Speech of the Azerbaijan President Heydar Aliyev at the opening ceremony of the eighth international exhibition and conference \"Caspian oil and gas - 2001\" in Sport - exhibition complex in Baku. June 5, 2001

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Dear participants of exhibition and conference!

Dear guests, ladies and gentlemen!

I congratulate you with all my heart on the occasion of opening and the beginning of work of the 8-th International "Caspian oil and gas" exhibition and conference. I wish every success to the work of exhibition and conference.

The international oil and gas exhibition and conference is regularly held for eight years in Azerbaijan. Acquaintance with the exhibition, undoubtedly, provides an exchange of experience among the companies dealing with the oil and gas industry of all world. The discussions, the stated ideas at the conferences are extremely useful for each participant of the exhibition and for each country engaged in the oil and gas industry.

Conducting of the 8-th international Caspian oil and gas exhibition in Azerbaijan is not quite casual. As it is known, Azerbaijan is an ancient oil land. Oil was extracted by industrial method for the first time in the world in Azerbaijan, in Baku. So the oil production in Azerbaijan, in Baku, has laid down the foundations of using these natural resources, which is necessary for humanity all over the world. Azerbaijan has covered a great distance for these years. And in the past a group of great businessmen of the world and the organizations, which later turned into the oil companies carried out activity on oil extraction in Azerbaijan. And I think, it has played its role all over the world.

Initially oil was extracted only on land in Azerbaijan. It is not casual that Azerbaijan is named the "Land of fires". I would not like to specify the origin of this word now. However, in opinion of our historians, flow of gas out of the earth, and it’s burning in Azerbaijan since ancient times, without intervention of a man, have transformed Azerbaijan into land of fires, and historically Azerbaijan was known as the "Land of fires".

Today, once again I can safely say that for the last period the Azerbaijan oil influenced on the development of the industry in the world, creation and development of a petroleum industry in different countries. Therefore, petroleum industry, the oilmen, scientists and engineers specializing in a petroleum industry are always taken pride in Azerbaijan. Because, being engaged in studying of underground riches of Azerbaijan, they promoted consecutive prospecting of new oil deposits and their use.

I see here one of the oldest oilmen, being from Baku, Azerbaijani Nikolay Konstantinovich Baybakov is participating at our conference. Recently all of us have noted the 90-years jubilee celebration of Nikolay Konstantinovich Baybakov. To live ninety years, to make so much in the most difficult sphere, and now, in the beginning of XXI century, not to leave the profession, to come to Baku and be the participant of the oil-and-gas exhibition is not an easy matter.

I welcome you, Nikolay Konstantinovich. I have sent the congratulatory telegram to you on the occasion of your 90-years anniversary. Today, once again, taking this opportunity, I want to congratulate you on the jubilee. I am sure that we will also celebrate your 100-years anniversary together with you.

Nikolay Baybakov has been the minister of oil of such a large state as the USSR for 40 years. Then he has held a post of the deputy chairman in the government. He has done a lot. However, the most important for us is that he is ours, Baku born brought up here and a son of Azerbaijan. He is a graduate of the Azerbaijan Oil Institute. His long and honorable life began in Balakhani, Sabunchu, in Azerbaijan. After that, he has received his world popularity. I think that this minor feature once again shows all participants of conference, and exhibition, what essential role Azerbaijan played in the field of an oil production in the past.

Naturally, I do not want to say that Azerbaijan always extracted oil more than the other countries in the world. No. However, by virtue of the beginning of the oil extraction and oil geology started in Azerbaijan. Therefore Azerbaijan today experiences boundless feeling of pride.

After gaining of the state independence, new pages of a life of Azerbaijan have begun. I don’t want to touch the political aspect of this question. Today citizens of the big countries of the world have gathered here, and it is quite natural that each person wants to live in the free and independent country. Azerbaijan people wanted to live in the free, independent, democratic country too, and 10 years ago, during collapse of Soviet Union, Azerbaijan achieved the state independence. It is historical event for Azerbaijan people and at the same time the beginning of a new stage in the field of oil and gas production in Azerbaijan. We have begun this stage in a hard time. Because while in the past, in structure of the USSR, all oil-and-gas industry was managed from the united center, but now being independent, alongside with other affairs, we should provide both oil and gas production, the richest natural resources of Azerbaijan.

