Speech of Azerbaijan President Heydar Aliyev at the solemn ceremony dedicated to the 90th anniversary of the beginning of commercial exploration of Surakhany oil field - 26 August 1994

Dear oilmen, sisters, brothers!

Dear inhabitants of Surakhany!

I congratulate all of you, all Surakhany inhabitants and all oilmen of Azerbaijan on the occasion of 90th anniversary of commercial exploration of Surakhany oil field. I wish successes in the future work and happiness in the life of Azerbaijani oilmen.

90 years ago here, in this sacred land of Azerbaijan - Surakhany which was named the country of Fires and fires of which considered to be sacred, were worshipped in the course of many centuries, the first oil was struck. Starting from that day to nowadays the oil fields are being explored in a commercial way. Exploration of oil fields of Surakhany in the course of 90 years gave a lot of benefits to our people, our Republic and independent Azerbaijani state. Surakhany oil fields have a great share and played a great role in the development of Azerbaijani industry, all spheres of economy and social life. In this holiday I my gratitude, respect and love to all generations of Surakhany oilmen and oilmen, extracting the oil at Surakhany land nowadays.

Azerbaijan is a country of oil. The oil of Azerbaijan - Baku and Absheron brought to our republic a great fame, made it known all over the world and made our nation renown. In this historical chronicles Surakhany oilmen take a special place. The speakers appeared before me today have spoken already about works carried out here in the period of exploration of oilfields in the course of 90 years, especially the role and place of Surakhany in the development of oil industry, oil and gas extraction, and petroleum engineering. Indeed, this is a history worth of fame. Indeed, the oilmen of Surakhany and all inhabitants of Surakhany take a special place in the history of Azerbaijan.

As I have mentioned earlier, the oil industry played a great role in the life of Azerbaijan and it is still doing nowadays. Extracting and processing the oil at onshore and offshore oil fields in Baku, as well as other oilfields of our Republic, our oilmen contributed greatly to the development of oil industry of Russia and former Soviet Union. It is well known that at the beginning of the century the oil production existed only in Azerbaijan, which was part of Russia formerly and it supplied not only Russia but also western and eastern countries.

After establishment of Soviet governance and in the period of Azerbaijan`s being in the Soviet Union, the Azerbaijani oilmen played a great role in the development of industry and economy of this great country. Azerbaijani oilmen contributed greatly to the exploring, discovery and extraction of oil in the other places of the Soviet Union. It is not by a chance that Baku is known as oil center of the world in the course of a long historical period and oilfields discovered in the other places of the Soviet Union and Russia were entitled " Second Baku", "Third Baku", "Fourth Baku", etc. Our compatriots - Azerbaijanis and our oilmen are still working in these far places and they make the name of our people known.

45 years ago, by the end of 1949 - on November, the Azerbaijani oilmen commenced to offshore oil production for the first time of Azerbaijani oil history and, one can say it definitely, for the first time of world oil industry, and oil sprang out. From this time the oil production is widely developed at the Caspian sector of Azerbaijan in the 45-years long period and this experience made the Azerbaijani oilmen known all over the world, they implemented their experience while extracting oil not only the seas of the Soviet Union, but also at the seas of other countries. All this are examples of great and heroic history of Azerbaijan`s oil industry and Azerbaijani oilmen. Our people will always be grateful to our oilmen and oil specialists of Azerbaijan for these services.

We have always been proud with work activity, heroism, knowledge, work experience and devoutness of Azerbaijani oilmen and as the President of Azerbaijan I feel proud also with historical past and the present devotedly and heroic work of Azerbaijani oilmen.

Azerbaijani oilmen are working in hard conditions today. As it was in the past, the oil industry in the main sphere of our economy. If there was a very little processing center related to the oil industry at the beginning of the century in Azerbaijan, nowadays our republic has a great industrial potential. The chemical industry developed widely in Azerbaijan on the basis of oil, oil processing and gas and it constitutes a large complex. The oil engineering is well developed also. We have a great, large plants. These plants have been meeting the needs of not only Azerbaijan but also needs of Soviet Union in oil-field equipment as much as 70%.

