Master's Dissertation
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THE MINISTRY OF EDUCATION OF THE REPUBLIC OF AZERBAIJAN AZERBAIJAN STATE UNIVERSITY OF ECONOMICS INTERNATIONAL GRADUATE AND DOCTORATE CENTER MASTER’S DISSERTATION “Geoeconomic aspects of usage of oil and gas resources of Azerbaijan” BY Quliyev Murad Neriman Major: 060401 - World Economy Specialization: International Economic Relations Supervisor: Head of the International Graduate and Doctorate Center: A.Y.Rzayev, PhD in Economy A.H.Ismayilov, PhD in Economy Head of the Department of International Economics: A.H.Ismayilov, PhD in Economy BAKU - 2018 CONTENTS Introduction ................................................................................................................. 3 CHAPTER I: THEORETICAL ASPECTS OF GEO-ECONOMIC APPROACH TOWARDS NATURAL RESOURCES .................................................................... 6 1.1. Conditions for the formation of world income in the geo-economic space ........... 6 1.2. Modification of oil ad gas production in the geo-economic space ...................... 12 1.3. Geo-economic approach to evaluation of oil and gas resources of a country ..... 20 CHAPTER II: THE CURRENT STATE OF GEO-ECONOMIC ASPECTS OF THE USEAGE OİL AND GAS RESOURCES IN AZERBAİJAN ..................... 25 2.1. The current state of Azerbaijan 's oil and gas complex and its place in the development of the economy ...................................................................................... 25 2.2. The main directions of export of oil and gas resources of Azerbaijan ................ 32 2.3. Azerbaijan’s oil and gas contracts on terms of geo-economic interactions ......... 43 CHAPTER III: PROSPECTS OF DEVELOPMENT GEO-ECONOMIC ASPECTS OF THE OIL AND GAS RESOURCES IN AZERBAIJAN ............. 49 3.1. Prospects for the development of the oil and gas complex of the Azerbaijan Republic within the framework of the EU energy space ............................................ 49 3.2. Directions of integration oil and gas sector of Azerbaijan into international value chains ........................................................................................................................... 56 3.3. Main directions for government support of transnationalization oil sector enterprises ofAzerbaijan .............................................................................................. 64 Conclusion .................................................................................................................. 73 References .................................................................................................................. 75 Abstract ....................................................................................................................... 82 Xülasə .......................................................................................................................... 83 Резюме ........................................................................................................................ 84 2 Introduction The relevance of the subject. A comprehensive analysis of the trends in the development of the system of international relations shows that at the beginning of the 21st century, one of the main dominants of planetary macro-dynamics is the geo- economic factor. Obviously, the sharp increase in global competition in the energy sector, the situation when the struggle for "black gold" and the ways of its transit becomes an integral part of world politics, allow us to talk about allocating a geo- economic element from a set of other geopolitical aspects. In this context, an important question is the question: what is the role of the energy factor in the dynamics of internal socio-political changes in Azerbaijan - a significant "player" in the world hydrocarbon markets. Political processes inside and around Azerbaijan, of course, contain a special, energy context. The most pronounced role of the oil factor and the transition of Azerbaijan to the category of classical "petro-state" is demonstrated by structural changes in the economy of the republic in the post-Soviet period: the share of the fuel and energy sector in the total volume of industrial production increased from 16% in 1991 to 73% in 2001 The key role of oil in Azerbaijani politics (and in the policy of external actors in relation to internal processes in the Republic) was widely covered in contemporary historical and political science literature. This topic is considered in the works of J.Sultanov, J.Mahmudov, G.Kuliyev, E.Huseynov, V.Mamedov, P.Darabadi, E.Muradaliyeva, my supervisor – Anar Rzayev, Vusal Gasimli, Mushfig Atakishiyev, F.Rahimli, M.Jamilov, Adalat Muradov and the other authors. At the same time, it should be emphasized that the overwhelming majority of them focused their attention on the external geopolitical component and considered Azerbaijan either in macro contexts (as an important but still local figure on the Eurasian chessboard) or, from the point of view of the influence of the "oil factor "On the macrohistorical dynamics of the Azerbaijani statehood. At the same time, practically no field of scientific and political interest was a no less significant question: how is the "oil factor" influences 3 the development of the political regime and the internal political situation in the republic. Object and duties of the subject. The principle is geo-economic aspects of usage of oil and gas resources of Azerbaijan. This work greatly search, collect and analyze all main points of geo-economic aspects of oil and gas sector. The subject of the research are the ways and mechanisms of improving geoeconomic usage of oil and gas resources of Azerbaijan. The main objectives of this work are influencing theoretical aspects of geo- economics’, current state oil and gas resources in Azerbaijan and development geo- economic aspects of the oil and gas resources in Azerbaijan. Structure of the subject. The structure of this thesis contains to the particular plans. It starts with the presentation took after by three main chapters. In the first chapter is a theoretical aspect of geoeconomic’s. This chapter divided 3 subchapters. First subchapter of the primary chapter is Problems of development of geo- economics. The second subchapter is modification of oil and gas production in the geo-economic space. The last subchapter of this chapter is conditions for the formation of world income in the geo-economic space. Second chapter of my dissertation work is the current state of geo-economic aspects of the usage oil and gas resources in Azerbaijan. This chapter also divided 3 subchapters. First subchapter of this chapter is the current state of Azerbaijan’s oil and gas complex and its place in the development of the economy. The second subchapter of this chapter is the main directions of export of oil and gas resources of Azerbaijan. The last subchapter of this chapter is Azerbaijan oil and gas contracts on terms of geo-economic relations. Finally, the last - third chapter of this work is prospects of development geo- economic aspects of the oil and gas resources in Azerbaijan. As first and second chapters this chapter also divided into 3 subchapters. First subchapter of this chapter is model of the Azerbaijan oil and gas market: expectations and realities. The second subchapter of this chapter is prospects for the development of the oil and gas complex of the Azerbaijan Republic within the framework of the EU energy space. Finally, the 4 last subchapter of this chapter and at all whole work is development ways ggeo- economic aspects of Azerbaijan’s oil and gas resources. Scientific innovation of the master dissertation. As we know that economic relationship influence all our work and that is why learning, analyzing, teaching this section is so important. My work is also important for scientific using. Here was giving necessary information about sectors which geo-economic aspects of the oil and gas take great role in Azerbaijan and world economy. Dissertation work contains whole tables, graphs, diagrams and etc. That is why it can be used for different aims. Method of the research. The general scientific methodology of scientific research is the most general form of the organization of scientific knowledge (scientific and cognitive activity) in my thesis work, which contains the principles of building scientific knowledge, ensuring the correspondence of its structure and content to research tasks, including its methods, verification of the truth of the results and their interpretation an abstract-logical method used to construct a theory and including diverse techniques and operations. Another method which I used is the system approach to determine the place of the research subject of the dissertation. For empirical analysis, I used secondary data and findings retrieved from the official documents of the Republic of Azerbaijan, oil documents signed by the President of the Republic of Azerbaijan, the various literary publications, articles, including the mass media data and speeches of the President of the Republic of Azerbaijan, works of the national and foreign economists and data obtained from the State Statistical Committee. After analysis quantitative points of the empirical research, I made clarifications by the qualitative method. In this point, I applied statistical-probabilistic method, which makes it possible to realize a quantitative approach to the study of scientific data in unity with qualitative analysis. 5 CHAPTER I: THEORETICAL ASPECTS OF GEO-ECONOMIC APPROACH TOWARDS NATURAL RESOURCES