On 1994, September 20, a big international contract was signed on joint oil development in three Azerbaijani deposits "Azeri", "Chirag" and "Gunashli" with the oil companies representing eight countries.

This contract is considered a turning point inthe with 150 years old history of the Azerbaijani oil industry and beginning of the oil strategy of the newly independent Azerbaijan. Entering history as "the Contract of the Century", this international oil project was of exceptional importance in the protection and strengthening the independence of Azerbaijan.

"The Contract of the Century" laid the grounds for the further projects in Azerbaijan. With the realization of this project Azerbaijan found more reliable political and economic partners in the world. After the signature of this contract the flow of investments to other spheres of the economy of Azerbaijan began. In total $ 40 billion has been invested to the economy of Azerbaijan in the past 14 years after the signature of the contract. (http://www.trend.az/)

A little after the signature of the "Contract of the Century" 43 more agreements were signed with 43 companies representing 27 countries and $ 60 billion further investment was made to the development of the oil industry of Azerbaijan according to these contracts. (http://www.socar.gov.az/)

After the signature of the "Contract of the Century" negotiations on the contract continued, a Steering Committee, the Azerbaijani International Operating Company (AIOC) and Advisory Council were established for the solution of technical, financial and organizational works. Activity of these bodies gained legal force after the confirmation of it by a special order of the President of Azerbaijan. The text of the "Contract of the Century" was ratified by the parliament of the Republic of Azerbaijan on December 12, 1994. Concrete activities started after lay-out of the legal basis for the implementation of the contract.

"BP" is a single operator of AIOC from June 1997. The budget of the working programs and special projects of AIOC is confirmed by SOCAR, the Azerbaijani government and Steering Committee representing the foreign oil companies.

The early oil was produced in the November of 1999 in the framework of the "Contract of the Century" and it increases monthly and year by year. For example, at the record level, 42,6 million ton of crude oil was produced in Azerbaijan in 2007. 8,8 million of it was shares of SOCAR and 33,8 million of the international consortium. Production increased by 33 percent or 10,3 million tons in comparison with 2006. (http://www.azerbaijan.com/)

Presently the shares of the companies in the contract are like this: BP-34,14% (G.Britain), UNOCAL-10,28% (USA), SOCAR-10% (Azerbaijan), INPEX-10% (Japan), Statoil-8,56% (Norway), Exxon Mobile-8% (USA), TPAO-6,75% (Turkey), Devon-5,63% (USA), ITOCHU-3,92% (Japan), Delta-Hess-2,72% (Saudi Arabia).

In 2002 "LUKoil" of Russia sold its 10 percent share to Japan's INPEX at $ 1,375 billion.

Until mid-2006, the Azerbaijani oil was exported to the world market via Baku-Novorossiysk and Baku-Supsa pielines with 5-7 million of ton capacities per year. But in 1994, Heydar Aliyev proposed the construction of a pipeline with much greater capacity of a main pipeline with greater production could grow to 50 million tons from "Azeri-Chyrag-Gunashli" deposit. In 1998 the Baku-Tbilisi-Ceyhan route was chosen for the main oil pipeline as an expedient option. In September 2002, a foundation ceremony of the pipeline was held in Baku. The early Azerbaijani oil was pumped in the May of 2006 and the economy of Azerbaijan started to develop rapidly with it. Taking into account matchless services of Heydar Aliyev in the implementation of the project, the share-holders named BTC pipeline after Heydar Aliyev in 2004.

Since 2007, the Republic of Azerbaijan started to conduct the policy of to export to the world energy market not only crude oil, but also oil products. In 2007, 7 million 504 thousand ton of oil was refined in the oil refineries of Azerbaijan. It is more for 0,7 percent or 53,4 thousand tons than in 2006. The construction of a new oil refinery with 200 thousand barrel capacity started in the Turkish port of Ceyhan, the Mediterranean shore, where a great amount of the Azerbaijani oil is exported. In spring of 2008, the Kulevi terminal, which belongs to Azerbaijan, in Georgia was put into operation. (http://www.socar.gov.az/)

The infrastructure of Azerbaijan allows deliver the Central Asian oil and gas to Europe. SOCAR also actively participates at the joint oil construction venture "Sarmatiya", which was established to extend the Odessa-Brody pipeline to Plotsk. (http://www.azerbaijan.com/)

Evaluating this historical event at the ceremony of the signature of the "Contract of the Century" Heydar Aliyev said in his speech: "I am very happy to participate in development and signature of this contract. I perceive the responsibility which I assume and hope that the future generations will adequately appreciate the historical event which is taking here today".

Historical background was updated on July 2, 2008