Speech by Heydar Aliyev, the President of the Republic of Azerbaijan at the ceremony of signing of Contract on joint exploration of "Dan Ulduzu" and "Ashrafi" oil fields between State Oil Company of Azerbaijan Republic and foreign oil companies. December 14, 1996




Dear ladies and gentlemen!

Dear guests!

Today a new significant event is taking place on in the life of the Azerbaijan Republic. A new oil contract on joint prospecting and exploitation of the Azerbaijan oil fields is being signed.

This event is one more valuable step in joint prospecting of the oilfields, natural resources of the Azerbaijan Republic, and for development of the economy of our country, for developing the standard of living of our people. This event is one more new showing of the complex measures taken for development the economy of the Azerbaijan Republic, for coming true of free economics in our country. This event once again demonstrates the attempt of the Azerbaijan Republic of its being open for the world economics and for its being connected with the world economics. All these together are the steps towards development of the Azerbaijan Republic, development of the living standards of our people. At the same time it is the continuation of the strategic way of the economical policy of the Azerbaijan Republic, and a new showing of our close collaboration with the big companies of the world for useful exploration of the natural resources of our country by using the modern world technology.

We are committed to follow our course in this sphere. There had been signed a great contract with largest and the most competent oil companies on the joint exploitation of oil and gas fields in the Azerbaijan sector of the Caspian Sea in September, 1994. Today I want to declare with a great pleasure that the contract signed two year ago is being carried on and it already gives its positive results. The Azerbaijan International Operating Company established for realization of that contract, has done much during this period and achieved good results.

While listening the report of the Azerbaijan International Operating Company in September of this year, it came out that the contemplated program is being carried on in time and in consecutive order. "Dada Gorgud" submerging drilling rig, which was prepared, modernized and restored by the International Operating Company, was commissioned in August of this year and by its help in "Chirag" oil field for a short of time - during 69 days a very big well was dug, good results were achieved. The given information shows that the results from that well are higher than we expected. Now they're going to dig the second well there and today we can declare with more conviction that the new one will also give its positive result. The Azerbaijan International Operating Company alongside with the digging works is also carrying out the measures connected with exploited oil.

As you know, a decision was taken on the building of two oil-pipes for exporting of crude oil. One of these pipelines will be constructed on the North direction through Russian territory to Novorossiysk port, the second one to be constructed will end in Supsa port through Georgian territory.

At the end of this year – in the first days of 1997, the first oil pipe, which will run through Russian territory to the North, to Novorossiysk will be completed and it will be possible to transport oil from Azerbaijan via that pipe-lime. The construction of the pipeline in the west direction will start by the beginning of 1997 and according the information of the International Operating Company, it will be finished by the end of 1998. Hence, the problem of exporting the mother oil according to the oil agreement signed in 1994 was completely settled.

We discussed largely the information presented by International Operating Company in September, I listened their report. The International Operating Company had informed that according to the program of the "Contract of the Century" the first oil from "Chirag" oil field will be extracted in August, 1997 and this production will be ready for exporting.

Thus, we are witnesses that the agreement signed in 1994 proved to be very successful during the last two years and all these assure us to advance at the same direction.

As you know in November, 1995, for joint use of "Garabagh" oilfield in the Azerbaijan sector of the Caspian Sea the second agreement had also been signed. Now this agreement is also under way of development. The third contract on "Shahdeniz" oil and gas field in the Azerbaijan sector of the Caspian Sea was signed also on 4th June of this year.

And today we have gathered here for signing the fourth contract, continuing our movement in this direction. This contract is on the joint exploration of "Dan Ulduzu" and "Ashrafi" fields in the Azerbaijan sector of the Caspian Sea. These abundant oilfields had been discovered even in 1970s by the scientists, geologists, oil-workers, specialists of the Azerbaijan Republic. After this some attempts had been undertaken for the exploitation of these fields some definite steps were taken for using of these fields in 1982-1985, but all them were left unfinished at that time.

