Prime Cost of SOCAR Oil Production Increases 25%

Azerbaijan, Baku, 14 July / Trend / The prime cost of trade oil in 2007 made 436.3mln manat as compared to 377.9mln manat in 2006, with the cost of 1 ton of oil being 57.74 manat as compared to 48.57 manat in 2006, SOCAR 2007 report says.  

In 2007 the SOCAR's total oil production costs break down as follows: salary 17.2%; deductions on social insurance - 4.2%; depreciation charges - 18.0%; materials costs - 17.3%; royalty - 19.9%; land tax - 1.3.

The report says that There generated an increase in oil self-cost through 2.9% declining of commodity production along with 35.6% rise in production cost (without mining tax). As compared to the last year, there emerged a markup in energy expenditures such as 6701 ths manat (53.4%), in fuel costs as 4631 ths manat (30.5%) and wage-and-salary disbursements (including social insurance contributions) as 23494 ths manat (35.1%).

In general, the SOCAR administration takes successive actions for upgrading of oil-engineers' salaries as compared to modern oil companies. It is evident from comparison with percentage of salary costs in oil cost price. Nevertheless this percentage totaled to 10.6% in 2004, it reached to 12.9, 14.8 and 17.2% respectively within 2005-2007.