Speech of the Azerbaijan President Heydar Aliyev at the opening ceremony of International "Caspian oil and gas - 2000" exhibition and conference held in Baku, June 6, 2000

Dear ladies and gentlemen!

Dear visitors!

I cordially congratulate you on opening the international exhibition and conference "Caspian oil and gas - 2000" and I wish successes to work of exhibition and conference.

Azerbaijan is an ancient oil country. It is known that oil production by industrial way has 150-year history. However, our exhibition - "Caspian oil and gas" exhibition has 7-year history. Seven years ago, in the beginning of realization of independent Azerbaijan Republic`s oil strategy, when the large oil companies of the world have shown big interest to our republic, the English company "Spearhead Exhibitions LTD" together with Commercial and Industrial Chamber of Azerbaijan has initiated holding such exhibition. First such exhibition took place in 1994. Now it became already a tradition. Today we are participants of the seventh exhibition.

We may ask, why were not held such exhibitions before in Azerbaijan, in Baku, - despite, the huge part of all world oil was extracted in Azerbaijan? We ask, in that case why Azerbaijan, Baku was not known as one of the oil and gas centers of the world till today?

Answers to these questions are known: the reason is that, first, Azerbaijan has found its state independence and as the independent state, taken its place in the world community, become the owner of its natural riches, started realization of necessary new measures for their use. Secondly, independent Azerbaijan, its state has developed new oil strategy on development of the economy and use of rich natural resources, including oil and gas, and has started its realization.

Carrying out oil strategy of the Azerbaijan state, in 1994, the State Oil Company of Azerbaijan signed the first contract on joint development with several large oil companies of the world on deposits "Azeri", "Chirag" and a deep part of a deposit "Guneshli" in the Azerbaijan sector of the Caspian Sea. At that time this contract has made a noise in the world, caused a wide resonance and it is not casual that it was named "the Contract of the century".

Thus, realization of oil strategy of the Azerbaijan state has caused interest by the large oil companies of many countries of the world in our republic, and in a short term, from the historical point of view - within 5-6 years Azerbaijan, the Caspian Sea have turned to one of the largest oil and gas centers of the world.

For a short time, the State Oil Company of Azerbaijan signed 19 contracts with the large oil companies of the world; volume of investments planned for realization of these contracts, exceeds 50 billion dollars.

Oil strategy, courageous policy and practical measures, carried out by the Azerbaijan state, have allowed not only to our country, but also the near-Caspian states to use rich oil and gas resources in all Caspian Sea basin and consequently the large companies of the world began to show interest in oil and gas deposits in other sectors of the Caspian Sea.

We note with satisfaction that today in other sectors of the Caspian Sea discovery, investigation of oil and gas deposits was started, good results were received in many cases, realization of practical works was started by each near - Caspian state in its sector. Thus, the Caspian Sea basin has turned already to one of the largest oil regions of the world.

We are proud that we have begun this work. We are proud that we have opened rich oil and gas resources of the Caspian Sea to world economy, world community. We are proud that today other near-Caspian countries - Russia, Kazakhstan, Turkmenistan and Iran - together with Azerbaijan have started development of oil and gas deposits in sectors of the Caspian Sea belonging them.

Last years, the work, which was carried out by us in this field, has met a lot of difficulties, obstacles. On the one hand, interest of the large oil companies in oil and gas deposits in the Azerbaijan sector of the Caspian Sea has increased. On the other hand, some circles, trying to prevent such development of Azerbaijan`s economy, published various materials, made statements that ostensibly there was no such quantity of oil in our country, it did not have future, and even, they took different measures.

However, we have not retracted our will, we consistently carry out work and as you know, we have achieved practical results now. First, in 1997, as realizing "the Contract of the century" on a deposit "Chirag" more oil was extracted than it was expected, and questions of its export were solved, two export oil pipelines were constructed: Baku-Novorossiysk and Baku-Supsa. Today the extracted oil is transported on these pipelines to the world markets.

It is known, there is no need to prove that there are rich oil and gas deposits in the Azerbaijan sector of the Caspian Sea. They, naturally, will be extracted and be transported to the world markets. And for this purpose, in 1994, the decision was accepted on construction of the Baku-Tbilisi-Ceyhan main export oil pipeline.