Talks about the exploitation of "Dan Ulduzu" and "Ashrafi" oilfields with AMOCO and UNOCAL companies of the United States of America began in 1992. Since that the talks have been going on, and at the same time the preparation was carried on. All these works had come to there final stage in 1996. Some suggestions were voiced by the State Oil Company of Azerbaijan Republic and by AMOCO and UNOCAL oil companies of the United State of America on joint exploitation of these fields and on settling of this matter in 1996. The advantage of these suggestions, the benefit, the importance of them for the Azerbaijan Republic, all their economical and technical grounds had been discussed, analyzed several times.

After all these, I accepted these suggestions. I've signed a final decree according to the suggestion of the Azerbaijan State Oil Company on the working in "Dan Ulduzu" and "Ashrafi" oilfields and on the beginning of the exploitation of these fields and have given authorities to the State Oil Company of our republic for termination of the last stage of the talks.

As the result of all these the Azerbaijan State Oil Company together with AMOCO and UNOCAL companies of the United States of America has prepared the draft of the contract on the exploitation of "Dan Ulduzu" and "Ashrafi" oilfields. After scrutinizing this draft, I reiterate that taking into account the usefulness of this contract for our Republic I have taken an appropriate decision for the signing of this contract.

As I have mentioned, the negotiations on the exploitation of "Dan Ulduzu" and "Ashrafi" oilfields with AMOCO and UNOCAL companies of the United States of America have been conducted since 1992 up to now. In the last stage of the negotiations, other oil companies also showed interest to these oil fields. It is with a great pleasure that I would like to note the steadily increasing interest of Japan to the economy of Azerbaijan in the course of the last years. Japan companies have come to Azerbaijan, they learn the opportunities of our republic and have voiced some suggestions about the joint activity with our country. In fact, ITOCHU Oil Company of Japan showed a great interest in the oil and gas fields of the Azerbaijan Republic and have taken serious steps in this sphere.

As the result of the negotiations of ITOCHU Company of Japan with PENNZOIL and MCDERMOTT companies from the USA, the first one has entered the oil contracts in 1996, which we had signed previously. We approved it and gave our consent to it. Now, in the process of talks on the exploitation of "Dan Ulduzu" and "Ashrafi" oil fields Japanese ITOCHU company has appealed to us for getting a share and being a participant of this contract. We have accepted this appeal and now Japanese ITOCHU Company is the member of this contract.

As you know Delta company from Saudi Arabia is constantly collaborating with UNOCAL company of the United States of America. In the oil contract signed in 1994 DELTA company has a share. DELTA Company from Sandi Arabia takes part in the oil contract for exploration of "Dan Ulduzu" and "Ashraft" oilfields and it has a share in this contract. Thus, the contract on joint prospecting, exploitation and oil producing in "Dan Ulduzu" and "Ashrafi" oil fields is being signed between Azerbaijan State Oil Company and a consortium created by AMOCO, UNOCAL oil companies from the United States of America, ITOCHU oil company from Japan and DELTA oil company from Sandi Arabia.

The oil fields in the Azerbaijan sector of the Caspian Sea - "Dan Ulduzu" and "Ashrafi" are our oilfields. According to the prognoses it will be possible to produce 150 million tons of oil from these fields. For realization the project of this contract some 2 billion USD is expected to be invested. All this investment will be put by the companies, which have signed oil contract with Azerbaijan. The period of validity of the treaty is 25 years.

Undoubtedly, all this information bears a primary character; it can be subject of change. And I think that the changes will be related only with increase of these indicators. Thus, as I have already mentioned, this contract is very rational in every respect. This is very important for the national interests of the Azerbaijan Republic, for the economy of our country. At the same time, it is an advantageous and rational contract for the companies of the foreign countries, which want to work together with the Azerbaijan Republic, which have signed this contract.

This contract again demonstrates that Azerbaijan follows the road of collaboration with all companies and corporations, which are interested in our republic. Today I want to declare that since now we will follow this way, as well.

I mention the special value of the connections of friendship of the Azerbaijan Republic with the United States of America as the result of the collaboration.