Other industrial spheres like machine-building, electrical engineering, radio engineering, instrument-making, electronics, metallurgy, etc. are also developed in Azerbaijan. Agricultural production and processing industry, as well as light industry, which have a great potential, are also developed in Azerbaijan. The actual image of industry of Azerbaijan is very extended, its industrial potential is very large, the scholars, engineers and specialists working at the industrial spheres constitute a vast scientific and technical, intellectual potential. We are proud with all this. All this is a great basis for strengthening of Azerbaijan`s independence and eternal independent life of our country. This is our national wealth and it will always be our national wealth.

However, the oil industry have always been occupying a distinguished place in this large industrial potential and it still is occupying such a place. More than 150 years left from the beginning of oil production in a commercial way in Azerbaijan. But there are still great oil resources in Azerbaijan - both in onshore and offshore areas. The future generations of Azerbaijan must ensure the development of oil industry, and oil and gas production industry will always serve to Azerbaijan. I want to note once again that oil industry takes an important place in the safeguard and development of the independence of Azerbaijan and it will take this place in the future.

It is well known that in the course of the last 5-6 years, perhaps even earlier, the development of our industry stopped. In the result of some processes the destructive actions undertaken in the industry and in the economy in general resulted in hard condition of oil and gas production industry. All this is well known and they have a temporary character. I hope that Azerbaijani oilmen, as well as scholars, engineers, technicians and workers of oil industry will undertake all necessary actions for overcoming this situation in this sphere. Of course, we are working very seriously on this issue and in the result of our joint activity the situation will be improved.

As you know, the oil industry of Azerbaijan was a part of USSR`s oil industry formerly. Some of you are aware perhaps and the rest must be aware as well - the onshore oil fields of Azerbaijan were working on state subsidy within All-Union oil industry in the course of the last thirty years. It is to say that many equipment and human resources are needed for onshore oil production and the benefit from the extracted oil did not cover the expenses. The same situation persists. In contrary, the offshore oil production was profitable. However, we were a part of a great state in that period. The oil industry was supplied with both equipment and other required stuff. Therefore, this hardness was not felt. The oilmen were working well as always, they were remunerated well not depending on the volume of the oil production.

As you know, there is a subsurface pumps producing plant. This enterprise was established long before. Perhaps you remember that much financial funds were allocated for reconstruction and expansion of this enterprises in 1970s. All other oil engineering plants in other districts of Baku were reconstructed almost completely. All these works in that period were carried out at the expenses of funds allocated from the Union`s budget.

Or, let us take the oil refinery plants. You know, but let me remind you once again that equipment installed at the beginning of the century were used in oil refinery plants of Baku. The outmoded facilities were causing the great losses and reducing the quality of the production, at the same time complicating the work of specialists and workers of these plants. At that period we succeeded to obtain many funds from Union`s budget and we reconstructed the oil refineries. The outmoded facilities were removed, the ELOU-AVT-6 installations with annual 8 million tons capacity were installed. For production of high-quality production some 40 million US dollars worth reforming installation was bought from a foreign country.

The big platforms - "Shelf-1", "Shelf-2" and "Shelf-3" - were bought for extraction of oil from deep-sea zones. Finally, the Deep-Water Jackets Factory was constructed. I made many efforts for construction of this plant in Azerbaijan in that period. 400 million US dollars worth fund was allocated from the Union`s budget for the construction of this factory. Actually, this factory needs to be renovated. However, now it is an enterprise of independent Azerbaijan and it is a main industrial project able to construct platform for oil extraction not only territorial waters of not only Azerbaijan but also at the Caspian sectors of other states. Reminding you all this I want to say that although the extracted oil was used on Union`s scale, the funds needed for oil industry was allocated from Union`s budget without any problem.

