The Oil and Gas Law of the Azerbaijani Republic (Draft)

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The Oil and Gas Law of the Azerbaijani Republic will govern the ownership, exploration, production, and development of oil and gas in the country.[1] However, despite being circulated among the government, industry and parliament since at least 1998,[2] as of 2009 no final law had been passed governing the oil and gas sector in Azerbaijan.[3]

According to the Economist Intelligence Unit, the principal contribution of the draft law would be to outline a procedure and some level of predictability for concluding Production Sharing Agreements (PSAs) without the need for parliamentary approval, noting that it was remarkable that a large number of PSAs were concluded during a period when there were virtually no modern laws on oil and gas, concessions and PSAs. Instead each PSA had to be approved by the national parliament, the Milli Majlis. It is suggested that the government is reluctant to adopt oil and gas laws that might change the existing PSA process polished over the years. To appease the concerns of the foreign parties to existing PSAs, the draft would 'grandfather' (exempt) not only already concluded PSAs, but also those in the process of negotiation at the time the draft becomes law.

Rather than any drastic changes to the existing PSA regimes, the draft law was designed as a codification of the basic concepts found in existing PSAs, in line with the government's desire to continue attracting investment into the oil and gas sector. [2]

External Links

The Oil and Gas Law of the Azerbaijan Republic: April 2000 draft


  1. "Azerbaijan - Oil Law" Revenue Watch Institute, retrieved 23 August 2012.
  2. 2.0 2.1 "Azerbaijan Country Report" Economist Intelligence Unit, retrieved 23 August 2012.
  3. "Analysis of Azerbaijan Oil and Gas Sector" United States Association for Energy Economics 2009.