purpose of increasing quality of our work, improving our organization’s work, to continue our function more effectively and efficiently, to develop successes we gained and to draw citizens to these processes. The interrogatory drawn to your attention is the composition of this function. The interrogatory was conducted within the project held by support of Norwegian Embassy in Azerbaijan Republic.

The book contains information about the oil contracts signed by the Azerbaijan Republic, describes sources of the country’s oil revenues and their main beneficiaries, takes a look at the spending of oil revenues accumulating in the State Oil Fund of the Azerbaijan Republic, analyzes the risks of loss of some of the revenues and possible ways of mitigating them.

Representatives of IFIs including ambassador of Norway in Azerbaijan and head of EITI secretariat, as well as media and NGO representatives and experts participated in the event. Sabit Bagirov opened the event and after EITI NGO coordinator Gubad Ibadoglu made a presentation. The presentation was devoted to 3 main issues: role of oil in country economy, public opinion on this and CSOs concerns. The concerns were mainly on depositing oil money and its management, disaggregated reporting by companies, and discrepancies between calculations of NGO experts and government on profit sharing.

WORKING GROUP ON VALIDATION PROCESS HAS STARTED TO WORK...  INQUIRING OF THE NGOs COALITION HAS BEEN RESPONDED... NGOs COALITION PROPOSED A CANDIDATE TO THE EITI BOARD... SOFAZ’’s EXPENDITURES IS INCREASED... BP FACES WITH PROBMEM IN RUSSIA... THE COALITION HAS ANNOUNCED A COMPETITION AMONG EXPERTS... SOCAR’s SOCIAL EXPENCES HAS BEEN DISCUSSED...

The recent events in Georgia allowed as to rethink many things that our countries have encountered over the last two decades. The blood of peaceful and innocent people was shed again. Responsibility for this lies again with Russia’s neo-imperial circles - those who initiated conflicts ahead of the collapse of the USSR, who are still fanning their flames in the post-Soviet area in order to implement their imperial ambitions, and those who have been unable for all these years to separate the high principles of morality and law, proclaimed in words, from their egoistical geopolitical and commercial interests.

The ITEI Coalition of civil society institutions considers the release of the results of the audit on the 8th report an important development and an essential step, which the Government of Azerbaijan and the country-active oil & gas companies have jointly taken forward to increase transparency in the extractive industry...

The seventh reporting cycle on implementation of Extractive Industries Transparency Initiative (EITI) in Azerbaijan was launched on August 30, 2007 at the meeting of the Selection Group, which was established in accordance with the Memorandum of Understanding signed between the governmental Committee on EITI, foreign and local extractive industry companies (oil and gas) and the NGOs’ Coalition for Increasing Transparency in Extractive Industries to implement EITI in Azerbaijan. The Group decided to send invitations to bid to the Azerbaijan offices of the world-known international audit companies.