Unfortunately, the investment was reduced in the last 5-6 years, the main funds are outdated, the funds for necessary repair were not available. This caused great difficulties in oil industry.

Actually, Azerbaijan is an independent state. Thus, we should never regret and recall with bitterness that formerly we obtained all aforementioned but now we do not have this opportunity. Our independence and national freedom is the utmost value for us. As an independent state, Azerbaijan is the master of its destiny as well as that of surface and subsurface resources. Oil and gas fields are the great wealth of Azerbaijani people and they will serve it nowadays and in the course of long years henceforth.

The present transition period must not frighten anybody. The difficulties we are facing in the period when we gained an independence and develop our independent state are natural and we must tolerate them. We will overcome these difficulties, the overall economic potential, especially that existing in the oil industry of Azerbaijan will show itself and it will serve for improving of living standards of Azerbaijani people.

Thus, the social-economic difficulties in Azerbaijan, including those the oilmen are facing with, must be comprehended and tolerated. I can assure you that these difficulties are temporary and Azerbaijani people and oilmen will achieve the good living standards.

You should know also that Azerbaijan is in war now. The war was not commenced by Azerbaijan. Armenia undertook aggression against territories, sovereignty and territorial integrity of Azerbaijan. Hence, Azerbaijan got involved in a war. Unfortunately, during the war lasting as long as six years, because of some objective and subjective reasons a part of our territories was occupied by Armenian armed forces, more than one million of our compatriots are in the condition of refugees. Of course, it is a great blow delivered to the social-economic situation of Azerbaijan. Therefore, sometimes we are not able to carry out many works in our industry in due time, and a part of the benefit gained in the industrial production is used not for development but for organization of defense of our republic. This is natural. We must defend the independence of Azerbaijan and our territories and safeguard the territorial integrity of our republic. Therefore, we must tolerate the difficulties of war time.

All representatives of Azerbaijani people, including oilmen take an active part in the war. There are many martyrs amongst oilmen and some of them were awarded with the honorable title of National Hero of Azerbaijan. The oilmen are in first lines both in battle-front and rear. I want to pay homage to all martyrs, including oilmen fallen during defense of Azerbaijani territories. The heroism of martyrs will always live in our hearts.

The Azerbaijani oilmen take an active part in the defense of our territories. The battle machines of National Army work with the fuel processed from oil extracted by you. Of course, the war created a lot of difficulties. The speakers appeared here noted that during the war in 1941-1945s both the Azerbaijani people and our oilmen were working day and night for safeguarding the defense of Motherland. The oilmen of Azerbaijan played a distinguished role in the victory over fascism. At that period the 70% of overall oil production in Soviet Union was provided by Baku, Azerbaijani oilmen. Perhaps the veteran oilmen remember in how hard conditions the oilmen were working and extracting the oil. When the fascist army could come till North Caucasus and the railway connections were shut down, the Azerbaijani oilmen together with Caspian seamen shipped the oil to North through Caspian Sea for provision of front with fuel. The situation of that period was much more difficult than now, the people were living in half-starving conditions, the ordinary needs were not covered. However, the oil wells were not stopped, the oilmen were working. The oilmen undergone an ordeal at that period. This period is a period of great heroism in the history of Azerbaijani oilmen.

Actually we are defending our Motherland, independent Azerbaijan. The war for defense of our territories is much more sacred for us. Thus, every worthy citizen of Azerbaijan must contribute to the war, the defense of our Motherland and liberation of our occupied territories. Those fighting on fronts must be in guard of the territories of Azerbaijan and those working in rear must produce oil, gas and other products for enabling Azerbaijan to live and its army to defend our country.

The difficulties appeared in economic and social life of Azerbaijan, including difficulties in the life of oilmen are related with all these factors. I would like you to take it into account and work better so that we could free our territories and safeguard the territorial integrity of independent Azerbaijan, as well as succeed in development of our economy. We have possibilities for that, our potential is large and we must use it.

