NEWEST HISTORY OF AZERBAIJANIAN OIL

By signing, under the leadership of Azerbaijan Republic President Heydar Aliyev, historical contract of the century - Agreement on prospecting, development and production sharing on oil deposits "Azeri", "Chirag" and deepwater section of "Guneshli", Azerbaijan laid foundation for its long-term economic development. Nine years ago Azerbaijan showed itself as one of the major hydrocarbon producers and exporters. By 2010 the country will produce and export over 50 mln tons oil and 6.6 billion m_ gas annually. Two major projects - "Azer-Chirag-Guneshli" oil field development and "Shah-Deniz" (in addition to others), as well as two export oil-and gas pipelines Baku-Tbilisi-Ceyhan and Baku-Tbilisi- Erzurum provide such export chances for Azerbaijan.

"Azeri-Chirag-Guneshli" (ACG) contract was signed between Azerbaijan and foreign companies on September 20, 1994. American Amoco, Unocal, Pennzoil, Exxon, McDermott, British "British Petroleum", and Ramco, Norwegian Statoil, Russian LUKoil, Turkish TPAO and Delta Oil from Saudi Arabia were among agreement participants, which then formed the Azerbaijan International Operating Company (AIOC). Later consortium participant companies' list underwent some changes; contract shares were redistributed and re-bought. American "McDermott" "bowled off", Japanese "Itochu" entered AIOC, two oil giants - British Petroleum and Amoco consolidated. American Mobile entering the consortium, consolidated with Exxon, which already was project participant. Besides, new names appeared in AIOC: Devon Energy (former Pennzoil); British Ramco left the project in 2000 selling its share (2.0825%) to Saudi-American alliance Delta Hess for $ 150 mln. And in 2002 Russian LUKOIL sold its share in the project for $ 1.375 billion to Japanese INPEX.

The Construction of Baku-Tbilisi-Ceyhan Oil Export Pipeline Begun

The seventh meeting of the Board of Directors of Baku-Tbilisi-Ceyhan (BTC) Co. took place in Baku April 29. Representatives of 11 companies - shareholders of BTC Co. Took place in it. Reports on condition and statutory indicator of the project in all three countries-Azerbaijan, Georgia and Turkey, on territories of which the pipeline is being constructed and in which the corridor of the Main Export Pipeline Baku-Tbilisi-Ceyhan is located, have been brought to life.

It was satisfactory repeated on the meeting that the work is getting done in accordance with schedule.

ExxonMobil

Baku, April 30 - An ExxonMobil subsidiary, Exxon Azerbaijan Operating Company LLC (Exxon Azerbaijan) has announced that it plans to commence drilling the first exploration well under the Production Sharing Agreement (PSA) for the Zafar Mashal Prospective Structure in the Azerbaijan sector of the Caspian Sea in the third quarter of 2003. In preparation, Exxon Azerbaijan held a public consultation meeting to discuss potential environmental and social impacts of the proposed drilling program.

Azerbaijan - From Camels to Pipelines

Azerbaijan has always formed an important bridge between east and west. Today, pipelines, oil and gas have replaced camels, spices and silk as important elements in this bridging role.

Azerbaijan has fought its way out of the political and economic crises of the 1990s and has experienced positive economic growth since 1996. Still, Azerbaijan has just begun on its road to sustainable growth and development. The country's GDP is recovering slowly and a strategy to combat poverty is now in place. More than 800 000 refugees and IDPs are still waiting to return to their home lands.

"NECESSITY IN ALTERNATIVE EXPORT PIPELINES IS TO APPEAR AFTER 2010"

- VLADIMIR SHKOLNIK, MINISTER FOR ENERGY INDUSTRY AND MINERAL RESOURCES OF KAZAKHSTAN

Caspian Energy: Vladimir Sergeyevich, how would you assess the level of investment stability and attractiveness of the investment atmosphere of Kazakhstan for strategic investor?

Vladimir Shkolnik: The investment into prospecting and development of the hydrocarbon crude has increased from $0.9 to $4.7 bln within 1996 to 2001.

The investment for the prospecting and development of the hydrocarbon crude made about 74.5% of all investment in the mineral crude complex of the country.

Out of which more than 86% comes to foreign investment. This remarkable growth of the investment in a comparably short time is an indicator of the high level of investment attractiveness of Kazakstan and the stability of the investment atmosphere of Kazakhstan.

