Govenrment and Business Environment Case Study

Azerbaijan's Dependence on the Energy Sector: Prospects and Perils

OR

Abstract:
Azerbaijan is an energy-rich country and oil is the primary driver of the country's economy. After becoming independent in 1991, a shortage of funds compelled the Government of Azerbaijan to invite foreign companies to develop its oil resources through production sharing agreements. British Petroleum, one of the early entrants, is the largest foreign investor in Azerbaijan. Oil and oil products account for over 80% of the country's exports and contribute to more than 50% of the budget.

Pedagogical Objectives:

• To discuss the scope of oil industry in Azerbaijan
• To discuss the implications of the dependence of an economy on only one sector.

Keywords : Emerging economy,Government and Business Environment Case Study, Dutch disease, Production sharing agreement (PSA), British Petroleum Amoco ExxonMobil, Oil and gas sector, World Bank IDA (International Development Association), State Oil Company of Azerbaijan (SOCAR), Azerbaijan International Operating Company (AIOC), Communist to market-oriented economy, State Oil Fund of Azerbaijan (SOFAZ), Azerbaijan’,s economic driver, Ilham Aliyev, Heydar Aliyev, David Woodward