Azerbaijan suffers $1B loss from BTC

Sept. 18, 2008 at 10:53 AM
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BAKU, Azerbaijan, Sept. 18 (UPI) -- Azerbaijan suffered a $1 billion loss in revenue from disruptions in crude exports through the Baku-Tbilisi-Ceyhan oil pipeline, state officials said Thursday.

In August, a fire at a pumping station in eastern Turkey and military conflict between Russia and Georgia over the breakaway republic of South Ossetia disrupted the flow of oil through BTC, which carries roughly 1 percent of the world's oil.

Shahmar Movsumov, director of the State Oil Fund of Azerbaijan, SOFAZ, said the loss could be made up, Trend Capital News reported.

"The funds which Azerbaijan will miss this year due to fire on the Baku-Tbilisi-Ceyhan pipeline and suspension of oil export via the pipe are expected to account for $1 billion," he said. "That is not a lost profit. It will be regained in the future."

He stressed the impact on the state budget would be minimal as fiscal estimates for 2008 were based on an oil price of $70 per barrel.

"In spite of high oil prices this year, the country's budget was formed from a conservative standpoint on the index," Movsumov said.

Brent Crude approached $98 per barrel in trading Thursday.

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