Speech of Azerbaijan President Heydar Aliyev at the contract signing ceremony on the joint development of the deposits in the Caspian shelf between the State Oil Company of Azerbaijan Republic and the consortium of the foreign oil companies - September 20, 1994

Ladies and gentlemen, dear guests!

Today a historical event takes place in the life of the Azerbaijan Republic. Three-year long negotiations on the joint exploitation of "Azeri", "Chirag" oil deposits and a part of "Gunashli" oil deposit in the Azerbaijan sector of the Caspian Sea with the participation of Azerbaijan State Oil Company and oil companies of foreign countries have come to an end. The project of contract on joint activities has been worked out. We have assembled at this ceremony, today, in Baku, of Azerbaijan`s capital, in this beautiful palace of "Gulustan, for signing of the contract.

In connection with the signing of the contract, the official representatives of foreign states and guests have arrived in Baku. Of all my heart I greet all the guests who have come to take part in the signing ceremony, I say "Welcome" to all of you!

The negotiations carried out by Azerbaijan State Oil Company with the oil companies of foreign countries have always been under the protection of the governments and states of these countries and supported by them. Representatives of foreign countries have come to the contract signing ceremony. I greet heartily the representatives of the United States of America, the Russian Federation, the United Kingdom of Great Britain, Turkey, Norway who are taking part in this ceremony. I tell them "Welcome"!

I welcome Mr. Najmaddin Jovhari, the State Minister of the Republic of Turkey who is taking part in this historical ceremony. I welcome Mr. Timothy Eggar, the Minister of Energy of the United Kingdom of Great Britain. I welcome Mr. William Write, Deputy-Minister of Energy of the United States of America. I welcome respectable Mr. Gunnar Murvang, the first Deputy-State Minister on Energy of Norway. I welcome respectable Mr. Stanislav Pugach, head of the chief department of the Ministry of Fuel and Energy of the Russian Federation. I welcome the members of parliament of Great Britain, the delegation of the friendship society "England-Azerbaijan" who have taken trouble to come to Baku for taking part in this ceremony. I welcome Mr. Ocam Jafar Fakin, the President of Islamic Development Bank, who is taking part in our ceremony. I welcome the representatives of diplomatic corps in Azerbaijan, I welcome the distinguished ambassadors, the representatives and leaders of international organizations.

Azerbaijan State Oil Company carried out talks for three years with oil companies of foreign countries and later with the Consortium they joined to, have worked out the project of the contract together. The delegations of these big oil companies are present in our ceremony today. I welcome them heartily. I welcome Mr. William Laury, president of "Amoco" company. I welcome the delegation of "British Petroleum". Mr. John Brown, president of the company. I welcome the delegation of "Statoil" company and its president Mr. John Nick Wald. I welcome the delegation of "Lukoil" company with its president Vahid Alakbarov. I welcome the delegation of "McDermott" company, Mr. William Witness, head of company. I welcome the delegation of "Pennzoil" company, Mr. Thomas Hamilton, its president. I welcome the delegation of "Ramco" company, its president Mr. Steven Rampon. I welcome the delegation of “Turkiye Petrolleri” Company, Mr. Sidghi Sanjar, head of the company. I welcome the delegation of "Unocal" company, Mr. John Amely, its president. I welcome the delegation of “Delta International” company, Mr. Fateh Al-Alban, its president.

Ladies and gentlemen!

Oil is the main national wealth of Azerbaijan and its people. Azerbaijan is the land of oil since ancient times. It possesses natural resources as oil and gas. That is why Azerbaijan is called the land of fires. Azerbaijan has rich history in oil extraction and exploitation. For the first time in 1847, oil fountain gushed in Azerbaijan, in Bibiheybat, Baku. The process of oil extraction by industrial method was applied since then. In 1872, the Nobel brothers organized the first oil company in Baku and with it companies of foreign countries, foreign capital began to stream to our country for making use of the Azerbaijani oil.

Thus, in the second half of the XIX century, a number of world countries, companies of the developed countries displayed interest in the extraction of oil in Baku, in Azerbaijan. Since the end of that century, oil companies of many foreign countries began activities to extract oil of Baku. In 1872, 26 thousand tons of oil were extracted in Azerbaijan. At the beginning of the present century, in 1900, Azerbaijan already produced 10 million tons of oil which formed 95 per cent of oil produced in Russia and 50 per cent of oil in the whole world. In the first 20 years of the XX century, oil companies of foreign countries and native businessmen did much for the extraction and refining of oil in Baku, and thus, the oil industry developed in Azerbaijan.