OUR BUSINESS:

ENGINEERING, TECHNOLOGIES AND CONSTRUCTION SERVICES

Technip-Coflexip is one of the most integrated groups providing engineering, technologies and construction services to the oil/gas and petrochemical industry worldwide. With over 40 years of experience in the design and construction of large industrial facilities, a wide range of state-of the-art technologies and operational bases spread over the 5 continents, the group is able to manage all aspects of major projects, from front end engineering design to turnkey delivery.

AZLAB

A FUTURE RESEARCH CENTRE

Rafiqa Huseynzadeh General manager of AzLab.

The story of oil and gas recovery in Azerbaijan is known more than 100 years. The foreign scientists and experts have long been emphasizing particular quality of the AzeriLight oil blend, frequently used for medicinal purpose. And today, when Azerbaijan has gained the sovereignty and is realizing large-scale regional projects of the strategic importance jointly with foreign oil companies it is impossible to overestimate the commercial significance of the Azerbaijanian oil.

In 2005 Azerbaijanian oil is to make way into the open world markets. Availability of modern research and analytical centers that can classify exactly and even predict the results of these or other prospecting not only in Azerbaijanian, but also in the Caspian shelves of other littoral countries, is becoming a barest necessity with the growth of the topicality of the Azerbaijanian oil, as well as the exploration activities in the Caspian.

Another Year of Excellent Progress for Intertek Caleb Brett

We are delighted to share our continued successful achievements through further investment and our long-standing commitment to the needs of the Caspian and Black Sea regions:

CDC - Work on international standards

Q: Your Company was registered in 1996 and started your activities in 1997. Could you deal with the work done and how our country has benefited from it?

Saiq Bakirov: Our Company started its activities by modernization of the Shelf-5 rig, which was re-named in 1998 into Istiqlal. Prospecting Shah Deniz field began just from this step. Since the time our Company has managed to drill prospecting and out-stripping wells in more than 13 PSA's structures by means of Dada Qorqud and Istiqlal rigs.

CONSTRUCTION OF THE DSS 20 SEMI-SUBMERSIBLE DRILLING RIG

From the road overlooking the Bibi Heybet bay, visitors and participants to the 10th International Caspian Oil and Gas Exhibition and Conference in Baku would be able to see the bright lights coming from the derrick sitting on top the semi-submersible rig. This is the DSS 20 Semi-submersible that is currently being built in Caspian Shipyard Company Limited. Such bright lights were last seen 3 years ago, when the same yard was building the Qurtulush Jack up rig which was subsequently delivered in September 2001 (two months ahead of schedule).

AZERBAIJAN EMPLOYERS CAN OPERATE KEEPING TO INTERNATIONAL STANDARD

SAGA SHIPREPAIR CO. EXPANDS HER ACTIVITIES TO KAZAKHSTAN AND RUSSIA

Sakin Abdulhuseyn Agayev, was born in 1963, engineer-naval architect, graduated from Odessa Navy Engineers Institute in 1985, graduated from special course of marketing and business in Turkey in 1991, director of "Sa"‡ G?mi T?miri "(SAGA Shiprepair Co.), and General director of Kazakhstan-Azerbaijan joint enterprise LLC SAGA ATASH.

SAGA Shiprepair Co. is one of Azerbaijanian enterprises which provides repair, modernization and building of vessels and other floating facilities on professional level. Our interlocutor is Sakin Agayev, director of the company.

Marine industry plays an important part in economical development of our country. There are about 600 items of vessels and other facilities in our Republic. And we would like to keep them at high technical level for the welfare of our country. And it is important that first of all we use potential possibilities of local companies and professionally skilled specialists of our Republic.

POTI TERMINAL IMPLEMENTS HIGH STANDARDS OF SERVICE!

CHANNEL ENERGY
(POTI) LTD GEORGIA

Channel Energy, which has over 20 years of experience in operating third party storage business, has made an important commitment to the Poti Region, in September 2002, when it finalised its Phase I terminal with a total capacity of about 40,000 cbm with the capability to handle all white products supported by 24 wagon discharge units. During the course of the year, Channel Energy will add another 80,000 cbm of capacity that can handle black products and crude oil to become a fully integrated terminal. Channel Energy has already been operating a floating storage terminal since 2000 in the Port of Poti, where more than 300 vessels called for loading and discharge of oil products.

ER-CE Makina is one of the numerous service companies that contribute to the lucrative oil industRy in Azerbaijan

Tuncay Gunduz President

The field of activities of ER-CE Makina is unique in its type as it directly affects the economical and ecological aspects of the country.

