EU: Azerbaijan will be deprived of benefits of exporting to Europe since 2014

The main part of Azerbaijan's exports to the EU falls on the oil sector, while recently a decline in oil production is noticed there in the country. At the same time, in 2014 the EU will deprive Azerbaijan of trade benefits with the EU, , the head of the EU Delegation to Azerbaijan, Ambassador Roland Kobia had stated at a press conference, the Azerbaijani press agency "APA" reports.

"The reduction of oil production became the reason for the reduction of goods turnover with the EU. At present the system of GSP plus operates. It allows exporting any goods from Azerbaijan to the EU countries without quotas. This system is provided for economically weak countries. However, Azerbaijan's economy is sufficiently developed and Azerbaijan is on the list of medium-developed countries. For this reason, Azerbaijan will not be able to use the system since January 1 of 2014," Roland Kobia told.

In 2012 Azerbaijan's oil export in nominal terms fell by 7%. Decline in volume of exports was connected with the fall in the level of oil output in the republic, which reduces for three years already. Thus, if in 2010 the republic produced 50.8 million tons of oil, in 2011, the volume of crude production declined by 10.8% and reached to 45.4 million tons. In 2012, oil production has declined by 5.3% reaching to 43 million tons. During the first month of 2013 oil production in Azerbaijan reduced by 2.6%, and for 4% during 2 months.

The reduction of oil production increases dependence of Azerbaijan's economy and budget on oil sector. Thus the SOFAZ share’s transfer in Azerbaijan's budget revenue increases since 2007, when the SOFAR transfer was less than 9% of revenues, and in 2013, it is planned to have transfer of about 59.3% of government revenues. Overall, in 2013, Azerbaijan's state budget revenues in oil sector will make 79% of total revenues.