This period may conventionally be called the first stage of the history in the development of oil industry in Azerbaijan. The entire world made use of the oil of Baku at that time. Azerbaijan oil brought great profits to the oil companies of foreign countries. Many wealthy people appeared in Azerbaijan, they took enormous profits. The development of oil industry gave a great incentive to the development of Baku and to Azerbaijan in general. Baku, the capital of Azerbaijan, turned into a big industrial city, and became one of the biggest industrial centers in the Russian Empire of that time.

Baku, a city with ancient history, changed its appearance, grew larger and finer and modern buildings, industrial enterprises, plants and other industrial objects were constructed to meet the requirements of the day. Today we must name the real value of that heritage and note the role of oil in the development of Baku, Azerbaijan.

In 1918, a democratic state was created in our country, Azerbaijan gained independence and existed as an independent state for 2 years. This state made attempts to make use of the national resources, national wealth for the welfare of the people, but unfortunately, these attempts gave no fruits. Because the democratic state of Azerbaijan came into decay in 1920. In the same year, the Soviet power was established in Azerbaijan. Since then in the course of 70 years Azerbaijan lived in the condition of the socialist system, as a part of the Soviet Union. The greatest oil wealth of Azerbaijan was used for the interests of the Soviet Union. This period may be called the second period in the life of Azerbaijan`s oil industry. This period witnessed the rapid development of Azerbaijan`s oil industry. Great efforts were rendered to the oil industry of Azerbaijan because it was very important for the development of Soviet Union's economic potential and economic might and therefore, Azerbaijan gained great achievements in the development of the oil industry.

This period gave rise to create a great army of Azerbaijan`s oil workers. The oil and gas industry of Azerbaijan developed rapidly, big enterprises were built. Research institutes and scientific centers connected with oil were formed. A special higher school to train highly qualified specialists for oil industry was founded, now the institute is called Oil Academy. The oil workers, specialists, scientists of Azerbaijan, in one word, all men who were involved in the oil industry displayed heroic deeds for the development of Republic`s oil industry and wrote glorious pages into the history of Azerbaijan.

As I said, the oil of Azerbaijan served for the aims of development of the whole Soviet Union, but not only for Azerbaijan. In 1941-1945, in the years of the Second World War, Azerbaijan produced 75 per cent of the oil of the whole country. Besides, the oil industry of Azerbaijan, our oil workers played an important role in the defeat, in the destruction of the german fascism which presented danger for the whole world. Oil scientists, specialists, oil workers of Azerbaijan took an active part in the explorations and exploitations of new oil deposits in all the regions of the Soviet Union. It is not accidental that the newly explored oil deposits, due to the efforts and toil, labour of oilmen in the territory of the Soviet Union, were called "the Second Baku", "The Third Baku", and “the Fourth Baku". The oil workers of Azerbaijan have incomparable merits in the exploration and exploitation of the biggest oil deposits of Russia in Siberia, Tumen, in the creation of big gas and oil complexes there, and up to now they form the majority of oil-men working there.

Today I consider it necessary to remind this information once again to our guests, to the Azerbaijani people, because these are facts which the Azerbaijani people may be proud of, they reveal the glory of the Azerbaijani people, they inform of the merits of our people, our oil-workers, the service contributed to the world economy.

Another achievement of the Azerbaijani oil-workers is that they have done much to extract oil in the Caspian Sea. Many steps were made in this field both in the beginning of the 1920s and 1930s, but extraction of oil in the Caspian Sea in large quantity has begun since November 7, 1949. That very day an oil-well gave the first fountain in that place of the Caspian Sea which we now call "Neft Dashlari" (" The Oil Rocks").

The experience of oil-workers of Azerbaijan on the open sea for the past 45 years was a model both in the former Soviet Union and in many countries of the world in extraction of oil from the depth of the sea. The merits of the scientists and oil-workers in this field are great.

As you know, our people got its freedom three years ago and Azerbaijan became an independent republic. Azerbaijan people became the owner of its own fate. Our people gained the opportunity to use its natural resources on its own will. Thus, a new era opened in the life of Azerbaijan. The foundation of the third period in the history of the development of our oil industry was also conventionally laid. Now in this new stage, expressing the will of the independent Azerbaijan Republic, we take necessary measures for making use of her own natural resources.

