Speech of the Azerbaijan President Heydar Aliyev at the meeting with representatives of financial and business circles of Russia - Moscow, July 3, 1997

Dear Boris Yefimovich! Dear friends, I am glad for the meeting with you. This meeting has special value as it is a question of the leading branches of economics both for Russia and Azerbaijan.

Certainly, Russia is a great country, it has huge economic, including industrial potential, which is well-known to everybody. However, now, when a process of transition to new system, realization of reforms is underway, we see that the fuel and energy complex of Russia and first of all, a petroleum industry takes more important place. And for Azerbaijan, the petroleum industry is the leading branch since ancient times. Azerbaijan was known as a country of oil, the land of fires in the past. And if a petroleum industry has now appeared as the main field for such great country as Russia, which has the diversified industry, a petroleum industry has exclusively great value for Azerbaijan. Therefore, the meeting in such wide structure with representatives of the oil companies, financial structures and centers of Russia is of great importance. I express my gratitude to you, Boris Yefimovich, for this meeting.

I want to say that since we have followed a way of market economy, openness for foreign investments, mutually advantageous cooperation in Azerbaijan, we have opened our republic for the entire world, not created any barrier to anybody, not invited anybody specially. If we consider that Russia and Azerbaijan have always been together, our economy, especially a petroleum industry has developed in indissoluble communication, certainly, the Russian companies and the Russian fuel and energy complex should take a special place in Azerbaijan.

I should say that the company "Lukoil" has been initiator in this respect. As Vahid Alekberov told here, since 1993, we had active contacts, and it is not casual that in the first contract, which we signed in 1994 and in some circles of Russia has been met spitefully for some reasons, "Lukoil" has a solid share. We signed this contract together, Vahid Alekberov and someone from heads of the Russian Ministry for Fuel and Power were there too.

Yesterday, I told it to Boris Nikolayevich as well, that we signed the second contract only with the company "Lukoil" which is the operator and also involved the Italian company "Agip" in this contract. Yesterday, he told to Boris Nikolayevich that they had 50 percent in this contract and he was the owner of this deposit. I should tell that he is generally a prompt person, he knows to where he aspires. In fact, this deposit, on which we signed the second contract, now, as it is found out, has much more stocks, there are greater prospects than we assumed.

So the company "Lukoil" has taken its place, it has the share of participation in the third contract, in which "BP", "Statoil", and the Iranian company participate. At last, yesterday, as you, Boris Yefimovich, correctly said, we have signed the important contract. It is already his initiative, he has opened a way for it. By the way, I should note that he has shown great persistence in it. We usually prepare such contracts for a longer time. And here I have mobilized our people. He has mobilized his people and it was possible to do all of these for a short time. We have never prepared any contract for such time. Negotiations were being carried out on this deposit, there were preparations and so on. But when date of my visit was scheduled, he raised a question to sign the contract in Moscow and we agreed with him. And now "Lukoil" participates in four contracts.

I am speaking about it, because sometimes here, in Russia, in various circles, unfortunately, sometimes on the state level, there are conversations that Azerbaijan keeps away from Russia. It has more close relations with the western companies and so on. Malevolent persons of our republic want to create artificially unhealthy atmosphere, distribute it in a press and write various articles and so on. I will be honest, it causes very big discontent in us. Nevertheless we work together. I know dear Chernyayev for a long time. We worked together, he is very experienced person. Generally, I am glad that such skilled staff is kept and today they develop the economy. Or Muravlenko, I perfectly knew his father who had huge merits in Tyumen, he is a legendary person. I am glad that the son continues work of his father. I knew Muravlenko when I still worked in Azerbaijan, then in Moscow. I am repeating, he is a legendary person, a legendary man. Together with our Azerbaijani Farman Salmanov who was the head geologist, and Muravlenko was the chief of all board, they have discovered all these deposits, moved towards the Northern Sea and done great work. His son recently came to Baku, it is a pity that we could not meet, but both Ilham and Natig told me that you had a rational talk.

