Glossary of terms used on this siteThere are 83 entries in this glossary.
|Oil Market Price, $/Bbl:
Current price of a barrel of oil. In the C. I. S. countries, it is usually a tricky subject to be negotiated. In some countries (e.g. Kazakstan, Russian Federation), there is no domestic control or restrictions on the investor's share of production, except a transfer tax. In this case, the oil market price is the current price of a barrel of oil in western markets. In case of Azerbaijan, a certain production curve is depicted. It presumably represents (and almost always much higher than) the current field production and a production forecast over the project period. The amount of production below this curve is expected to be sold domestically at a price unjustly set by the hosting government. This price is allowed to increase at a certain low rate over the years. The "above the curve" production is expected to be sold abroad at western market prices by the investor. The Agreements mostly include closes that demand the investor to market also the hosting partner's (usually the government) share of "above the curve" oil. In reality, because of lack of easy export possibilities, such as adequate pipeline network and other transportation facilities, the total production is usually sold to the Azeri government at local prices. The Azeri government expects the currently low domestic oil prices to reach the western market prices following the AIOC marketing of the "early oil" planned to start in 1999 or early 2000. Therefore, in practice, a domestic price is assigned for each year of the project until 1999.