For the recent years we, that is, the Azerbaijan state, Turkish Republic, Georgia and oil companies of other states participating in "the Contract of the century", have done necessary work in common for construction of the Baku - Tbilisi - Ceyhan main export oil pipeline. This work has been realized with greater difficulties. I repeat that we have faced with a lot of difficulties in this matter. However, it is pleasant that we managed to overcome these obstacles. All agreements, contracts on the Baku - Tbilisi - Ceyhan main export oil pipeline have been already signed. These documents have been ratified by parliaments of Azerbaijan, Georgia, within the next few days it will be ratified by parliament of Turkish Republic too. Thus, we will start implementation of the large project.

As I said, if the work, carried out in the field of construction of the Baku - Tbilisi - Ceyhan main export oil pipeline within five years, on the one hand has been connected with realization of our will, on the other hand we have faced with different objectives to prevent the implementation of this project from various directions.

However, one of the basic stages in realization of this project is the declaration which was accepted in October, 1998 in Ankara. This declaration was signed by President of Turkey, President of Azerbaijan, President of Georgia, President of Kazakhstan and President of Uzbekistan. This declaration was signed also by Mister Richardson, United States Secretary of Energy.

The second decisive stage again became the declaration signed in November at the OSCE Istanbul Summit by presidents of Turkey, Azerbaijan, Kazakhstan and Georgia, and also by the United States President Mister Bill Clinton.

The Istanbul declaration and all the agreements, signed in this connection in Istanbul, have completely provided construction of the Baku - Tbilisi - Ceyhan main export oil pipeline. Practical work is now underway. Recently, state oil company of Azerbaijan has held conference for sponsors of construction of this pipeline. The detailed information on the pipeline has been given at this conference. I think that work will go more quickly after that. I believe that the Baku - Tbilisi - Ceyhan main export oil pipeline will be constructed completely and put into operation in 2004.

Some people think that now there is no enough oil to export through the main export oil pipeline. Therefore, some people as a whole, consider it unnecessary business, and others think, it is still early to begin construction. These are false opinions because, according to the minimum prognosis, extraction of 4-5 billion tons oil is expected in only the Azerbaijan sector of the Caspian Sea.

If we consider that those documents, the declaration were signed by Kazakhstan as well and the oil extraction in a plenty is expected in the Kazakhstan sector of the Caspian Sea, and big work will be carried out in Azerbaijan after that, then we can imagine how much Baku - Tbilisi - Ceyhan main export oil pipeline is necessary.

According to our scientists, experts, there are so rich oil and gas deposits in the Caspian Sea and even these pipelines will be insufficient. Therefore, the Azerbaijan state considers that other alternative oil pipelines can be constructed in the future for transportation of oil extracted in the Caspian Sea to the world markets, and we do not refuse these ideas.

The Caspian is still the sea of many secrets. As you know, four years ago, the contract on joint development of a deposit "Shahdeniz" in the Azerbaijan sector of Caspian Sea was signed between the State oil company of Azerbaijan and many foreign companies when such exhibition was held. Today with feeling of boundless pride I inform you that this contract has yielded now fine results. Two wells, drilled there, showed an opportunity to get more than one billion cubic meter of gas on the deposit "Shahdeniz".

As a whole, under the forecasts of our experts - their forecasts have always been justified and I am very glad that there are such broad-minded experts in Azerbaijan, - at least extraction of four billions cubic meter of gas is expected in the Azerbaijan sector of the Caspian Sea. Today we think to solve a question on gas export in the future to the world markets and we take practical measures for this purpose. I consider that together with the companies working with us and their states we will solve it too.

Informing you in brief about the work done in the Azerbaijan sector of the Caspian Sea, on the one hand, I want the companies, which show interest in oil and gas deposits of our republic both in onshore and offshore, to establish communications with us in the future as well. At the same time, I want to encourage other near-Caspian states - Russia, Kazakhstan, Turkmenistan and Iran with my ideas to carry out more active work in their sectors in the Caspian Sea after that.

As you know, there are a lot of experts in Azerbaijan, engaged in investigation, extraction of oil and gas in the sea. We are ready to assist all near-Caspian countries, our neighbors in this field.