We must tolerate all these difficulties. The difficulties existing in oil industry are well known. Delays in salary payment, reduce of investment, lack of repair works in some spheres persist. I am dealing with these problems personally and I will do it in future. I have given appropriate orders and benefits of oil industry will not be taxed for a while in order to improve the financial situation of this sphere. Some measures in financial sphere are being taken and they be taken further, material aid is being rendered. However, you must know that these difficulties are common and we must tolerate all of them. I am tolerating them together with you and I take necessary steps for overcoming them.

It was not by chance that I recalled the war in 1941-1945s. People lived in this period and undergone those difficulties know how difficult was that period. However, our people went through that period and living standards improved after that period. We will overcome these difficulties this time also.

As you know I have been living in Nakhchivan in the course of the last three years before coming to Baku. Nakhchivan, surrounded by Armenian territory is separated from other territories of Azerbaijan. The autonomous republic is living in the conditions of blockade in the course of the last 3-4 years. The power supply lines, gas lines and railway connection are disrupted since they pass through Armenian territory. This situation persists now. Thus, a little territory undergoes a hard period for a long time.

Nakhchivan has a very severe climate, there are hard frosts in winter time. I lived the severe winter days together with people there. Sometimes there was not electricity during many months and we were working by the oil lamp. The houses were not heated since there was not fuel. The trees were cut and used as fuel for children not frozen. In such hard conditions I was together with people and I said them repeatedly: we will live, struggle and live through this situation together. If frozen and died, we would be together. But how hard it would be, we tolerate and live through. And we did it. And I say you today, as the Azerbaijani President I say it to oilmen and people that the reasons of these difficulties are well-known and appropriate measures are being taken. As a president I am together with you and I rely on you. I want to assure you that I take all possible measures for elimination of these difficulties and I will do my best in future for this purpose. I tolerated every difficulty with you and I would do it in the future, we will live and eliminate these difficulties together, we will safeguard the development of the Republic of Azerbaijan together.

We are holding negotiations with foreign oil companies for the development of oil industry. You know that these negotiations launched since 1990. In the past period there were different stages in the process of negotiations and some projects were elaborated. As you know, Azerbaijan was in a difficult situation in June, 1993. The civil war commenced and brother blood was shed. People together with Azerbaijani authorities invited me to Baku repeatedly. Frankly speaking, I was not willing to come at that period, there were some reasons for that. However, when I see Azerbaijan in such a difficult situation, when the civil war commenced, Azerbaijan was being dividing and could be divided completely I could not be indifferent and having accepted these invitations I came to Baku. I am in the head of Azerbaijan by the consent of people since that time. It is well known that I have been formerly in the head of Azerbaijan during 14 years. There is nothing to make me ashamed before Azerbaijan, my services are evident. The trouble that my people got in made me to come to power again. My only purpose is to make my people go out this situation. I am ready to sacrifice my life for this purpose. Till my last breath I will do my best for making Azerbaijan go out this situation.

I said you earlier that after coming to Baku together with other issues I got familiarized with negotiations held with western oil companies. We found out that the projects offered, harm the interests of Azerbaijan to a certain extent. Therefore I stopped negotiations. I can say you that it required a great courage as well. The western companies have been working in Azerbaijan during 3 years. Negotiations were held, projects were elaborated. When I stopped negotiations I heard some objections of certain authorities. But I answered them: the oil fields of Azerbaijan are the most valuable wealth of our people and we must use them carefully today and in the future. We must know that our wealth is important not only for present generation but for our descendants, future generations. Thus, no superficial approach can be accepted in this regard.

Therefore, taking on all responsibility I ceased negotiations and signing of the contracts. I engaged all scholars, engineers, in general, all specialists working in the sphere of oil industry and asked them to measure everything and decide under which conditions can we sign the oil contracts. Such conditions must be established that will not harm the interests of Azerbaijan both now and after 10, 20, 30 or 40 years. if a contract on joint development of an oil field is signed with a foreign company, of course, both parties should derive benefit from it. No foreign company will come here without it. Although Russia is a great country, it signed contracts with foreign companies on joint development of oil fields.

