Speech by Heydar Aliyev, President of Azerbaijan Republic at the solemn ceremony on the occasion of laying down of the main export pipeline Baku-Tbilisi-Ceyhan at Sangachal seashore terminal. September 18, 2002

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Your Excellency Ahmad Nejdet Sezer, President of the Republic of Turkey!

Your Excellency Edward Shevarnadze, President of the Republic of Georgia!

Dear Mr. Spenser Abraham, Secretary of Energy of the United States of America!

Dear ladies and gentlemen, guests!

I cordially welcome all of you in Azerbaijan and thank all gathered here on the occasion of realization of a project, having a vital importance.

The ceremony of laying foundation conducted today for launching of construction of the Baku-Tbilisi-Ceyhan main export pipeline, that has gathered all of us here, including those, arrived to Azerbaijan from other countries in order to participate and share our joy is this solemn event. This large project is well-known all over the world already and the world community has been discussing this project for a long time.

The project was founded in 1994, in the beginning of launching of oil strategy of Azerbaijan by signing of a contract between State Oil Company of Azerbaijan Republic and 11 largest oil companies of the world on September 20, 1994 on joint exploration of "Azeri", "Chyrag" and "Guneshli" oilfields, located in Azerbaijan, Baku, at the Azerbaijan sector of the Caspian Sea. This contract has caused a widespread echo all over the world and it is not occasional that it was named the "Contact of the century". While signing the contract, we, of course, were planning to extract in the oilfields of "Azeri", "Chyrag", "Gunashli" more than 50 million tons of oil in the future. But the extracted oil has to be delivered to the world markets. For this purpose, there were different ways, different routes. However we, Azerbaijan together with our friends - Republic of Turkey, Georgia, and of course, companies, taking part at this project, have decided to deliver the extracted oil in the future to the Turkish port Ceyhan at Mediterranean Sea via Baku-Tbilisi-Ceyhan pipeline.

This decision has caused many debates. Because there were many people at that time opposing the contract signed by us and malcontent with laying of the pipeline on the Baku-Tbilisi-Ceyhan route. This is commonplace. We, first of all Azerbaijan, were hampered. Because we are owners of the oil and first of all, we had the right to decide which route should be chosen for oil exportation. We were put upon huge pressure. The social and political situation in Azerbaijan was not stable sufficiently at that time. A civil war unleashed here in 1993. We have prevented all of this and signed the contact. However even at that time, there were high-ranking officials among us, serving for different bodies of foreign services, who have expressed their viewpoint about violation of this contract.

It must be interesting for you. Because we signed the contract on September 20, 1994 and after 4 days an escape of 4 serious offenders from the jail of the Ministry of National Security was organized. A week later, a terror act against vice-speaker of the parliament of Azerbaijan Republic was organized, he was killed. A colonel, chief of the department of counterespionage was killed too. Unleashing this terror, they wanted to intimidate us. But we didn`t fear.

However they continued to their activities. Such a person as Surat Huseynov, who was holding the office of prime-minister and working with me at that time by necessity, began an attempt for a coup d`état in Azerbaijan on October 4 using armed force. We prevented it. We could achieve it first of all thanks to the support and assistance of our nation. In March 1995, another attempt for a military coup d`etat was undertaken, and it was prevented. After this they attempted to organize terror acts in some places, to detonate a bridge, and undertake a sabotage. We have had casualties, but we managed to prevent all those actions.

I know, that it was just the period when the Baku-Tbilisi-Ceyhan project was put forward, a terror act was committed against my friend Edward Shevarnadze, the President of Georgia, and he survived by a miracle.

All the political pressure and other impacts were stipulated firstly by the fact, that they didn`t want to accept our oil contract, we have proceeded to this business in Caspian Sea for the first time. And secondly, they were against laying down of the Baku-Tbilisi-Ceyhan pipeline. We proceeded to this business in such conditions, we exerted our will and didn`t turn off the way we had already chosen.

The first oil was extracted from the "Chyrag" oilfield in 1999. Initially, we were transporting it via Baku-Novorossiysk pipeline through the russian port of Novorossiysk at Black Sea. Simultaneously, we were constructing Baku-Supsa pipeline towards western route and we put it into operation in a very short period. The oil, produced from then on and so far, is transported by this pipeline - towards western route.

But all this have been done for transportation of the early oil. But for transportation of the envisaged by us main oil flow, I reiterate, we were in need of Baku-Tbilisi-Ceyhan. We were working successively, doing our best for this project and making use of all of our potentials. Turkey, Georgia and Azerbaijan were together, performing joint actions and dealing with this issue cooperatively. But without aid of the government of the United States rendered to us, Azerbaijan, and the permanent support in this domain and recommendations we, of course, we wouldn`t be able to achieve this.

It is not by chance that we together with Turkey, Georgia, and Kazakhstan have signed of an agreement on the OSCE summit meeting held in Istanbul in November 1999, for beginning of the construction of Baku-Tbilisi-Ceyhan main export pipeline. Moreover, we have signed a statement that was joined and signed by Mr.Bill Clinton, the President of the United States of America, on behalf of this government. And this promoted the realization of the construction of Baku-Tbilisi-Ceyhan pipeline.

I have to tell you this brief history. Because you should know what work we have done in the course of the last 8 years and which difficulties we faced to, which resistance, obstacles we came over.

Finally, there are a few months, that some processes, related to the construction of Baku-Tbilisi-Ceyhan pipeline are at development. There were problems related to its financing. But we have solved it as well. At present this work is led by Azerbaijan International Operation Company and BP company. They have elaborated all plans already. Therefore they have invited us here to laying of foundation.