Today I can safely say that the last years Azerbaijan, being part of the USSR, always was in the forefront in this field. It would be pertinent to note one more fact. Azerbaijan was not only the first country extracting oil by industrial way, but also the first country extracting oil from sea depths, from a bottom of the sea. This work began approximately in the 20s. However, it could not develop sufficiently. In 1949 the Azerbaijan geologists and oilmen, constructing oil wells on legendary Oil Rocks, began to extract oil from water depths, from the bottom of the sea for the first time.

Azerbaijan also takes the first place here in the world. All this prove that Azerbaijan has great experience, the great history and traditions in the field of oil and gas. However, naturally, afterwards in various regions of the world large oil deposits, were explored where in comparison with Azerbaijan there have been extracted much oil and gas. New technologies have been created. By using these technologies, naturally, the efficiency of oil and gas production has been increased.

For example, in conversation with me yesterday and also today, the deputy minister of oil industry and energy of Norway, this beautiful woman told that Norway in a petroleum industry is the young country, it is engaged in an oil extraction for 30 years only. It is true. However, they are lucky to have discovered very rich oil deposits Northern sea and the most important is that, using the advanced techniques and technology existing in the world, they have achieved oil and gas extraction in big volume. Now such a small country as Norway has turned into a large oil country.

It is possible to say it about some countries in other regions of the world. Speaking about it, I want to note that now there are regions with very rich oil deposits in the world. The world requires oil and gas in great quantity. Now scientists and experts already such express an opinion that the demands for oil and gas in the world are growing. However, it is likely, that the oil and gas extraction would not meet this growth at a desirable level. All this testifies to the fact that exploration of new oil and gas deposits in any region of the world, their effective utilization are necessary not only for that region, or the country, but for the whole world and humanity.

Perhaps, if my opinion is erroneous, experts can correct it. But I think that for today and for the future, there exist no more valuable and very necessary resources second to oil and gas for humanity, for human life than all underground natural resources taken all together. For example, the iron or other metals now are replaced by the materials made by chemical way. But in fact, these materials are made out of oil and gas produce. If no oil and gas, it will be impossible to receive these materials. The atomic energy was invented. But, probably, it is easy to imagine the good and harm of it. That is why the demand for oil and gas of the world also grows. Thus, exploring and using of the new oil and gas deposits in any region are necessary for humanity, necessary for the future world.

After Azerbaijan gained the state independence, certainly, first of all, we thought about ourselves, economy of the country and about our people. We thought of welfare of our people. And consequently, we have set forth as an object to use our rich natural resources even more effectively, in comparison with the past years. And there was a basis of it. Because there are still undeveloped oil deposits in Azerbaijan sector.

When Azerbaijan got its state independence, we already perfectly knew that the Caspian Sea was the region possessing rich oil and gas resources in the world. It was not any assumption. Scientists, geologists, engineers, oilmen of Azerbaijan alongside with oil extraction for long years at the same time were consistently engaged in revealing of new and new oil deposits in the Caspian Sea. Many of them today are not with us, they have died. And what a happiness that such men, as Nikolay Konstantinovich Baybakov, is with us. But there are already no his alive friends, the colleagues who have worked shoulder to shoulder with him in Baku and have discovered oil deposits in Caspian Sea. As I have always said, today I notify again that we should remember them with feeling of the great gratitude. We should be grateful to them that, using their knowledge and science they have discovered large oil deposits in Caspian Sea.

When gaining the state independence, we witnessed such a panorama. It was only a panorama yet. The panorama is always beautifully seen. However, how to make use of this panorama, how to act is even more difficult matter. And consequently, in 1994 we worked out the oil strategy conception of Azerbaijan, as an independent Azerbaijan state. It was clear that using its opportunities Azerbaijan cannot develop very rich oil and gas deposits and extract oil and gas. So, it was necessary to address to a world experience, to create contacts with the countries, and companies of the world possessing still big opportunities, means, modern techniques and technology. And we did it.

In fact, at that time, it was perceived ambiguously. And some people in Azerbaijan considered, why we should develop the oil deposits together with the foreign companies, for what reason we have to invite them here. Naturally, those were people being far from understanding of the world development. It was not so necessary to reckon with them. We knew about the processes occurring in the world and about the big achievements gained in the world, in the field of oil and gas. And therefore, the invitation of large oil companies to Azerbaijan was inevitable firstly, to invest capital here, inflow of investments, and secondly, to make use of their opportunities, techniques and technology they possessed. It was the main line making a basis of our oil strategy. But already now, after eight years, as I believed eight years ago, it proves to be true: the oil strategy of Azerbaijan has been determined correctly, and it already yields the results.