Which will be the conditions of contracts that we are going to sign, in other words, what be the share of Azerbaijan and that of foreign companies? Azerbaijan is owner of this wealth, therefore, it should safeguard the maximum advantage in this contract. I gave an order to our scholars and specialists to work on this principle. Of course, we delayed this issue a little. Perhaps it will take even more time, however such a decision must be taken that will guarantee the national interests of Azerbaijan both in present and in future. A contract that will be beneficial during 5-6 years could be signed, however what about after ten, fifteen or twenty years? One must think about it. I have never worked thinking about present day only. Even in 1970s while doing these works I have been thinking of this day.

For example, let us take the planting of trees and gardens in Baku. At that time I offered such an initiative: every inhabitant of Baku must plant and grow two trees. Of you remember, public works used to be organized at the territory of Surakhany district at that period. Trees were planted, greenery was watered. I used to come also. How big these trees became! This is our wealth. Now, I am informed that the trees are being cut and houses and other buildings are constructed in different places of Baku. Fell of trees in Baku, in the conditions of Absheron is a crime. As you know, the trees in Baku could barely be counted on fingers at the beginning of the century. Greenery was created in Baku in the result of great efforts. If someone is obliged to fell a tree he must plant ten ones.

This is only an example, I can say you about many others. I would like to say that I have been thinking about this day at that period. Actually, I think about future too.

Thus, being guided by these principles I have arranged the in-depth analysis of oil contracts and negotiations are underway now. If by the end of the negotiations our representatives submit a project acceptable for us we will hand it in for the discussion of oilmen and after thorough discussion we will give our consent for the realization of this project.

We must far and away use the capacity of foreign oil companies having powerful high technologies for onshore and offshore oil development. We have any other choice. I reiterate that if we achieve a contract safeguarding the interests of Azerbaijan the oil industry would vastly develop, the standard of well-being of oilmen would be improved and the industrial potential of Azerbaijan would increase in general. In other words, it will influence the overall economy of Azerbaijan very positively. Therefore we deal with these issues and seizing the opportunity I inform you about.

As you know, the main part of offshore oil is being extracted from "Gunashli" oil field. However, the production of oil is reduced there. Another example, when I left Azerbaijan in 1982 some 15 million tons of oil and 15 billion cubic meters of gas have been extracting annually in Azerbaijan. Actually, only 6 billion cubic meters of gas is being extracted annually. We can not cover our need in gas by ourselves and we buy natural gas from Turkmenistan. We should pay in foreign currency for this. Where we can take it? We have many possibilities in the sphere of oil production. However, the volume of annual oil production is 10 million tons, this year it will be even less. How can we supply our industry and gain the foreign currency in this situation? Therefore, we must work together with foreign companies. However, we should act in such a way that the use of our main wealth would be in conformity with the present and future national interests of our country. I would like to assure you and you can be confident that no error will be made in this issue. If we succeed in realization of these contracts the new era of the development of Azerbaijan`s oil industry will begin. I am confident in this.

I think that works in this and other spheres will gave results shortly. However, in conclusion I would like to say again that we are aware of difficulties persisting in oil industry, I am undertaking measures and I will do it in future also. I ask our oilmen to be tolerant and work more devotedly.

Today is the date of birth of Prophet Muhammad. I was in Tazapir mosque on 12 o`clock and I delivered a speech there on the occasion of this holiday. Now I came here with you to the holiday of oilmen. I said it there and I say it once again here before you, since you and all oilmen of Azerbaijan in your person have always been playing an important role in the life of Azerbaijan and you will play in future too, that our main objective is helping Azerbaijan to go through the war. For this purpose we must strengthen our army and defense power.