In the last three years negotiations have been carried out with the oil companies of foreign countries and agreements have been reached.

Today, on this historical day, after 150 years' period when oil was extracted and processed industrially in Azerbaijan, I thank all the generations of the Azerbaijani oil workers, scientists in the field of oil industry, specialists, engineers and workers for their efforts in the exploitation of our natural resources for improving the welfare of our people to some degree, for their heroic labour, for their great scientific discoveries, and I congratulate them with all my heart for the achievements they have gained up to now. Since the day of industrial production of oil up to now, 1,325 billion tons of oil have been extracted on land and on the open sea in the territory of our republic. 400 million tons of oil have been extracted in the sector of the Caspian Sea belonging to Azerbaijan in the course of 45 years. At the same time about 400 million cubic meters of gas have been extracted in this period. All these are great achievements and they may serve foundations for the development of the economy and oil industry of Azerbaijan.

Though we have produced much oil, we have had great successes in the past, one bare truth must be reminded that up to the recent times, that is, up to the period when Azerbaijan gained her independence, our people had never been the real owner of its natural resources. Up to 1920, though our oil was extracted both by the foreign oil companies and by our countrymen and though a lot of things were done for the development of Azerbaijan in general and Baku, in particular, the people was not the owner of its wealth.

Since 1920 great changes have taken place in the life of Azerbaijan. The economy of Azerbaijan was developed, its huge industrial and scientific potential was created, and our oil industry traversed a long historical road. But again Azerbaijan has not been the sole and complete owner of her oil. All our wealth belonged not to us, but to the Soviet State. Now we are living in a new epoch. The Azerbaijan Republic is an independent state. The Azerbaijani people are the owner of their natural resources. Our people can freely determine how to make use of these resources. The negotiations between Azerbaijan State Oil Company and leading oil companies of foreign countries on joint exploitation of oil deposits have been carried out for 3 years just on these principles. Undoubtedly, the negotiations did not always move forward smoothly. There have been hardships, ups and downs, in these talks but at last they have been concluded. The interest towards the oil of Azerbaijan by the great and experienced oil companies is natural, and it pleases us. We have also shown great interest to it and are doing it now.

Unlike the previous times, the Azerbaijan Republic holds negotiations on these issues independently with any country, including the countries to which these oil companies belong, with oil companies of foreign countries and tries to realize its own principles in negotiations. The contract on the joint exploitation of "Azeri", "Chirag" oil deposits and a part of "Gunashli" oil deposit in the sector of the Caspian Sea has been worked out and completed, finally, as a result of long talks by State Oil Company and oil companies of foreign countries. This contract was introduced to me, to the president of the Azerbaijan Republic. As you know, on September 14, after the examining the project of the contract, I gave instructions to Azerbaijan State Oil Company to sign it. The oil companies of foreign countries have also decided to sign the project. The leaders of states, to whose countries these companies belong, have also given their blessings to sign it. As a result of all these, we have assembled at this ceremony to sign the contract.

I want to say frankly, not all our desires have found their expression in the contract, but we understand that any contract must satisfy the interests of both sides. The consortium of the western oil companies tried to defend its interests, and Azerbaijan State Oil Company defended its own interests. I can say that as a result of laborious work and a great responsibility of both sides, a contract, which meets the interests of both parties, has at last been worked out. Therefore, I think this contract, which is going to be signed today, is advantageous and fruitful from the economic point of view for the present day and for the future of the Azerbaijan Republic, and because of that I have given my decree to sign it.

By this step we want to display to the world that Azerbaijan is open to the world and to its economy. By signing this contract we want to display to the world once again that Azerbaijan is a sovereign, completely independent state and her people are the right owners of their natural resources. By signing this contract we establish the relations of Azerbaijan with the advanced countries of the world, with their companies, we create foundations for joining the free market economy. By signing this contract we want to display to the world that the independent Azerbaijan Republic is a democratic and legal state, there are great opportunities for the establishment and development of democratic principles in Azerbaijan, Azerbaijan is convinced to pursue the way to the market economy. The signing of this contract is the first step, and the first big step on the road of the realization of the market economy in Azerbaijan. By signing this contract we pave the way for the foreign investment to Azerbaijan. We make condition for the activity of other companies working in various spheres of economy. By signing this contract we display to the entire world that stability is existing in the economy and in socio-political life of the independent Azerbaijan Republic. By signing this contract we hope to develop friendship, economic relations and generally consolidate contracts in all spheres with the countries to which the partner companies belong, that is, with the United States of America, Russia, England, Turkey, Norway.

