U.S. cautious of Azeri energy revenues

WASHINGTON, June 19 (UPI) -- Azerbaijan needs to use its oil and gas revenues in a positive fashion to avoid a corrupt economic and political environment, the U.S. State Department said.

"As Azerbaijan's income from its rich oil and gas resources rises dramatically, we continue to urge its leadership to use these revenues wisely for both current and future generations," U.S. Assistant Secretary of State on Europe and Eurasian Issues Daniel Fried said before the House Foreign Relations Committee.

Fried noted Azerbaijan boasts the fastest-growing economy in the world for the third consecutive year, in part from its oil and natural gas reserves, but cautioned Baku against exploiting the opportunity.

"We have urged the government to do more to limit and reverse widespread corruption," he said.

The assistant secretary welcomed Azerbaijan as an emerging energy market in Europe and called on the country to embrace free market principles.

"In the area of energy, Azerbaijan is emerging as one of Europe's critical, near-term alternative sources of natural gas. Azerbaijani gas can open the way for a new network of pipelines that will help the market, rather than a monopoly, determine the price and availability of a critical commodity," Fried noted.

Baku predicts its oil production for 2008 will approach 406 million barrels and the State Oil Co. of Azerbaijan said it will generate about 282 billion cubic feet of gas, the Trend Capital News Agency said.