Natural resources, energy and environment
Azerbaijan is rich in natural resources,
primarily oil and gas. Extraction takes place mainly in
the Caspian Sea. In recent years, oil production has
decreased while the extraction of natural gas is
The extraction of oil, gas and other minerals
accounts for close to 40 percent of GDP. More than three
quarters of the oil is exported, but just over one
quarter of the natural gas.
Major exports by Azerbaijan with a full list of the top products exported by the country. Includes trade value in U.S. dollars and the percentage for each product category.
Domestic gas demand is growing, and gas has to be
imported from time to time, as export contracts are
fixed and the majority of gas supplies have not yet been
Azerbaijan is considered to be the first
oil-producing country in modern times. At the beginning
of the 20th century, half of the world's oil came from
Azerbaijan. Today, energy accounts for about 90 percent
of the country's exports and more than two-thirds of
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The extraction of oil mainly occurs in the Azeri-Chigar-Guneshli
(ACG) fields some 12 miles off the coast of the Caspian
In 2010, a peak was reached in oil production, when
more than a million barrels per day were extracted.
Subsequently, production fell, but in recent years it
has remained fairly stable at about 80 percent of the
listing during the peak year. In 2016, gas production
had tripled in a decade and expansion continues.
The huge gas field Şah Deniz (King of the Sea) under
the Caspian Sea, southeast of Baku, has been listed as
the world's eighth in size. The production there began
in 2006 and made Azerbaijan a major gas producer
internationally. The second phase of the field, in which
the British oil giant BP with partner companies began
the extraction in 2018, is expected to more than double
the country's exports of gas.
The second large gas field Abşeron, lies a few miles
out to sea. It is still under development and is
expected to start producing by 2020 according to the
operator, French Total.
Azerbaijan has tried to interest western companies to
take over the Neft Daşları (Oily Rocks) facility, known
from a Bond film and closest to a city, built on
platforms, piles and sunken ships five miles from shore.
In Neft Daşları - also known for the world's first
offshore oil platform - oil has been mined for seven
decades, but the plant is decaying.
The export of Azerbaijan's oil and gas to the Western
European market is politically sensitive. First, the oil
was transported from Baku north and west across Russian
territory, through Dagestan and Chechnya to Novorossiysk
on the Black Sea. But Azerbaijan has been anxious to get
past Russia, and today there are two other lines - one
from Baku west through Georgia to the Georgian Black Sea
port of Supsa and another from Baku through Georgia and
Turkey to the Turkish Mediterranean port of Ceyhan. Most
of the Azeri oil is exported through the latter.
In 2016, construction of the so-called Southern gas
corridor was started, a pipeline to transport gas from
Denah Deniz through Azerbaijan, Georgia, Turkey, Greece,
Albania and under the Adriatic to Italy. From there gas
will be distributed in the rest of Europe.
In Azerbaijan, gold, silver, copper, iron and other
minerals are also extracted. The Iran-owned company,
Anglo Asian Mining, operates two gold mines and has
agreements for the exploitation of four additional gold
More than 90 percent of the country's electricity
comes from gas-fired power plants, and the rest mainly
The oil reserves will eventually run out. Since 2009,
there is an authority responsible for renewable energy
development. The Government hopes that renewable energy
sources will meet one tenth of the country's energy
needs by 2020. In addition to hydropower, the hope is to
expand wind and solar power. There are also
prerequisites to use biomass.
The abundant use of fertilizers and pesticides in the
Soviet era led to severe environmental damage in
agriculture. Since then the situation has improved. On
the one hand, there is now a greater awareness of the
dangers, and on the other hand, many farmers cannot
afford to buy the funds needed.
Oil and industrial emissions have caused pollution
along the country's coasts, especially around the
Abşeron Peninsula with the cities of Baku and Sumqayıt.
In the district of Baku, the state-run oil company Socar
has made efforts to clean up oil spills.
The Caspian Sea is the world's largest lake. Along
the beaches, seals used to be a common sight. An
estimated one-tenth of the stock that existed about 100
years ago now remains. The species is considered
endangered by hunting and industrial emissions, not
least from oil recovery. The UN environmental program
Unep has warned against large quantities of
uncontaminated wastewater, but also radioactive
substances from nuclear power plants. Much of the
pollution reaches the lake from the Volga River in
Russia, which flows into the Caspian Sea. Also, the
stocks of the valuable deer, which are fished for
caviar, have decreased dramatically.