Or dear Putilov, - he also came, we made a meeting and then talking. I do not send them to somewhere, and I meet them myself, I talk, I instruct. That is, - understand me correctly, - I spend my time only because we are talking about Russia, the Russian companies, we want they to participate in our contracts. I got your letter concerning a deposit "Kapaz" with pleasure and I am glad that now this project is already being realized. Now they will sign it with our presence.

In general, as the friend of Russia, I want to note, I meet with satisfaction that this complex is headed by the first vice-premier of Russia, such vigorous person Boris Yefimovich Nemtsov who has reformatory spirit. He is known not only in Russia, but also in Azerbaijan, all over the world for his fine works in Nijni Novgorod. I sent big parliamentary delegations from Azerbaijan to you when we prepared for the law on land reform, on other reforms. Why to you? Because you have got greater popularity in the reformatory issues, and we really felt that big businesses are done there. Therefore, we sent delegations to you to study your experience. I sent delegations to the Oryol region, to Yegor Semyenovich Stroyev. So we use experience of Russia, we cooperate and we will cooperate with Russia.

I hope that now, after the meetings, held yesterday, the day before yesterday and today in Moscow, all these unhealthy conversations, which have been till now and, maybe, will be tomorrow - because there are a lot of ill-wishers, you will stop them that they will not appear in the Moscow press or in Moscow. I know that you can not do with the press but you can declare your position.

Boris Nemtsov: By the way, the press has not published any bad article related to your visit.

Heydar Aliyev: First of all, I come to a conclusion from today`s meeting that "Transneft" is engaged, oil will be transported, and all will be executed on scheduled date.

Now "Lukoil", "Rosneft" and the Azerbaijan oil company are going to sign the document on a deposit "Kapaz". Muravlenko has been in our country, we have told him that it was necessary to continue contacts with us. "Sidanko", please, give your offer. Who has still remained? Bank "Russian credit"? When I return to Baku, he will come to us, we will meet and necessarily continue our conversation and find more correct way for development of bank "Russian credit" in Azerbaijan. "Mostbank" works very normally, I wish it success.

As I said yesterday, all the Russian telechannels are completely broadcasted in Azerbaijan. Yury Mikhaylovich Lujkov asks that to broadcast his channel. If it is necessary, of course we will broadcast it.

What else I would like to tell? The fact is not only in oil extraction. We have a big oil engineering industry. You perfectly know that 70 percent of the oil-field equipment has been sent to Siberia, Tatarstan and Bashkortostan by us. But these communications have been stopped, our machine-building factories have turned into very heavy position. But the fact is not only in it, we will rescue them from this position. But if there is a factory, which manufactured well arranged and equipment, then why do not we use it. I have recently been in Kazakhstan. We have signed the special agreement on oil mechanical engineering between Kazakhstan and Azerbaijan that they can use our factories. Therefore, let`s cooperate in this direction.

You know there is a big chemical complex in Sumgayit and Baku. It has relations, but it is necessary to proceed and extend these relations.

Basically, oil-extracting branches are presented here. But it is possible to cooperate in other fields as well. The foreign companies, with which we have concluded oil contracts, declare the tender, involve many other companies of the world. I understand that such companies have not been established in Russia yet. But imagine, such small country as Norway, has more than 60 offices of the various companies in Baku. And, if their company "Statoil" participates in an oil recovery, it involves many other service companies too. The number of offices of the British and US companies is approximately the same. It is also necessary that the Russian companies would come. But it is not done, there is not such initiative, such activity. In fact, foreign trade has been liberalized in our country; we have given to the investor very large privileges and even created immunity for profits of investors. Why do the foreign companies actively come to Azerbaijan? Because they have the right to use their profit as they wish. In our republic it is the lowest profit taxes. We have done all of them, therefore the western investors come to us and are very active.