ANNIVERSARY GIFT

20 September 1994. Baku, Gulistan Palace. President Heydar Aliyev and the heads of 12 major oil companies representing 8 countries signed a document on the joint development of three oil fields - Azari [Azeri], Ciraq [Chirag] and Gunasli [Guneshli] in the Azerbaijani sector of the Caspian Sea. The agreement, almost fantastic for Azerbaijan, which had only just signed a truce, was shaken by domestic political feuds and was almost in full economic collapse, was immediately named the "Contract of the Century". Its real prospects and the benefit it would bring the country seemed distant and vague. So begins a new stage in the oil history of Azerbaijan...

20 September 2014. Baku, Heydar Aliyev Centre. The solemn ceremony dedicated to the 20th anniversary of the "Contract of the Century" and the laying of the foundation of the Southern Gas Corridor. President Ilham Aliyev takes the floor: "With the signing of the 'Contract of the Century', a process of international cooperation in the Caspian Sea began for the first time in history. The general economic and political development of our country began with the "Contract of the Century". After the ceremony, President Aliyev and several heads of state and government head for the Sanqacal terminal, where they leave symbolic handprints on special pieces and signatures on the first pipe that will be placed in the foundation of the Southern Gas Corridor. So begins a new stage in the history of gas in Azerbaijan... 

The day when history is made

A lot has been written, studied and told about how momentous and successful the "Contract of the Century" was for Azerbaijan. However, words are unnecessary - the political, economic and social achievements of the country in such a short period of time are obvious. "In the last 10 years, Azerbaijan's economy has been the fastest growing globally. During this period, GDP grew by more than 3 times and budget spending - by 20 times. The external public debt accounts for only 8 per cent of GDP, unemployment fell to 5 per cent, while poverty is slightly more than 5 per cent," President Ilham Aliyev said in his speech. At the same time, receiving huge financial profits from the sale of oil and gas resources, Azerbaijan was able to avoid the "Dutch disease" and secure a breakthrough in the non-oil sector of the economy.

At the same time, the dividends received were also directed at the development of our own oil business, and today SOCAR is successfully represented in a number of countries, develops fields with its own finances and acts as an equal partner in major projects.

Thus, beginning the implementation of the oil strategy of Azerbaijan, the "Contract of the Century" opened the way for the full development of the country in all fields. "This historic event was the first major Western investment in the former Soviet Union," US Secretary of State John Kerry said in his message. The special representative of the US Department for International Energy Affairs, Amos Hochstein, recalled that 20 years ago no one believed that the Baku-Tbilisi-Ceyhan pipeline could be implemented. In the past 10 years there was also some scepticism associated with the Southern Gas Corridor. "But today we also know that sceptics never achieve anything. Thanks to the will of the Azerbaijani people and the efforts of the partners in the United States, Turkey and Europe, we beat the sceptics and are already starting to implement a project that is important in terms of the energy security of Europe. Our cooperation with Azerbaijan is very close and will be even stronger with new projects," he stressed. 

The image of a reliable partner enabled the country to initiate new large regional projects in a short period of time, the most important of which were the development of the Sah Daniz [Shah Deniz] gas field and the construction of the Baku-Supsa, Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum pipelines and the Baku-Tbilisi-Kars railway. Thus, Azerbaijan consistently turned from an oil and gas producing state into one of the main alternative sources of gas supplies to Europe and the main author of the Southern Gas Corridor, which includes the construction of the Trans-Anatolian (TANAP) and the Trans-Adriatic Pipelines (TAP). Some 45bn dollars will be invested in these projects. "Today, all horizons are open to us and all ways are clear. We just need to work together to ensure the completion of the Southern Gas Corridor, and we will do it. This project will bring additional dividends to Azerbaijan. The country's economy will grow even faster," Ilham Aliyev said.

Window to Europe

Today, Azerbaijan is one of the main players on the energy map of Europe. "Azerbaijan has never been so close to the European Union. Its economy is closely integrated with the European markets, our ties are wider, and contacts are active. The European Union supports all the initiatives of Azerbaijan related to reform and modernization and wants a more profound relationship in various fields," President of the European Commission Jose Manuel Barroso noted in his video shown at the ceremony. "Three years ago, in January 2011, I and President Ilham Aliyev signed a Joint Declaration relating to the Southern Gas Corridor in Baku. However, this project is not just a pipeline, but also an important strategic energy corridor of the 21st century. It is a geo-strategic project in every sense of the word."

This idea was fully supported by European leaders who arrived at the celebrations. For example, the president of the Republic of Bulgaria, Rosen Plevneliev, rightly said that the crisis in Ukraine demonstrated once again how Europe depends on gas. "The Southern Gas Corridor will end the dependence that we have experienced over the years. It will liberate our region and even wider space - Europe - from dependence," he added. According to the Bulgarian president, the Turkey-Bulgaria and Greece-Bulgaria connecting pipelines will also be a significant part of the Southern Gas Corridor. This will provide Bulgaria, Romania, Serbia and other countries with gas. These connecting pipelines will serve to expand the natural gas storage facilities in Bulgaria and turn the country into a kind of a gas hub for the region in the future.

Greek Prime Minister Antonis Samaras also said that although the country is going through difficult times, everything will be done to make sure that this project is implemented in a timely and efficient manner. "We have signed an evaluation document associated with possible damage to the environment. Thus, we will begin the process of construction. This is a priority theme for my government," he added.

