VZCZCXRO5753
RR RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHKB #0801/01 1770809
ZNR UUUUU ZZH
R 260809Z JUN 07
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC 3341
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2213
RUEHNY/AMEMBASSY OSLO 0159
RUEHLO/AMEMBASSY LONDON 0365
RUEHBS/AMEMBASSY BRUSSELS 0171
RUEHNO/USMISSION USNATO 0619
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHVEN/USMISSION USOSCE 0592
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 BAKU 000801 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL PGOV AJ
SUBJECT: AZERBAIJAN HOLDS ENERGY TRANSPARENCY CONFERENCE 
AND WINS UN PUBLIC SERVICE AWARD 
 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION - 
PLEASE HANDLE ACCORDINGLY 
 
¶1. (SBU) SUMMARY:  On June 7, the State Oil Fund and Embassy 
of Norway collaborated to organize a conference highlighting 
Azerbaijan's successful role in the Extractive Industries 
Transparency Initiative (EITI) during the Caspian Oil and Gas 
show.  Oil Fund Executive Director Shahmar Movsumov and the 
Norwegian Ambassador (NOTE: Norway is the new host of the 
EITI Secretariat) chaired the event which included 
presentations by the British Ambassador and several 
international energy companies, including BP and Statoil. 
The presentations highlighted that Azerbaijan was among the 
first to join EITI in 2003 and to publish audited and 
reconciled EITI reports.  The EITI conference participants 
remarked that the Government of Azerbaijan (GOAJ) recognized 
early the urgent need for EITI as one of the means to avoid 
the macroeconomic distortions caused by an energy-driven 
economy.  END SUMMARY. 
 
¶2. (SBU) The EITI conference attracted a packed audience of 
oil company executives, NGO leaders and diplomats.  It was 
held during the Caspian Oil and Gas Show in order to maximize 
involvement by international participants.  State Oil Fund 
Executive Director Movsumov's presentation, entitled 
"Implementation of EITI in Azerbaijan," emphasized that EITI 
has already been fully accepted in Azerbaijan and noted that 
by implementing EITI the GOAJ has achieved full 
accountability and transparency in oil and gas revenue 
management.  Movsumov emphasized the importance of 
transparency in the investment environment adding that EITI 
could also assist in strengthening accountability and good 
governance, as well as promoting greater economic and 
political stability, in Azerbaijan. 
 
¶3. (SBU) The British Ambassador (representing the outgoing 
chairmanship) praised Azerbaijan for producing EITI reports, 
noting that earlier this year the Oil Fund completed its 
fifth set of EITI reports.  The British Ambassador stated 
that Azerbaijan is set to be the first EITI participating 
country to go through the validation process.  He noted that 
EITI was developing into a more international effort, with 
Azerbaijan and other countries demonstrating that it is 
possible to produce meaningful EITI reports which can 
contribute to better management of oil and gas revenues.  The 
visiting Norwegian Deputy Minister of Petroleum and Energy 
Anita Utseth echoed the sentiments of the EITI participants 
and positively assessed the experience of Azerbaijan in EITI. 
 
 
¶4. (SBU) Representatives from Azerbaijani State Oil Company 
(SOCAR), Statoil and BP also gave presentations at the EITI 
seminar.  SOCAR Vice President Suleyman Gasimov briefed on 
SOCAR's efforts in the EITI implementation process.  Statoil 
reiterated that Azerbaijan's participation in EITI was an 
important contribution to increasing transparency and the 
country's sustainable development.  BP noted that Azerbaijan 
was invited to become a member of the multi-stakeholder board 
that will manage EITI globally.  The Azerbaijan-based 
Coalition for Increasing Transparency in Extractive 
Industries also made a presentation about the role of civil 
society in EITI implementation. 
 
Comment 
------- 
 
¶5. (SBU) Azerbaijan's leadership in EITI is something the 
government is rightly proud to trumpet.  The United Nations 
announced in May that the State Oil Fund won the 2007 UN 
Public Service Award in the category of "Improving 
transparency, accountability and responsiveness in the Public 
Service."  The United Nations Public Service Awards is the 
most prestigious international recognition of excellence in 
public service.  The State Oil Fund is the first governmental 
agency of a country from the former Soviet Union to be 
awarded the UN Public Service Award. 
 
¶6.  (SBU) Comment Con't:  The Norwegian Ambassador privately 
commented that EITI has been a remarkable success in terms of 
making more transparent the process of transferring funds 
from the oil and gas companies to the Azerbaijani Government. 
 In order for EITI to have relevance for average 
 
BAKU 00000801  002 OF 002 
 
 
Azerbaijanis, however, the Norwegian Ambassador said that it 
must revise its mandate to include promotion of transparency 
in terms of how the government spends its oil and gas wealth. 
LU