Financial crisis hurting Azeri oil sector

BAKU, Azerbaijan, Oct. 9 (UPI) -- The global economic crisis will have a ripple effect on the energy sector, creating the potential for a significant downturn in the economy of Azerbaijan.

Baku-based energy analyst Ilham Shaban said despite official optimism from the government, the petroleum-based economy of Azerbaijan should expect to suffer under current economic conditions, the Azeri news service Today.Az reported Thursday.

"Despite the soothing announcements of the country's leadership, the global economic crisis will have a negative impact on Azerbaijan's economy," Shaban said.

Officials may have to re-examine plans for a $5 billion oil platform and a $10 billion plan to expand development at the Shah Deniz oil field if the economic downturn continues, as Baku will not have sufficient access to the credit market.

He noted, however, that Azerbaijan could continue moderate economic activity even if the financial situation pushed world crude prices to $50 per barrel.

"Moreover, Azerbaijan expects the highest gains from oil sale from 2009 until 2014, which will rescue our economy," he said.