From the talk of Heydar Aliyev, President of Azerbaijan, with the delegation of BP Amoco - November 14, 2000

Heydar Aliyev: Welcome! How are you?

David Woodward: Thank you, Mr. President. Fine.

Heydar Aliyev: You are always here. You are our citizen.

Mr. Adams stayed here for a long time. You replaced him. I highly appreciate the activity of Terry Adams. I regretted his departure. But now I see you replace him well.

Heydar Aliyev (addressing Andy Inglis, BP Amoco Vice President on the Caspian region): Have you come from England? Please.

Andy Inglis: Mr. President, thank you. I am glad to be in Azerbaijan. I visited your country for the first time in 1993 with Mr. John Brown. Then BP just started its operation in Azerbaijan. We are satisfied with the successes up to now. I had a talk with Mr. John Brown about the successes in your country. He is also satisfied with them. He asked me to deliver to you his letter. In this letter he expresses his satisfaction with the contract on the project of the Baku-Tbilisi-Ceyhan. He also expresses the hopes of BP in the implementation of the contract on joint developments in the oil deposits of "Azeri", "Chirag" and the deep water-portion of "Guneshli".

As you know, that area in the Caspian Sea is of great significance for BP. Our company has sent the most capable, experienced representatives to Azerbaijan. I am glad that you are satisfied with Mr. Woodward's activity. In other words, from the point of view of our company, we are pleased of the successes.

If you don't mind, Mr. Woodward will inform about the activity of BP in Azerbaijan. Now we are presenting the documents on the work done by BP for the implementation of the contract on joint developments in the oil deposits of "Azeri", "Chirag" and the deep water-portion of "Guneshli".

David Woodward: Mr. President, we know how limited your time is. Thus, I will only mention the figures regarding to the presentation. Let me say that it is real to increase the oil production in the "Azeri" oil deposit up to 5 million tons this year. As you know, the forecasted income for Azerbaijan will be equal to USD 150 million this year.

Mr. President, the most part of this income comes from the oil exported via the Supsa terminal, the rest - from the oil exported through the Northern oil pipeline.

Heydar Aliyev: I see.

David Woodward: Mr. President, our plans for the next year imply a 15% increase of the oil production in the "Chirag" oil deposit.

Heydar Aliyev: Will the production be 5,075,000 tons? 

David Woodward: As a result of our negotiations and joint ventures with SOCAR, we plan to increase the gas production in "Chirag" since next February.

Heydar Aliyev: Now you produce 1.8 bcm of gas. And you want to increase it up to 2.4 bcm of gas.

David Woodward: We intend a 30% increase.

Heydar Aliyev: But recently there have been some problems; the gas wasn't produced. Ii doesn't please me.

David Woodward: Mr. President, you are right. The main reason was the conducting of some operations on the platform. SOCAR was informed about it. Now I can say that those operations have been finished. We have achieved the maximum production of gas in the platform.

Heydar Aliyev: When?

David Woodward: Since yesterday evening.

Heydar Aliyev: I understand that you might have some operations, problems on the platform. But you know that how important gas is for our people in autumn and winter seasons. Because of some technical problems you can not provide gas; maybe you are not so concerned. However, the people in Azerbaijan are dissatisfied with it. I must accept this dissatisfaction. Therefore, I ask you to try not to have such problems any more. Especially, in the autumn-winter season such problems must be removed. Moreover, a part of the associated gas is emitted into air, which concerns us. Our public is aware that a part of the gas is not delivered onshore and used here.

It happened because of the mistake of SOCAR and you. I am explained that even you didn't expect so much oil and gas there. SOCAR has the same explanation. It is a defect at your work. You should have determined it correctly. However, what has passed is past. I am saying it, because I don't want such cases to emerge again. Please.

David Woodward: Mr. President, let me briefly inform you about the Baku-Tbilisi-Ceyhan pipeline. We are pleased of the start of the main engineering-technical operations and the negotiations with the investor-companies on the pipeline. Within the cooperation with SOCAR, we'll call for additional investors to finance the construction of the pipeline. At the same time, we negotiate with different banks and international financial organizations for financing the pipeline. Currently, these works on the project are under way and we keep our activity to realize this project.

Heydar Aliyev: I am very pleased of your information. As you know, we have made our efforts for the realization of the Baku-Tbilisi-Ceyhan project for several years. Naturally, together with you. Finally, we have achieved it. Now it is necessary to solve the financial issue and to start the construction. Thus, I approve your plans on it. I want them to be real and implemented into life. The join of other companies to this project is very important. I was informed that you are engaged in it.

David Woodward: Mr. President, the next page of developments in the oil deposits of "Azeri", "Chirag", "Guneshli" are shown here; we have launched the next stage of their development. As you know, we plan to produce maximum oil from those oil deposits by the end of 2004. As you were informed, 40 million tons of oil will be produced there in 2008.

Mr. President, if you look at the next page, you will get acquainted with the conception of the first stage. We have already invited different companies to take part in the tender on construction services.

Heydar Aliyev: Do you mean the "Azeri" oil deposit by the "first stage"?

David Woodward: Quite right. It is situated in the centre of the structure of "Azeri".

Mr. President, for the successful implementation of the first stage, expansion of the terminal and for other expenses USD 2.2 billion will be needed.

Heydar Aliyev: Is the construction of the "Azeri" platform included?

David Woodward: Yes, Mr. President. Saying the average expenses, I mean the expansion of the terminal, equipment for different processes on the platform, living modules, pipelines to export oil and gas onshore. Additionally, USD 1 billion will be spent for drilling 8 wells.

Heydar Aliyev: I ask when you construct pipelines, you are to take into consideration that if you produce more gas than expected, you are to be able to transport it onshore. You should learn from the mistake you committed "Chirag". Try not to repeat it.

David Woodward: Mr. President, I assure you that we have learned from that mistake. Every detail on other platforms has been determined exactly.

The construction of the platform will start in August 2001. According to our calculations, 35-45% of total expenses will be spent on it.

Heydar Aliyev: 35-45% of USD 2.2 billion?

David Woodward: Yes, Mr. President. Let me complete my speech.

Translated from the newspaper "Azerbaycan", November 15, 2000

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