Interview of the President of Azerbaijan Heydar Aliyev to the reporter of Reuters in Tokyo - Tokyo, February 27, 1998

Question: My first question is about the pipelines. As I understand, you intend to build the pipelines in three directions. One of these pipelines which extends from Baku to Novorossiysk is ready. Other pipelines will be laid from Baku to Ceyhan and from Baku to Supsa. I know that you prefer Baku-Ceyhan pipeline. What is the reason of it?

Heydar Aliyev: You probably misinformed about it. We support all of the three directions. We have already built the first oil pipeline, Baku-Novorossiysk. This pipeline is already being exploited. The pipeline was constructed to export the early oil. It goes through Russia to the port of Novorossiysk the Black Sea. Through this pipeline we are already transporting oil. The second pipeline, similar to the previous one, we build from Baku through Georgia to the Supsa port of the Black Sea. This pipeline is built for the early oil exports, too. Both pipelines are alternatives to each other. That is, one of them lies in the northern direction and the other one in the western. Their capacity is not so great. But Baku-Ceyhan pipeline is the main pipeline. It can export about 50-70 million tons of oil a year.

To make it clear, I shall say that the northern pipeline has already been built, and exploited. We must finish the construction of a second pipeline, which is to be laid through Georgia to the port of Supsa on the Black Sea, by the end of this year. Now the draft of the Baku-Ceyhan pipeline is being developed. It demands a lot of money. Thus, we believe that we are to decide to start its construction by the end of this year.

Question: That means that you have not yet come to a final decision, whether you are going to build the pipeline.

Heydar Aliyev: No, we have already decided. The project should be ready and its financial issues should be solved. This is our opinion.

Question: Does the International Operating Company agree with this plan?

Heydar Aliyev: They mostly do. It is true that they have some questions about financing of the pipeline. We have to work in this direction.

Question: Can you say something about the time, that is, about the time of completion of the work?

Heydar Aliyev: I cannot say anything about it yet. But I think that we must start it by the end of this year. According to the contract which we signed in 1994, the period of construction of the pipeline is 4 years.

Question: Can we make a conclusion that the pipeline will work in 2002?

Heydar Aliyev: I wish it were.

Question: My next question is about the drilling works. Will you create conditions for foreign companies to conduct drilling operations in Azerbaijan?

Heydar Aliyev: Without drilling operations oil cannot be produced. Perhaps, the question was incorrectly translated or wrongly put. You are interested in the allocation of places for foreign companies in new fields?

Journalist: Yes, we do.

Heydar Aliyev: Azerbaijan has rich oil deposits. In order to use these fields in future, we shall continue our cooperation with foreign companies.

Question: Can you tell when you are going to do it and what field you mean?

Heydar Aliyev: We do it all the time. For example, we signed the first contract in the September of 1994. A little late we signed nine contracts. Several Japanese companies have also created a consortium and are willing to work together on one of our fields. They asked us to agree to sign the contract. However, there is a need to explore some of the issues, some issues are not clear to me. Thus, I postponed it.

I mean this process continues. Major oil companies of the world constantly display great interest in the oil fields of Azerbaijan. We have several perspective deposits. Foreign companies have already studied them, they know the reserves of these deposits and requested us to work there.

Question: Can we come to a conclusion that Azerbaijan will keep its oil deposits open to the foreign companies in future?

Heydar Aliyev: Yes, absolutely.

Question: Yesterday you, along with Prime Minister Mr. Hashimoto had to sign a document on the work of the consortium in Azerbaijan organized by the Japanese companies. However, this was not signed. The Japanese side stated that the Azerbaijani side delayed the documents. Is this true?

Heydar Aliyev: No, it is not. You know, we are very serious about signature of these contracts. Every question and every condition should be clear to us. We sign a contract on the work for decades. Therefore, if something is not clear, we should not rush. Materials prepared by the consortium of the Japanese companies with the State Oil Company of Azerbaijan are not complete and perfect. Some conditions are not clear there. Therefore we were not able to sign the contract. It is true that Japanese companies are eager to sign this contract. But if some of the questions are not clear, we cannot sign it yet.

