PREFACE BY ILHAM ALIYEV, THE FIRST VICE PRESIDENT FOR SOCAR, TO THE SECOND ISSUE OF THE CASPIAN ENERGY MAGAZINE DEVOTED TO THE 5TH ANNIVERSARY OF THE CONTRACTOF THE CENTURY
On September 20, 1994 Azerbaijan's first international oil contract, which has been widely labeled "the Contract of the Century", was signed between and by the Government of Azerbaijan and the representatives of ten western oil companies from six countries of the world.
Importance and wisdom of the decision made by Azerbaijan President Heydar Aliyev five years ago cannot be overestimated.
Apart from direct economic advantagesfor the republic, the Production Sharing Agreement prepared the way forinvestments in another sectors of national economy such as telecommunications,construction, machinery construction, agriculture, chemical industry, paidconsumer services, personal services activities and many others.
Due to the consortium being composed of the companies of the USA, the Great Britain,Norway, Russia, Turkey Saudi Arabia, the republic's cultural and scientificties were boosted.
The contract renovated Azerbaijan's oil industry and created many new jobs, which was of great value to the republic with more than one million of refugees.To date, several thousands of joint ventures operate in the republic and more than 25 Azeri cultural centers function in the USA, UK, France and many othercountries.
The most significant achievement of the contract is its contribution to anincrease in the republic's political weight on international scene.Azerbaijan got the great powers' political support through their involvement in the country's economy and the backing was needed for all foreign policychallenges that the republic has had to solve.
The West demonstrated its attitude to Azerbaijan as an equal partner, the stability of which allows overseas companies to invest in the country's industry.
The further developments showed that the contract of the century was the first move on the way to this. Its consequences were large investments in the country's oil industry. In Azerbaijan already 17 deals signed with major oil companies like BP Amoco, Exxon and Mobil are now in effect, to explore and develop the country's both onshore and offshore fields.
Further evolution of the contract of the century -- the production of oil ingreat quantities from the contract Azeri, Chirag and Guneshli areas and the consequent transport of this crude oil through an export pipeline, which is expected to be built in the next few years along the Azerbaijan - Georgia -Turkey route, -- will also enable Azerbaijan to become a major transport hub forexporting oil owned by other Caspian states.
A hydrocarbon find has recently been made at the key Shakh Deniz Caspian appraisal well. BP Amoco has struck large reserves of natural gas. The field's gas and condensate volumes assessed suggest that in the next few years Azerbaijan will become a large exporter of not only oil but gas.
However, there are still many problems to be resolved and lots of work to be done here. They are linked to producing, processing, using and delivering Azeri gas to worldmarkets.
All this demands to develop a single-minded and clear-cut strategy for pumping Caspian energy resources out to world markets. It will allow Caspian oil and gas to occupy a due niche in world markets.
Therefore it is currently essential to provide rightful and credible news of all the events pertaining to oil and gas industry of both Azerbaijan and other Caspian countries.
The CASPIAN ENERGY magazine is designed to further this. Todate, the magazine is Azerbaijan's first oil journal breaking the news of developing and delivering oil and gas projects in the Caspian countries.
I hope that further the CASPIAN ENERGY journal will become a source of reliable information facilitating the evolution of economic interactions between the Caspian countries as well as further attracting foreign investments in Azerbaijan's economy.
I wish the magazine's editorial staff a great success in their fruitful and very important activity for the long-term well-being of independent Azerbaijan.
Ilham Aliyev,
The first Vice President
for the State Oil Company
of the Azerbaijan Republic