AZERBAIJAN - The Non-OPEC Countries - Part 7.

Editor's Note: The first five issues of OOD in this volume will survey the non-OPEC decision makers in the Caspian Sea basin. It will cover Azerbaijan, Kazakhstan, Russia, Turkmenistan and Uzbekistan. The survey will concentrate on the backgrounds and the factors influencing decision makers in each of these five countries. Provided there is stability in decision-making, the Caspian region including Russia is poised to rival the Middle East as a source of oil and gas to the world. Western investors in this hydrocarbons-rich zone expect the Caspian countries, with OPEC member Iran excluded, would be able to produce by 2010 more than 15 million b/d of oil and export over 300 BCM/year of natural gas.

All decisions relating to petroleum or any other sector in Azerbaijan are taken by ailing President Gaidar Aliyev. The state organisations and ministries are paralysed by the need to refer decisions to him. Foreign oil executives complain of waiting for months for deals to be sorted out, as no one dares to act without clearance from the very top. Corruption is widespread. Critics call Aliyev's regime a kleptocracy, although other Central Asian rulers are much wealthier with Kazakhstan's President Nursultan Nazarbayev being among the richest men in the world. Even some of Aliyev's opponents are corrupt, as in the case of former parliament speaker Rasul Kuliyev, who once was his close ally.

The entity in charge of the petroleum sector is the State Oil Company of Azerbaijan Republic (Socar), a huge conglomerate of companies for the various upstream and downstream branches of the industry. Azerigaz is the country's gas utility and is in charge of the gas pipelines. AzerEnergi is the power utility controlling generation and distribution. The State Fuel & Energy Committee is in charge of distribution of petroleum products. Azerikimya oversees the petrochemicals sector.