As you know, the oil companies of the United States of America were the first, who showed interest to the natural resources of the Azerbaijan Republic, including oil and gas fields. Particularly, the AMOCO Company of the United States of America was the first company, which came to Azerbaijan in the early 1990s. Today I want to mention with pleasure that AMOCO and other companies of the United States of America were the initiators of beginning these works in Azerbaijan, this collaboration has already increased greatly. This collaboration is protected not only by the private companies of the USA but at the same time by the government of this country, by the President Mister Bill Clinton and by other highly ranked officials and they do their best in order to increase this collaboration henceforth.

I want to say that during my meeting and negotiations with Mr. Bill Clinton, the President of the United States of America and with Mr. Albert Gore, the Vice-President alongside with the other problems the strengthening of American-Azerbaijani economic cooperation and especially the joint exploitation of the energy resources in the Azerbaijan sector of the Caspian Sea was always in the center of our attention. As the result of all these, the Azerbaijan Chamber of Commerce in the United States of America and the Chamber of Commerce of the USA in Azerbaijan were established. Yesterday we took part in the opening ceremony of the Chamber of Commerce of the USA in Azerbaijan.

I appreciate this collaboration highly and I want to do hope that our collaboration will be widened and increased from day to another. At the same time, I want to mention that economical collaboration with other countries is very important for Azerbaijan. Once again, I note the interest of Japan located far from Azerbaijan, highly developed, and that of its powerful companies in Azerbaijan. I consider that our collaboration in this sphere can be rational and I believe in its great positive future.

I want to mention that our direct relations with the private companies, at the same time the great interest of the governments to this collaboration, act as the touch point of increasing our interstate collaborations. That is why all ceremonies of signing oil contracts, and this is the fourth one, are attended not only by the heads of the oil companies, but also high ranked government officials of these countries.

Today we have guests from the United States of America, from Japan, from other countries that came here on the ceremony of signing this oil contract. I greet all our guests sincerely and say "Welcome!" to all of them.

I greet Mr. Jan Kalitsky, the Head of the governmental delegation of the companies of the USA. A greet also Mr. Don Starcy, the president of AMOCO and Mr. Marty Miller, the vice-president of UNOCAL.

I great also Mr. Toshiro Tzunozaki, the head of the Japanese governmental delegation and Mr. Kochu Nojiman, representing the ITOCHU corporation.

I greet our dear fiend Mr. Badr al-Aybani, the president of Delta company from Saudi Arabia.

The signing of the large oil contract was met with great interest by the Azerbaijan community, by the missions of foreign countries, accredited in Azerbaijan. The guests of Azerbaijan meet it with great interest, as well. Many of them are taking part in this ceremony, they are here, in "Gulustan' palace today.

I cordially greet the Ambassadors of foreign countries in Azerbaijan, the heads of international organizations in our republic, all the guests of Azerbaijan and the members of the Azerbaijan community, who are attending this ceremony.

The signing of the fourth oil contract in Azerbaijan is a very pleasant and important event. I cordially congratulate all those who are together with us here, in "Gulustan" palace and all citizens of Azerbaijan, all our people.

Dear friends, thus, a great and intense work, connected with the exploitation "Ashrafi" and "Dan Ulduzu" oilfields has come to the end, the oil contract, which has been prepared for this purpose was presented to us. I consider that it's possible to sign it here, in this solemn ceremony. I invite the heads of the companies and the persons supposed to sign this contract to start the ceremony.

Before beginning the ceremony of signing I want to give you an information, too. There was a telephone conversation between Mister Albert Gore, the vice - president of the United States of America and me yesterday. Many problems on the relations between the United States of America and Azerbaijan were discussed. Mr. Albert Gore, the vice-president let me know that he was very pleased by the opening of the Chamber of Commerce of the USA in Azerbaijan yesterday.

Mr. Albert Gore extended his best wishes for the contract that is going to be signed here between AMOCO and UNOCAL companies of the USA and other companies with the Azerbaijan State Oil Company and sent his congratulations on this occasion. I transmit the congratulations and greetings of Mr. Albert Gore to you.

Once again I congratulate you and invite you for signing the contract. Thank you.


Ladies and gentlemen!

Dear guests, friends!