The first step on this way, was the signing of the contract on joint exploitation of deposits of "Azeri", "Chirag" and a deep-water part of "Guneshli" deposit with a number of the companies of the world in Azerbaijan in September, 1994. We did it. I remember it as today. September 20, 1994 is one of the striking pages in history of Azerbaijan. It has laid the basis for the beginning of practical realization of our oil strategy prepared by us theoretically. We were not mistaken. We were on the right way, and since then we follow the right way.

However, it is known, all these were not so easy to carry out it. At that time, there were many people to make obstacles for us. A number of the states opposed to this, making excuses that sectors of the Caspian Sea or principles of their use were not yet determined. They made sabotage. These sabotages are known. All this led to the act of terrorism in Azerbaijan, to the attempts of the military coup in Azerbaijan. We experienced other terrible events, and pressures that lasted every year. And these pressures exist even today. However, the independent Azerbaijan state neither retreated from the elected course, nor had a doubt to do so. It consistently moved on this course and keeps on going that way.

Together with the foreign companies, - now it is called the International Operational Company, we extracted initial oil from the deposit of "Chirag" in 1997. Extracting this oil, we had already laid a route for the pipeline to export oil in Northern direction. Later till 1999, we laid a new export pipeline in the Western direction, the Baku - Supsa pipeline up to the port of Georgia in Black sea. All this work was conducted jointly. We knew, if we could not export the extracted oil, this oil will have no value. We did accomplish all that.

It has been extracted and exported 14 million tons of oil till this day from the oil deposit of "Chirag". The companies included in this consortium, already now receive profit from this contract, at the same time, Azerbaijan and the State Oil Company receives profit.

Our step has drawn attention to the Caspian Sea. Our step and the achieved results have convinced many oil companies of the world about existing of real opportunities in Azerbaijan, and the offers have consistently started coming to Azerbaijan. We have signed 21 contracts for the last period. We have contracts with 30 oil companies from 14 countries. The total amount of investments is intended beforehand, it will make approximately 60 billion dollars.

Recently we have heard both the report of the Azerbaijan International Operational Company supervised by "BP", and heads of the works carried out on the deposit of "Shahdeniz", they presented of the work done by them.

They informed that the company "BP", being one of the largest companies of the world, had decided to enclose investments here at a rate of 8 billion dollars and added that "BP" had never invested capital at this amount anywhere. These are works carried out and it indicates how much our further work will be successful.

Our second contract concerns the deposit of "Shahdeniz". There the quantity of gas discovered considerably exceeds our expectations. I remember well, it was on June 4-5, 1996. When we held this exhibition, we signed the contract on oil-and-gas deposit of "Shahdeniz" on the second day. At that time there were many to put obstacles in it. Some people among us, not desiring the development of economy of Azerbaijan, lay obstacles to this. However, our oilmen, geologists and experts of "BP" and other companies, who carried out a definite job already together with us in this field, have determined that it was possible to begin work there.

I think there is no need to mention this fact that, the experienced oil companies know well where it is possible to invest capital. If they have the slightest doubt of expediency for an investment, they will never do it. Both they and we adhered to common opinion. However, at that time both we and they, that is "BP" and other companies, could not imagine that there were gas in a volume more than we had intended.

I remember, when I repeatedly asked our very skilled geologist Khoshbaht Yusifzade - he is now somewhere here, how much gas was on "Shahdeniz"? He answered: about 400 billion cubic meter. I asked: may be it is more? He said: no, cannot be more, but such quantity is possible. However, the work done and the wells drilled have proved now that there was more than one trillion cubic meter of gas there. It is not final figure yet. Because the companies, which are carrying out this work, usually speak with care. They always try to declare the figure a little bit lower than the forecasts, so that subsequently they would not be blamed for supposedly, why you extract less now, than you had promised. There is no difference for us. May God let one trillion be there. But there are no doubts for one trillion. I think that there will be even more than trillion.

And there are some other deposits. For example, now the company "Chevron" carries out a big work on the deposit of "Absheron". Heads of "Chevron" promised that they would present me the results, surpassing the results of "Shahdeniz" deposit. And I say that I will be waiting for your official report.