I would like to inform you, that those, opposing the Baku-Tbilisi-Ceyhan pipeline, often alleged, that this was an illusion, something incredible, there was not and won`t be sufficient volume of oil in Azerbaijan. There were a lot of such talks. Much time have passed, some people believed these talks too. But they appeared to be groundless and we accomplished our duty.

A conference entitled "Legend of three seas" was held recently in Istanbul. There took place a talk about this legend was told about there. I have delivered a speech there, saying that: "You are talking about legend here. I would like to say you, that it is neither an illusion, nor a legend, the three seas - Caspian, Black and Mediterranean wil be inter-connected." They were interconnected by Turkey, Georgia and Azerbaijan, their joint project and permanent support of the United States of America granted to them in this issue. Therefore the illusions were left behind and we approached the reality.

You will know what investment will be put in here and what type of work is to be done. I do not want to speak about it. I would like to note, that all of these projects aimed at the development of Azerbaijan economy. Today a document on the second phase of the "Azeri", "Chirag" and "Gunashli" oilfields exploration will be signed here. It means that enormous investments will already be engaged and intensive work will be conducted here.

As we consider, the Baku-Tbilisi-Ceyhan main export pipeline will be completely put into operation by 2005, then we will go together to the Turkish port of Ceyhan and witnesses how the Azerbaijani oil, the Caspian oil is shipped from port of Ceyhan.

As I have mentioned earlier, there were some problems related to the financing of Baku-Tbilisi-Ceyhan pipeline. Azerbaijan has contributed its position to this issue, we undertook 25% of its financing. The remaining sum is distributed among other companies. But it is interesting, that "ENI" company has joined this project assuming 2,5% share. "Total" company joined the next. Today I was informed, that a Japanese "Itochu" company joined us with a 2,5% share, and yesterday another Japanese company - "Implex" joined this project assuming a 2,5% share. What does it mean? It means that not only Azerbaijan, but also the others want to make use of this pipeline.

When we were signing the agreement in Istanbul, Nursultan Nazarbayev, the President of Kazakhstan has also put his signature on this document, saying that Kazakhstan will use this pipeline as well. I know, that actually foreign companies are doing a great job in Kazakhstan. Their joining to our Baku-Tbilisi-Ceyhan project and putting investment prove that oil extracted from the other sectors of Capsian Sea will be exported via Baku-Tbilisi-Ceyhan too.

But I am telling you, that approximately in 2007-2008, some 50 million tons of oil will be extracted from the "Azeri", "Chyrag" and "Gunashli" oilfields. But we have some other oilfields in Caspian Sea. We cooperate with many companies. We have signed 21 contracts with companies from 30 countries, we continue our work. They will also be engaged in the oil extraction and we carry out a joint work with them. Therefore, I suppose that even the actual capacity of Baku-Tbilisi-Ceyhan will not be sufficient, we will have to either upgrade it, or construct the second pipeline.

All I speak about concerns the future and this is the work necessary for the future of our nation. Our work became possible only after achievement of the independence by Azerbaijan. As you may know, Azerbaijan is an old oil producing country. 150 years ago industrial oil exploration commenced in Azerbaijan. But the oil has never pertained to Azerbaijani nation. All oil and gas fields in Caspian Sea were discovered by Azerbaijan geologists and scientists, but we have never been the owners of these fields. Now we are an independent state. And, being an independent state, we are owners of our wealth. We establish relationships with countries necessary for us and we do our work. But the second pipeline is on the waiting list. A Baku-Tbisi-Arzurum gas-main from "Shahdaniz" gas field, the reserves of which count about 1 trillion cubic meter of gas, is to be laid.

Thus the number of pipelines increases. All of them, of course, are of considerable economic importance. But the work that we do now (Baku-Tbilisi-Ceyhan) has not only economic, but also political importance. This project and its implementation could be a guarantee of peace, order and security in Caucasian region. This pipeline, these steel pipes will unite Turkey, Georgia and Azerbaijan more closely.

We are friendly countries. Turkey is a friendly and fraternal country to us. Georgia is a friendly, fraternal country to us as well. We are also friendly, fraternal country to them. We maintain tight relationships. But we fasten these relationships, as the saying goes, with more solid ties. Baku-Tbilisi-Ceyhan pipeline will become one of these ties. I`m sure the United States of America will support us in these issues further. Therefore in this ceremony I would like to express my gratitude to the Republic of Turkey, to its President esteemed Ahmed Nejdet Sezer. I express my gratitude to Georgia, its President esteemed Edward Shevarnadze. I am thankful to the United States of America, their president mr. George Bush.

I have recently received a very warm message from mr. George Bush, appreciating the activity of Azerbaijan in the anti-terror coalition. Just after the shocking terror acts that took place on September 11 last year, we have joined the anti-terror coalition, we accomplish and will continue our duties further within anti-terror coalition. Hence, we develop Azerbaijan- US relationships and we raise them in this sphere up to a higher level.

Yesterday, during our discussions with esteemed minister, he conveyed cordial greetings and best regards of President Bush. I would like to express my gratitude to the United States of America, American nation and President Bush for all they have done and for a support they rendered for realization of Baku-Tbilisi-Ceyhan pipeline.

Dear friends!

Dear guests!

I welcome you once again cordially here and wish you sound health. Baku-Tbilisi-Ceyhan will certainly move ahead!