Today we are the participants of a great and historically significant event. The fourth oil contract was signed in Baku between the biggest oil companies of the world and Azerbaijan. During the preparation of the contract, we had put many efforts to this work, discussed many times whether it was needed or not. Today in the signing ceremony of the contract the speeches of the representatives of the countries-members of the consortium, their ideas, considerations and concrete figures, arguments prove that this contract is really useful, profitable.

The heads of the delegations of the United States of America, Japan, the leaders of AMOCO, UNOCAL, ITOCHU and DELTA companies said very useful words about the meaning, importance of this contract in their speeches. At the same time our guest said very pleasant words about the present Azerbaijan Republic, about its future, about the activity of our state and about the present situation in Azerbaijan.

Dear guests, I thank you for these thoughts and for your pleasant attitude. At the same time, your thoughts, considerations once again make us to believe that we can go ahead confidently by our chosen way after this, too.

Today here was signed the fourth oil contract with the big oil companies of the world for using the energy resources of Azerbaijan. We have prepared and signed four contracts in the course of the two years. I consider that it is a great success.

It is clear that, these contracts are very valuable documents for the strengthening of the independence of the Azerbaijan Republic and for the improving the people's living standard. These contracts are the big portion of our long-lasting program in the Social-economical sphere for coming years. Many changes took place in the economical life of Azerbaijan during last two years, since the signing of the first contract up to now. I believe that in future as the result of putting these contracts into life, positive changes will increase day by day, and these contracts will positively influence the economy of Azerbaijan year after year.

These contracts are significant for us today both economically and spiritually. But they are more significant for the future of Azerbaijan. The period of validity of these treaties are 25-30-40 years. Thus, we work not only for our present day, but for the prosperity of future generations as well, we create a solid foundation for it. At the same time these contracts are the components of thorough economical reforms conducted in Azerbaijan, they are very valuable steps in the taking of our economy towards the market economy, increasing it up to the levels of the developed world countries.

These contracts are the big portion of building a democratic, legal, civil state in Azerbaijan, our economical strategy. These contracts enable Azerbaijan to get connected with the world economy and I consider that putting them into life will force to strengthen these relations.

You know that the preparing and signing of these contracts were put into practice in a very hard situation. Despite the fact that the community of Azerbaijan with a pleasure, with pride, accepted these contracts, however, our county faces obstacles of some forces in the process of realization of these projects. Our courageous steps sometimes are met with jealousy outside of Azerbaijan, with a negative attitude.

But none of them could disturb our will. We believe in the appropriateness of the way that we have taken. That's why we continue to follow this way fearlessly, confidently.

I declare with pleasure that in their speeches today our guests mentioned specially the social-political stability created inside Azerbaijan Republic. It is truth. At the same time, it is the main condition for taking such big economical steps, for the joint activity of foreign companies in Azerbaijan. Achieving the social-political stability in Azerbaijan, conducting valuable changes in the economy of the country, leading across economical reforms have completely changed the image of our republic and increased the interest of foreign countries to Azerbaijan, their will of joint working.

As the result of all abovementioned, we have achieved many successes in the economical sphere of Azerbaijan, obtained opportunities of signing contracts and created a nice foundation for taking such steps in future.

Azerbaijan is very rich with energy resources and we have great possibilities for their joint exploitation in future, too. We have got very important, interesting plans in this sphere. I hope that we shall put into practice these plans in forthcoming years, too. There are great plans for the collaboration with foreign companies in other fields of Azerbaijan economy, too. I consider that in the course of the coming years we will manage to use efficiently those opportunities, too.

In short, we are in the new period of Azerbaijan's future progress. The name of the signed contract, i.e. that of the oilfield "Dan Ulduzu" - the Morning Star. The Morning Star is very bright, I hope that the contract of "Dan Ulduzu" oilfield will give a strong and bright light for the future works Azerbaijan.

I congratulate you once again. I hope that the contract, which we have signed today, will be put into practice immediately and we will see its positive results. We are preparing results that are even more positive for the future generations.

I thank all of you for attending today's ceremony. May the contract be successful! I believe that it will be successful. I hope that we will gather for signing new contracts in forthcoming years.
Thank you.