Thus, extremely big opportunities have been defined for a short time in the Azerbaijan sector of the Caspian Sea. I think that one of the main merits of Azerbaijan, and also exhibition of the "Caspian oil and gas" exhibition held for the eighth time is that we have shown the presence of plenty of oil and gas deposits not only in the Azerbaijan sector, but also in sectors belonging to all other Caspian littoral countries.

It is necessary to speak openly, at first, many people did not know it. However, the work carried out in Azerbaijan and the achieved results inspired them and they also got down on business. The foreign companies arrived, begun to cooperate with these countries. For example, now in the Kazakhstan sector of the Caspian Sea such a large deposit as "Kashaqan" was discovered. I am very glad for this. So, due to the ideas stated earlier by our scientists about huge oil and gas fields in our Caspian Sea, and then the opinions of the Azerbaijan state and the measures taken by it, the Caspian Sea has been recognized as one of the largest oil regions in the world.

It is true that, now various forces in some countries publish different articles with the purpose to do harm to Azerbaijan or, as a whole, to other near-Caspian countries claiming that the previous forecasts did not justify themselves or expected prognosis did not turn out or still something like that. Let them wail, shout, it makes no difference for us. We know what turned out, what did not turn out. It is natural, it is possible that not everything will turn out. For example, it is possible to drill a well in a place and no oil will be found there. However, if to drill little a bit further from it, there will be oil. The most important is that these regions, that is, these parts, have to be correctly determined. If there is no oil on the one part, it is possible to find it on another one. And these have been very correctly defined by the oilmen and scientists of Azerbaijan.

Thus, as I noted earlier, this eighth exhibition is not accidental at all. Because, first of all, the Caspian pool is already known as a region possessing large oil and gas deposits in the world. Secondly, the beginning of this work was founded by Azerbaijan, and it is not casual that this exhibition began in Azerbaijan and is being held already for the eighth time and will be conducted henceforth as well.

The second aspect of the question is export of extracted oil and gas. I informed you that we had created opportunities for export of initial oil in due time: an oil pipeline Baku - Supsa and Baku-Novorossiysk. However, they are intended for initial oil. They are not capable to pass a plenty of oil only. Therefore, while signing this contract in 1994, we had recorded in it the necessity of an oil pipeline construction named Baku - Ceyhan, and now we name it Baku - Tbilisi - Ceyhan.

Since that time till today, we have carried out extremely big work for creation of Baku - Tbilisi - Ceyhan oil pipeline. If, on the one hand, there were forces which wanted to prevent realization of oil strategy of Azerbaijan, on the other hand, there were even a great many people trying to put obstacles in the construction of Baku - Tbilisi - Ceyhan oil pipeline. Because, if there is an oil in Azerbaijan, we extract it. There were those who prevented this. However, these obstacles would not yield any result. We extracted this oil and gas. But the value of extracted oil and gas is not only that you have extracted it, it is necessary to have an opportunity to export it. Those who prevented us did not want, for example, oil to be exported by this route, and wanted it to be transported by another route. However, from the very onset our decision was that the export pipeline should have been Baku - Tbilisi - Ceyhan. We had made this decision. This decision was accepted by Turkey. This decision was accepted by Georgia. With feeling of satisfaction I want to say that the large oil companies working in Azerbaijan and the countries to which they belong - the United States of America, the Great Britain, France, other countries, the European countries, - have supported the realization of this route. If there was no their support, as I told you, it would be difficult for us to realize this project. To tell the truth, it would be implemented, but it would have been very difficult.

Baku - Tbilisi - Ceyhan has passed the big tests. At last, we signed the final document in 1999 in Istanbul. After that, large engineering and financial works were carried out. Now there have already started practical work, and under forecasts, according to the prepared plan, I am confident that the Azerbaijan oil, the Caspian oil extracted by us jointly, passing through Georgia, Turkey, will reach the port of Ceyhan in the Mediterranean Sea in 2004.

I think that there should be no problem here any more. As both Turkey and Georgia adhere to a resolute position and consider that the project of Baku - Tbilisi - Ceyhan should be realized in due time.