ER-CE basically prides on two products: Designing internal floating roofs made of aluminium for oil and chemical storage tanks of any capacity according to API 650 appendix H requirements.

These floating roofs are an effective means to stop loss of product that evaporates specially in summer time due to high temperatures above flash point of the product. According to API MPMS Chapter 19/3 No. 2518 a storage tank with diameter 15 m to 16 m loose about 150 to 160 metric tons of product each year. By installing internal floating roofs this loss reduced to 10 metric tons per year.

In this way by reducing loss of product from evaporation the owner of storage tanks can save appreciable amount of funds that effect directly on the economy of the country.

RISK & INSURANCE

In our last issue we had published a thorough information about International Insurance Company, its position in the market and the services it rendered. And today we have decided to interview Khayal Mammadkhanli, Chairman of Supervisory Board of the International Insurance Company, and brighten up theoretical features of insurance and deal, first of all, with "risk" concept of the insurance, its crux.

Risk is the first basic concept of the insurance. What is meant when we talk about risk?

In literal translation the word "risk" means to take a decision the result of which is not predicted, to be more exact, to take a non-safe decision. Insurance risk is to be perceived in two meanings:

10 Year
The Bank comprises the following other information:

Zakir A. Nuriyev

CHAIRMAN OF THE RABITABANK SUPERVISORY COUNCIL

A new qualitative bank service for Communication system was important pursuant to organization of transfer operations for physical entities and the development of telecommunication in Azerbaijan. For this purpose Joint-Stock Commercial Bank Rabitabank was founded in 1993. If 100% of the Share Capital of Bank was the capital of state communication enterprises when it was founded, as the Share capital has increased now and 94,96% of whole capital belongs to non-state enterprises. Main activity of Bank covers internal and foreign currency crediting, trade and non-trade operations. In spite of that Communication systems, posts and press disseminating enterprises have been assembled in our Bank. From this point of view Rabitabank has become a universal bank.

OPTIMISM BASED ON HIGH QUALITY SERVICES

Deloitte & Touche Audit Consulting Company has confidently entered the market of Azerbaijan. Having received a registration certificate last November at Azerbaijan's Justice Ministry, the Company has shortly won a good deal of clientele. Besides it was chosen a financial consultant for the World Bank project to prepare the gas distribution system of Baku municipality to privatization.

OIL INDUSTRY OF AZERBAIJAN

* XIX - XX century

In the development of Azerbaijani oil industry 5 stages can be distinguished:

I STAGE - mud oil production till 1871

II STAGE - industrial oil production with application of mechanical drilling methods beginning from 1871 till nationalization of oil industry in 1920

III STAGE - from nationalization of oil industry during Soviet period till discovering and putting into exploitation the large-scale Oily Rocks offshore field in 1950

The Oil of Baku Archipelago

Dedicated to the 40th Anniversary of Starting the Developing of the large oil/gas field Sangachal - Sea, Duvanny-Sea and Hara Island-Zira

Mr. Rasim Museib oglu Dadashev was born on January 21, 1933 in Baku. He is the member of Yeni Azerbaijan (New Azerbaijan) political party. Mr. Dadashev graduated form the Geological Survey Faculty of the Industrial College of Azerbaijan with a major of mountainous engineer-geologist.

1957-1964 - operator of oil & gas wells research, engineer of servicing wells of second field of Gurganneft Scientific & Production Company, Neft Dashlari State Scientific Company at present, engineer-geologist of the Geological Department of Gurganneft.

INVESTMENT INCENTIVE: DIVERSE PLANS

A Conference dealing with Investing in Azerbaijan - Gateway to the Newly Independent States was held here in Baku on May 7-9. The conference was organized under the support of International Financial Corporation, SECO and SOFL. More than 600 businessmen, delegates of international organizations and governments were taking part in the forum. Johannes Linn, vice president of the World Bank (WB) for Europe and Central Asia, represented the WB, while the International Financial Corporation was represented by Peter Woicke, Executive Vice President of the Corporation, the government of Switzerland was represented by David Syz, head of the State Secretariat for economic relations.

IRSHAD HOTEL

We are situated in one of prestigious and environmentally clean district in Baku. The building, built in1997, consist of 6 floors. The nice building faces Caspian Sea and this fact in combination with microclimate of park, creates a high comfort and good conditions for rest of our guests.