"There cannot be a project of greater symbolic importance than this one. Both entrepreneurs and other participants will benefit here. This partnership recognizes no boundaries, and I am sure that this project will become a great example of such cooperation. We are building not only a pipeline. We are building bridges. These bridges connect peoples and countries. It is really a global view, and it is already becoming a reality," Samaras concluded.

The Southern Gas Corridor project is equally important for Albania, because, as Albanian Energy Minister Damian Gjiknuri said, the possibilities of importing gas into Albania were extremely limited previously. "I think it will be a huge contribution both in terms of economic development and in terms of security. We thank friendly Azerbaijan and SOCAR for creating such opportunities for Albania," the minister said.

"Today we celebrate not only the 20th anniversary of Azari-Ciraq-Gunasli, but also the 20th anniversary of strong British-Azerbaijani relations, and this project was at the forefront of our cooperation," British Minister of State for Trade and Investment Lord Livingston stated for his part. According to him, BP, the operator of Azari-Ciraq-Gunasli, created jointly with SOCAR one of the world's largest oil complexes in the sea and the biggest enterprise contributing to the economy of Azerbaijan. "As John Paul Getty said, the three factors contributing to success are: rise early, work late, and strike oil. The same can be said about the success of Azerbaijan. But here it is important to add the factor of wise leadership. Great Britain is proud to be an integral part of that success," the minister said.

The message from the Prime Minister of the Kingdom of Norway Erna Solberg also emphasized how reliable the partnership between Azerbaijan and Statoil was: "After 20 years, Norway and Azerbaijan have become closer partners in the energy sector. This yielded a big profit to both Norway and Azerbaijan, and our relevant companies also benefited from it. I hope that our relations will continue in the future."

Good luck!

Meanwhile, Georgia and Turkey can truly be considered the very first, and perhaps the strongest partner countries of Azerbaijan in these projects. It is thanks to good-neighbourly relations with these countries that it proved possible to initiate and implement major transit projects as part of which hydrocarbons are delivered from Azerbaijan to world markets. Yes, the financial and economic benefit of the implementation of these projects for those countries is evident, as was noted in the speeches of their representatives at the ceremony in Baku. For example, Georgian Prime Minister Irakli Garibashvili acknowledged that Azerbaijan is one of the closest friends and partners of Georgia. "These are very important projects for us. But they are only a small part of the huge potential of the Eurasian region in the field of energy. We therefore support the Trans-Caspian pipeline project so that natural gas resources from Kazakhstan and Turkmenistan can be transported to Europe."

Turkish Minister of Energy and Natural Resources Taner Yildiz also noted that the Caucasus was connected to Anatolia through the Baku-Tbilisi-Erzurum project. And the Southern Gas Corridor project and its backbone - the TANAP project - connect Europe to the Caucasus, opening a sort of peace corridor. "These projects will bring peace and stability not only to the region but at the same time, to a wider geographical area. If only every country manages to realize the value of these projects and join our good intentions. We hope that in subsequent stages the pipeline will be connected to a variety of additional sources. We believe that the TANAP project, which we do not regard only as a trading investment, is a tool that will create long-term strong, healthy and natural relations with European countries like between Turkey and Azerbaijan," he said.

In short, as was noted before, there is not only and not so much economic, but also political significance of the major regional projects initiated by Azerbaijan. They strengthen the country's position in the international arena, provide a basis for continuing the course of economic growth and development and become a solid foundation for future success. "We have extended the term of the agreement on sharing production from the Sah Daniz field until 2048. It's really a long period of time. But 2048 will mark the 200th anniversary of the day when the world's first oil well was drilled in Azerbaijan. Events follow each other day by day, year by year. However, major projects, grandiose technologies, highly skilled and assertive people remain," BP CEO Robert Dudley said in his speech.

Thus, a new era is beginning in the history of oil and gas in Azerbaijan. There are old and new partners near us. And together, according to President Ilham Aliyev, they form a new international team in the oil and gas industry today: "I am confident that our joint work will be successful, and our team will achieve victory. Good luck!"

AT FIRST HAND

"Today, all horizons are open to us and all ways are clear. We just need to work together to ensure the completion of the Southern Gas Corridor, and we will do it. This project will bring additional dividends to Azerbaijan. The country's economy will grow even faster."

Ilham Aliyev, President of Azerbaijan

"This project is not just a pipeline, but also an important strategic energy corridor of the 21st century. It will be a geo-strategic project in every sense of the word."

Jose Manuel Barroso, President of the European Commission

"The Southern Gas Corridor will end the dependence that we have experienced over the years. It will liberate our region and even wider space - Europe - from dependence." 

Rosen Plevneliev, President of Bulgaria

"We are building not only the pipeline. We are building bridges. These bridges connect people and countries. It is really a global view, and it is already becoming a reality." 

Antonis Samaras, Prime Minister of Greece

"As John Paul Getty said, the three factors contributing to success are: rise early, work late, and strike oil. The same can be said about the success of Azerbaijan. But here it is important to add the factor of wise leadership. Great Britain is proud to be an integral part of that success." 

Lord Livingston, British Minister of State for Trade and Investment

"We have extended the term of the agreement on production sharing from the Sah Daniz field until 2048. It's really a long period of time. But 2048 will mark the 200th anniversary of the day when the world's first oil well was drilled in Azerbaijan." 

Robert Dudley, BP CEO