Thus, there are favorable conditions to sign the contract, and today we witness a great event. Signing of the contract opens a new epoch in the life of the Azerbaijan Republic, in her economy, especially in the oil industry. The contract is being signed for 30 years. Thus, we have a long way to march, great work and tasks are waiting for us. Those people who elaborated the contract know well, but I want to tell the participants of the ceremony, declare the whole Azerbaijan people, that signing of the contract was in as much as difficult, its realization will be much more difficult. The positive results and profits from this contract for both sides, including the Azerbaijani people, and the independent Azerbaijan Republic, depend on its consistent realization. A contract is like a road with two opposite directions to move: both sides must have the same speed. Undoubtedly, great responsibility lies on the foreign oil companies. I want to hope that these companies and the state bodies of the countries, to which they belong, will take necessary and timely measures for the realization of this contract.

The responsibility of the Azerbaijan Republic is more difficult and heavy. You know that the economy of Azerbaijan is in deep crisis. There are hardships in the oil industry, too. Everybody should unite and cooperate for the implementation of the contract to overcome this crisis, to develop the economy of Azerbaijan and to raise the people`s welfare to a desirable level. I hope that the heroical and experienced oil workers, scientists, specialists, everyone dealing with this field, in one word, all must accept this task as being great and honorable and do their best for its realization. As the president of Azerbaijan, by making my decision to sign this contract, I feel responsibility, and I promise to do all what I can to realize it.

Today, in this solemn and great ceremony I congratulate the oil workers of Azerbaijan, the people of Azerbaijan, all the citizens of Azerbaijan on this remarkable historical event. I appreciate the labor of the delegation of Azerbaijan State Oil Company who was busy in the elaboration of the project of contract, in general, the work of Azerbaijan State Oil Company. I congratulate them for their achievements connected with the contract. I congratulate the leaders of the consortium of foreign oil companies, all the workers of these companies who have done a lot to accomplish the project of the contract, I wish them the best and want to express my assurance that our cooperation will be a success.

I congratulate heartily the state and government leaders of the United States of America, Russia, Great Britain, Turkey, and Norway, whose oil companies are present here, on the occasion of this solemn event.

The contract brings us close to each other, we begin a grand cooperation, and I do not doubt that it will be a success. All forces worthy to impede the contract will be defeated. As the real owner of her resources and her destiny, the independent Azerbaijan Republic will occupy her worthy place in the world community, in the community of world economy, owing to the cooperation proceeding from this contract.

I congratulate you, all the participants of the ceremony, all who positively turned towards this contract. I give my blessing to sign the contract, God bless it, be it a success. I congratulate the signing of the contract today, here, in the name of happy future of the Azerbaijani people.

Concluding remarks at the signing ceremony of the contract

Dear ladies and gentlemen!

Dear guests!

The signing ceremony of the contract, which has been prepared for three years, comes to an end. The contract has already been signed. I have delivered a speech before signing the contract. Therefore, I cordially congratulate you, the Azerbaijani people, the foreign companies to be the other parties to the contract, the heads of foreign states joining this contract and the foreign delegations on signing this contract.

Heads of foreign delegations and companies made a speech after the signing of the contract and gave useful ideas about meaning, essence and further significance of the contract. The same opinion was stressed in all speeches that the present contract was profitable both for the Republic of Azerbaijan and, as well as, for foreign companies who signed it.

Warm words and best wishes in speeches were told to the Azerbaijani People, independent Azerbaijan Republic. I am grateful for these words and now, in the end, I would like to note again that this contract will promote Azerbaijan to occupy its worthy place in the world community and will closely connect our economy with the world economy, free market economy. Above all, the contract will bring great profits for today and future of the Azerbaijani people and pave the way for improvement of the people`s welfare.

I am happy to my participation in elaboration and signing of this contract. I realize my responsibility and I am hopeful that the future generation will decently appreciate today`s historical event.

I congratulate you again. And now, I declare the first part of the contract signing ceremony closed. I wish happiness, good fortune to all of you, all the Azerbaijani People. Thank you. Good luck with this contract.