Final address by Heydar Aliyev, the President of the Republic of Azerbaijan at the meeting held with the Executive Committee members of the project on the "Shahdeniz" oil field Contract. Presidential Palace, March 5, 1997

Dear ladies and gentlemen!

The meeting of the executive committee members of the project of "Shahdeniz" oil contract has taken place today. At this meeting were discussed the issues of implementation of the project of "Shahdeniz" oil contract. I was informed about this earlier. Today, I have invited here the members of the executive committee in order to get informed about the work carried out by them and about the program envisaged.

On February 28 we met with the members of the executive committee on joint extraction of the project of the first oil contract signed on September 20, 1994, on the deposits of "Azeri", "Chiraq", deep-water part of "Guneshli" and also with the leaders of AIOC. The reports about the work carried out for the last years and also contemplated work in forthcoming 1997and 1998 were listened.

Today we are interested in the issues of implementation of contract on joint extraction of "Shahdeniz" deposit. I think that taking under our control the implementation of the other signed projects of contracts, we will also conduct similar meetings with them. With a feeling of satisfaction I want to note that the executive committee of the project of "Shahdeniz" contract was engaged in these problems in time. They have discussed these questions today. I will listen to them with satisfaction.

Final speech

First of all, I am very pleased that the contract on the joint exploitation of the Shahdeniz oil-gas field (later it will be clear whether it is an oil or gas field) signed in the last June has actually been carried out in a such short period of time. The contract was approved on October. So five months have passed since then. I think one must evaluate the work done in this period positively.

In this report Mr. Shearman gave us information about the work done in this short period. He also spoke about future plans, programs. It becomes clear from the information that the Shahdeniz oil-gas field is a very rich and promising field in the Azerbaijan sector of the Caspian Sea and the contract on its joint exploitation is of great importance. On listening to the information today I can say with great hope that the contract will have very good results.

The companies carrying out this contract have great and rich experience. British Petroleum, Statoil, ELF Aquitaine, Lukoil, the oil company of Iran, Turk Petroleum of Turkey is very experienced companies. I am repeating, companies with great and rich experience. Their joint work, the organization of the work within such a short period, no doubt must be appreciated.

It is natural that this consortium, I mean the companies involved in this project, Azerbaijan State Oil Company is also included here, are doing all the work directly with the Azerbaijan State Oil Company. I am pleased that it is planned to carry out most of the work jointly with the Azerbaijan State Oil Company, with the industrial enterprises and companies of our Republic. The Shahdeniz oil-gas field is a very complex field. The depth of water in its site reaches 400-500m. It has been told here that the depth of the well to be drilled there will be 6 thousand meters. All this shows that we have not worked in such a field in the Caspian before.

I am sure that the opportunities and the experience of the companies involved in this project, at the same time, the expertise of the Azerbaijan specialists, oil industry workers will help us to work in this field successfully and achieve good results by using progressive world technology and experience. But we have some fields in the deeper sites than this one in the Caspian. That is why the work to be done and the results to be obtained in the Shahdeniz will enable us to work in the deeper sites than this one.

I want to tell our friends that they already have their rivals. For example, the president of the US company Exxon recently came to me, we had a meeting. He told me that they were working in the site with the water-depth of 700m and they have a great experience in this sphere. That is why they are greatly interested in our fields situated in such sites and have addressed me in this connection. I assume that they will get an opportunity to work here and our experience to be obtained in the Shahdeniz will enable us to work in this connection too.

When giving information about the program of carrying out the project, Mr. Shearman also stated its terms. Some terms were also indicated when the contract was signed. It was pointed out that 3 years were allotted only for exploration work and within that period of exploration all the data of the field should be defined completely.

I assume that the nice organization of ours, the executive committee of the project will arrange the matters in such a way that the achievements will possible be obtained sooner than 3 years period. I think so. You have noted that you will get the oil within 9 years period. But at the same time you said that you would be able to do it within the period of 4 years. I hope you will make the program more packed and reduce these periods by working with enthusiasm and achieving good results. Because it is necessary both for you and us. We all need to conduct this work fast and get the final results.

As the same time, when listening to your report I realized once more that we were right to have signed the contract on the joint exploitation of the Shahdeniz field last June.