In last years, various negotiations have been carried on a legal status of the Caspian Sea. As a whole, various opinions have been stated to the public, to the world community concerning it. Since 1994, Azerbaijan has been supporting discussion and definition of a legal status of the Caspian Sea by all near-Caspian countries. We also support it today and are ready to any discussion.

I consider that we should discuss this question and come to the common opinion, make common decision. But it is not necessary to impede each other or to distribute various opinions.

You are witnesses that the large oil companies of the world and many other companies, which are involved by them to carry out their works, work successfully, quietly and fruitfully in Azerbaijan for last 5-6 years.

In 1994, we declared that the Azerbaijan state was going on a way of market economy, our republic was aspiring to cooperation with all countries of the world, to attraction of foreign investments to the country for development of the economy and was incurring implementation of all conditions necessary for attraction of these investments to Azerbaijan.

Today with feeling of deep satisfaction, I say that we have put into practice all the statements and we have been loyal to those.

There are some conditions for foreign company, for each businessman to work in other country. The first of them is social-political stability in this country. We have provided social-political stability in Azerbaijan. However, it was not easy for us. The companies and their representatives, which have been working together with us since 1994, saw that we have faced with a lot of facts of terror, attempts at coup d`etat for providing stability. However, we have prevented them, cleared Azerbaijan from criminal groups, created a healthy atmosphere in our country and completely provided political stability.

We well know that corresponding laws, the Law on taxes, other laws are necessary for flow of foreign investments to Azerbaijan. These laws should create conditions for each investor arriving in Azerbaijan to work effectively and confidently. We have passed these laws; they have created all opportunities for fruitful work of investors arriving in Azerbaijan. However, this process proceeds. Necessary laws will also pass in our country henceforth too. I assure you that we are very interested in flow of foreign investments to Azerbaijan and we will create all necessary conditions for this purpose.

One more condition has also extremely great value for fruitful activity of the foreign companies, investors in oil, gas and other spheres in Azerbaijan. It consists of that there are experts, engineers, techniques of a high level and the experienced workers in Azerbaijan who are capable to work in the sea in heavy conditions. In recent years, the foreign companies were convinced that our staff in this field answers high standards and to work with them is easy.

Azerbaijan is legal, democratic state. It is carried out and will be carried out all necessary work in Azerbaijan to ensure democracy and the pre-eminence of law. As a matter of fact, it is also one of the basic conditions for activity of foreign investors in Azerbaijan.

Thus, as the President of Azerbaijan, speaking today before participants of the seventh exhibition, I declare with feeling of boundless pride that the state oil strategy of independent Azerbaijan is successfully carried out and it also opens good opportunities for development of Azerbaijan`s economy. It creates fine opportunities to strengthen the state independence of Azerbaijan even more and to make it irreversible. All these lead us to the great future with you.

I consider that the cooperation is very effective with the companies, which have arrived in our country, in realization of the state oil strategy of Azerbaijan, in signing of contracts and in their practical implementation. I do not doubt that they meet here high hospitality and an atmosphere of kindness. I express my gratitude to all foreign companies, foreign citizens working in our republic for this cooperation and innovations which they have introduced to Azerbaijan in this field.

Today we hold the seventh exhibition. It is the last exhibition which we conduct in XX century in this field. We step towards XXI century, the third millennium. There is no doubt that gaining the state independence by Azerbaijan in the end of XX century and its achievements, successes in development of all fields and in particular, achievement of enormous successes in realization of oil strategy as the independent state, have put in pawn a basis for more development of Azerbaijan with confidence in XXI century.

Dear friends, our contracts, signed with you and the work, done for the last years have created a good basis for XXI century. These are contracts of XXI century, contracts of the future generations. I hope that the future generations will continue even more actively grandiose work carried out by us.

We will conduct the eighth exhibition "Caspian oil and gas" in 2001, in the first year of XXI century. This exhibition will have extremely great value. I am sure that it will be held even at a wider and higher level.

I express gratitude to the British company "Spearhead Exhibitions LTD", to Commercial and Industrial Chamber of Azerbaijan, all companies, everyone who took part in the organization of this exhibition. I wish you new and new successes, new and new contracts, new and new cooperation in work of exhibition and conference.

Thank you.

Brief essays


General historical background