We do it, you must now about it. At the same time we are carrying out negotiations. The international organizations dealing with the war between Armenia and Azerbaijan as long as six years highly appreciate the peace negotiations. Every war must have the end. The end of the war is the peace. However, the peace must be fare. For us the peace means restoration of territorial integrity of Azerbaijan, withdrawal of Armenian armed units from occupied territories and sovereignty and inviolability of borders of our Republics must be ensured. We are holding peace negotiations on these conditions.

It is 3 and half months that we achieved the cease-fire. I would like to say that there have never been such a long time cease-fire during 6 years long war period. Both Armenian party and us respect the signed agreement. On our behalf I declare that we will respect the cease-fire. I demand the same thing from the other party.

The peace negotiations are being held through the mediation of the UN Security Council, the CSCE and its Minsk Group. The big countries, especially Russia carry out a great intermediary activity in this issues. At the same time the United State of America carry out the intermediary mission. Some 50 countries are members of the CSCE. Nine member countries of this organization are represented in Minsk group. These countries do their best for ending of war and establishment of peace in our region.

I devote the main part of my time to the issues related with peace negotiations. The head of Minsk group was in Baku the day before yesterday. I talked to him during 4 hours. After this he left for Armenia and today he arrived to Baku. I am going to meet him today also. We will continue our negotiations in this sphere. If the Armenian party accept our conditions and the international organizations can provide the realization of these conditions, we will adhere the way of peace.

At the same time we are strengthening our defense forces and we must be always ready to defend our territories. Therefore, the service in army and rendering of help to our army is an honorable mission of every citizen, including oilmen. I would wish that you do your best in order to fulfill this honorable duty.

In the period when Azerbaijan experiences the war period on one hand and on the other hand the economic situation is heavy, the living standard of people is not good, we have martyrs and wounded, the availability of social and political stability in the republic is one of the most important preconditions. As you now, this stability was violated on June of the last year. Some forces and groups guided by their own interests, ambitions and intentions to struggle for coming to power wanted to divide Azerbaijan on several regions. This attempt was prevented.

However, some forces and group are still trying, - as it was mentioned here by one of the speakers, - to organize disorders and making use of tense situation in the republic they want to organize collisions among people. Thus, in place of thinking about people, Motherland and independent state in this heavy period, they are trying to realize their own intentions and dirty plans. Nonetheless, both them and all citizens of Azerbaijan, including oilmen should know that we will never allow them to do that.

I am trying and I will try to justify the confidence of people on me at all spheres. For justifying this confidence I am trying and I will try to make Azerbaijan out of the war situation, to end the social and economic crisis, to protect the rights and freedoms of every citizen, to defend the independence of Azerbaijani state and national freedom of Azerbaijani people and not to allow falling of Azerbaijan people under yoke in the future. For justifying of people`s confidence I am trying and I will try to secure the stability of internal social and political situation. If someone or some group try to make obstacle on the way of achievement of this high mission, the appropriate laws of the state will be implemented against them. Nobody should think that the state will not be protected. No, the state is being protected, the rights of every citizen as well as the independence of Azerbaijan are under protection, I have taken the oath as the President and I will do it.

While saying this I am relying on the wisdom and the consciousness of Azerbaijani people. Saying these words I would like to state that I am sure that the Azerbaijani people and all citizens of our country will come together and unite for realization of these tasks and will take necessary measures for overcoming all barriers on the way of independence of Azerbaijan. I am hopeful and I rely on our heroic, brave and proud oilmen that they will realize these objectives. I wish to you, the heroic oilmen of Azerbaijan successes, courage and happiness.

I think that we will celebrate the 45th anniversary of offshore oil production by the end of this year. I approve the proposal to establish the Day of oilmen voiced here and we will take the necessary decision in this regard. In general, I always displayed my love and care towards oilmen and I will do it further. I congratulate you once again on the occasion of this holiday and I wish to each of you and to all oilmen happiness and successes in your hard but honorable work.

Thank you!