You see, the life is full of new and new events. Starting to work on deposit "Shadeniz", we knew that there was more gas than oil. But we did not know that it was in such quantity. Already there is a question on export of gas before us. Now we also know it. Turkey feels very great need for gas, Europe requires gas very much. Gas is necessary for Georgia as well. And consequently, we have made the decision on the necessity in parallell to the Baku - Tbilisi - Ceyhan oil pipeline, to construct a gas pipeline from Baku up to the border of Turkey. And we have started this work. Here respected minister noted that when I was in Turkey, in Ankara on official visit in March, we signed an agreement between the states of Azerbaijan and Turkey on the sale and export of 6 billion cubic meter of gas to Turkey, which would be extracted at the first stage from deposit of "Shadeniz". Now this agreement should be signed with Georgia too. I hope it will be realized in the near future, as it is necessary to start to work. We promised that gas from deposit of "Shahdeniz" would be transported to Turkey in 2002. Therefore, there is no time to waste. Signing of agreements, the settlement of other problems should be provided shortly to start construction work.

These are the first achievements we gained. But look, what great hopes they give us. Look, what wide perspectives they offer. It is not only meant for Azerbaijan, not only for all the littoral Caspian countries, but also for the entire world.

Here we heard a letter of congratulation by the President of the United States of America Mister George Bush with the great pleasure.

We heard a letter of congratulation by the prime minister of the Great Britain Mister Toni Blair. They show great interest in this work, give great value to it, and render great support. It is already a fact. I know well about the support given to us until now, - not only by them, but also by the deputy minister of France, here he delivered a speech, - I know well the attitude of all countries cooperating with us in this work, I know it very well.

There is a share of Iran on the deposit of "Shahdeniz". It will receive the profit. The ambassador of Iran is participating here. And consequently, he should try this gas pipeline be constructed shortly in order to receive the profit. Iran possesses a share in other contracts too.

I repeat that here, not only material interests of Azerbaijan, but also strategic interests of all the region are solved; the big guarantee for security in the region is established, and also the basis of provision of needs of some countries of the world, the western countries both for oil, and gas growing from year to year is ensured.

Realization of this program now, in the beginning of XXI century, since 2001, approximately within 10-15-20 years, naturally, will promote the creation of very big innovations. All these are designed for the countries, peoples participating in all these contracts and in this work. And therefore, today once again we show how far the state oil strategy of Azerbaijan is exact and right.

We declare, that henceforth we will consecutively - naturally, each stage has characteristic requirements - carry out the work according to these requirements. Our contacts with the companies and cooperation with countries will become even closer, wider and better. Naturally, each country prefers its commercial interests. We are of the same opinion. However, it is not only commercial interests.

If commercial contacts among the countries take the big place, political, humanitarian and other links among these countries should also correspond to it. They cannot be in the contradiction with each other, never! We adhere to this opinion, and I think that today here all the words said by the visitors and the read congratulations evidently testify to it.

The exhibition extends more and more every year. 150 companies took part in the first exhibition from 12 countries. Now it is already about 340 companies from 25 countries. There are so many of them you see! When I came here, respected madam who has organized this exhibition told me that one third of companies representing at the exhibition, participates in it for the first time. Not only the oil companies work in Azerbaijan. There are a lot of other companies. For instance, I want to remind of Norway. Norway has the company "Statoil". This company does here much work. However, together with it, a number of other companies of Norway carries out here a lot of very important activities, for example the company "Kverner" and other companies. The respectful madam mentioned their names here. A number of the American companies, the companies of the Great Britain work here as well. They are not directly connected with oil companies. However, to carry out the extraction of oil, certain technical work and so much other subsidiary works are to be done. There are specialized companies which deal with each of them.

Thus, now here, in Azerbaijan, a plenty of companies unprecedented in history from many countries of the world and citizens of these countries work together with us. And it expands and strengthens both our economic, humanitarian, and political relations. This brings us together, provides an exchange of experience and brings even people closer to each other. Because, XXI century should become a century, where people will live in conditions of the peace and prosperity. In XXI century people should establish sincere attitudes with each other. In XXI century people should not subject discrimination any nation, any countries belonging to other religion. Because this is the demand of a civilization. Each country, each organization, each citizen should make his contribution.

I thank to the organizers of this exhibition. I congratulate the companies participating at the exhibition that they have gained the right to demonstrate their work here. I wish the exhibition and the conference which will be held after the exhibition, every new successes. Thank you.

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