Yesterday we were at the residence of Prime Minister Hashimoto and signed a contract with «Mitsui» company. Everything is clear there. We signed a contract with the Italian company «Eni-Agip» on a part of this oil field on September 15. We gave the 15 per cent of it to «Mitsui» yesterday, because all the conditions were clear there. «Mitsui» agreed with the conditions of the contract, but «Eni-Agip» not. Thus, we signed a contract with “Mitsui».

I think that we shall be able to sign this contract in future. I gave them two months to work on these documents yesterday. When the documents are ready, if the conditions are determined, then we shall sign this contract.

Question: Can you disclose more details of the plans of the government on the oil refining and chemical sector?

Heydar Aliyev: We have a lot of plans in this sphere. First, on the chemical sector. Here, we have signed a big contract with «Nichimen» and took credit from Export-Import Bank of Japan. The amount of the credit is 75 million USA dollars. But the total cost of this project is up to 100 million dollars. «Nichimen» will work there with us.

Question: Azerbaijan is located on a very fragile territory from the geographical and political point of view. Russia is located in the north, Iran in the south, Armenia and Turkey in the west of Azerbaijan. How do you see the relations of Azerbaijan with the neighbors?

Heydar Aliyev: We want to live with our neighbors in terms of friendship and peace. We have close friendly relations with Turkey. Relations with Russia and Iran also are friendly. We have another neighbor - Georgia. We have very good relations with Georgia, which is also friendly.

You know that we are in a military conflict with Armenia. Armenia committed a military aggression against the territory of Azerbaijan 10 years ago. They started this war in order to tear the Mountainous Garabagh which is part of Azerbaijan, and to attach it to Armenia. The war started, blood was shed and 20 per cent of the Azerbaijani territories were occupied by the Armenian armed forces. Over a million our citizens were forcibly deported from the occupied lands. It is true that for nearly four years, there is a cease-fire. We negotiate to resolve the issue peacefully, but we have not got the final results yet.

The geopolitical position of Azerbaijan is strong and profitable indeed. But the attitude towards us is complicated.

Question: Russia and Iran proposed to share the oil and gas resources of the Caspian Sea among the littoral countries. As I understand you and the two countries want to let each country use its own resources. Do you agree or disagree with Russia and Iran?

Heydar Aliyev: Our proposal is that the use of mineral resources of the Caspian Sea can be implemented by dividing the Caspian Sea into sectors. During Soviet period, the Caspian Sea was divided into sectors among the littoral republics. The Caspian Sea was also divided into sectors between Iran and the Soviet Union. The tradition continues for decades. We believe that this is the most fair principle. We conduct our work in the Azerbaijani sector on the basis of this principle. Kazakhstan also agrees with this principle, but Russia and Iran do not accept it. But I think that there cannot be more acceptable principle than this.

Question: Are you fully confident that it is the most acceptable principle?

Heydar Aliyev: Yes, I am. I hope that other states gradually will come to this opinion.

Question: Thank you for the allotted time and for your information. Thank you very much for giving me this opportunity.

Is it true that you were the only person in the Soviet Union, who openly spoke on Chernobyl catastrophe in 1987?

Heydar Aliyev: It happened in 1986, but not in 1987. Yes, in the discussion of this issue in the Politburo of the Central Committee of the Communist Party of the Soviet Union, I openly told Gorbachev and other members of Politburo that it cannot be hidden and we must immediately disclose everything and inform the world about it. Regarding this issue, I had a very big conflict with Gorbachev and Ligachev in Politburo then.

Question: Were you the only person who suggested it?

Heydar Aliyev: Yes, I was. But Yakovlev confirmed it after me. He was a member of the Politburo then too.

Reporter: Mr. President, thank you so much once more.