Most of the wastewater of Azeri households goes into
the rivers and seas. However, a certain element of oil
in the water belongs to the Caspian Sea's natural
environment due to leakage from oil layers beneath the
FACTS - ENERGY AND ENVIRONMENT
Energy use per person
1,502 kilograms of oil equivalent (2014)
Electricity consumption per person
2202 kWh, kWh (2014)
Carbon dioxide emissions in total
37 488 thousand tonnes (2014)
Carbon dioxide emissions per inhabitant
3.9 tonnes (2014)
The share of energy from renewable sources
2.3 percent (2015)
Suspected assailants are imprisoned
Four men are sentenced to prison for between 12 and 14 years. They are found
guilty of terrorism and treason for having planned attacks in connection with
the European Melo Festival in Baku in May and for having had contacts with the
Iranian Revolutionary Guard.
Stricter punishment for protests
Parliament tightens the penalty for participating in illegal gatherings; The
fine for those arrested for participating in an unapproved demonstration is
increased from a maximum of about SEK 100 to around SEK 9,000. Anyone caught
carrying weapons or explosives during an illegal meeting can be sentenced to
imprisonment for up to three years. An average monthly salary is around SEK
Prison sentence for spies convicted
The 22 Azerbaijanis who have been facing trial for espionage on behalf of
Iran (see March, August 2012) are sentenced to prison for between 10 and 15
years. They are found guilty of planning terror attacks on US and Israeli
embassies in Baku.
The promotion of murderers is rioting in Armenia
An Azerbaijani officer sentenced to life imprisonment in Hungary for
murdering an Armenian colleague during a 2004 NATO-led course is transferred to
Azerbaijan to serve the rest of his sentence in his home country. However, the
Baku government, which guaranteed that the punishment would be respected,
pardons him immediately after returning home. He is also promoted, assigned a
new home and received outstanding salary for the eight years he has been
incarcerated. The measures upset the government of Armenia threatening war.
Internationally, too, there is great concern that the decision will prevent
opportunities for further peace negotiations on Nagorno-Karabakh. Both NATO and
the European Parliament regret the decision.
Trial against suspected spies
The trial opens for closed doors against the 22 Azerbaijani citizens arrested
at the beginning of the year for espionage on behalf of Iran (see March 2012).
During the arrests, they were accused of planning attacks on US and Israeli
embassies in Baku.
The president grants opposition
President Aliyev pardons nine opposition prisoners sentenced to up to three
years for demonstrations in April 2011. Among those released are the party
Müsavat's Deputy Chairman Arif Hacılı.
Fighting at the Armenian border
Border battles with Armenia erupt on a couple of occasions and a total of
five Azerbaijani soldiers are killed. Both sides blame the violence on the fact
that forces from the other side have tried to cross the border. Struggles also
occur in the disputed area of Nagorno-Karabakh, which is located in Azerbaijan
but is largely populated by Armenians.
Demonstration in connection with Eurovision
A few days before the finals of the European Melody Festival, the opposition
is conducting a non-sanctioned demonstration near the mayor's office in Baku. A
number of protesters are said to have been beaten and arrested.
Legal demonstration is carried out
For the first time in a year, an official demonstration against the regime
will be held on April 8. According to the opposition groups that organized the
manifestation, about 10,000 people stand behind the demand for President
Aliyev's departure. The police state the number of participants to around 1,200.
Suspected Iranian spies are arrested
The Ministry of Security announces that 22 people have been arrested on
suspicion of spying on Iran's behalf. They are accused of being linked to the
Iranian Revolutionary Guard. The arrests must have taken place in January and
February. In February, the Azerbaijani authorities must have averted planned
attacks on the Israeli embassy and a Jewish center in Baku.
The governor is kicked for a rally
The governor of Quba in northeastern Azerbaijan is dismissed the day after
the city is shaken by rattles. One thousand people attack government buildings
in protest of the governor calling city dwellers "traitors" because they sold
land they had been allocated but could not afford to keep in condition. The
unrest is described as the most difficult outside Baku in many years.