I mention it because when we were discussing this issue some people surrounding us, or working with us as well as some outsiders considered that we were not to sign this contract. They said that we should wait and start the exploitation of the Shahdeniz field in the future with the allocation obtained from the first Contract. Now you can imagine how much time we needed to get oil and income from the first contract, to create some technology and only then to start the exploitation of the Shahdeniz field once you start the work like this. It is obvious how much time it will take in the future. The people against or doubtful about such kind of contract on the one hand do not realize these issues, on the other hand want to hinder the progress of Azerbaijan and our work. Today`s discussion obvious shows that we were right to sign the Shahdeniz contract, the Garabagh contract, the Ashrafi-Dan-Ulduzu Contract as well as Lenkaran-Deniz-Talysh-Deniz contract. All of them should start at the same time. It takes a lot of time to carry out each of them, to obtain the final result, and for our Republic to benefit from them. First they said that the repairs and modernization of the drilling installation Dada Gorgud would need $ 37 million, and they state that $40 million have been spent it was told here that $115 million are required to prepare and modernize the installation Shelf-5 according to the information, little will be left from its main part, and to reinstall it with quite a new technology. You can imagine how much expenses are needed to carry out this work, to create certain technology.

These facts prove once more that we are on the right way in the solution of these problems and will further follow this way. We`ll cooperate with the major oil companies of the world we`ll achieve the rational use of the resources in Azerbaijan. I take into consideration Mr. Shearman`s all promises; I will follow the fulfillment of these promises in the future too. I assume that they will be able to accomplish this work even earlier than the due time. The Azerbaijan State Oil Company knows its obligations in this project.

But I want to point out again that you must try hard to carry out this program. I kindly request you to make maximum use of the potentials of the Azerbaijan industrial enterprises, specialists, generally, the human resources of our Republic.

I take into consideration your promises about it.

I hope you will keep them. At the same time, I understood, I also want it that the Azerbaijan industrial enterprises, specialists, the manpower, the workers of our Republic will be attracted to these processes more and more. I ask the Prime Minister Arthur Rasizadeh to control these issues and take measures in due time if there is any problem in the use of the Azerbaijan industrial enterprises, companies and factories in the fulfillment of this project.

Mr. Shearman, I kindly request you and the executive committee members not to be confused when confronted with the challenges instead to address me, particularly the Prime Minister. I entrust him with these issues. You have mentioned here that in case it is impossible to carry out your orders in Azerbaijan, you have them prepared in Leningrad, do it, please, or if something else must be done in the Western countries, do it, please. But at the same time I kindly ask you to think specially of the devices, technology which can be produced at the enterprises of Azerbaijan.

Mr. Shearman pointed out that in the oil sphere of our Republic there are five contracts signed with the well-known oil companies from many countries of the world and also body to carry out each of these contracts the executive body for the first contract is the consortium, the International Operating Company, there is an executive committee for each of the contracts signed further. I am of the opinion that there must be close relations among these organizations, staffs in order to solve the problems fast and rationally. These staffs should work in close relations with each other. Both you and we take into consideration the fact that this joint work is more required for the accomplishment of many objectives that is the creation of the infrastructure, that construction of the oil pipelines, terminals or the establishment of the enterprises, which can be rationally used in future when carrying out all the contracts. That is why you need to work in close relations with each other.

I am very pleased with Mr. Shearman`s information about your exchange of opinions and experiences. But I think these relations must be closer in the future, now we have 5 signed contracts. I think it is possible to arrange the meeting of the organizers carrying out the projects of each of these contracts together in one place and discuss the issue of mutual relations. I undertake this obligation on myself. At last, I want to conclude our meeting and tell you that you have done a great job in such short period of time, only 5 months. I congratulate you on the work you have done. I wish you to carry out the program for 1997 earlier than the due time. You can address me in the process of the work whenever there is need for it. I am always ready to listen to you.

You should know that the fulfillment of this project as well as the projects of all other contracts is one of the main priorities of Azerbaijan State. These issues are under my personal control. I wish you success in the fulfillment of the program you have announced today.

Good-bye, see you soon.

Brief essays


General historical background