Baku – APA-Economics. Today, Azerbaijan celebrates the 20th anniversary of the “Contract of the Century”. On the initiative of Heydar Aliyev, on September 20, 1994, this international contract was signed.
“Contract of the Century” considers joint development of deep-water part of Azeri-Chirag-Gunashli oil field. By the order of Heydar Aliyev, September 20 is marked as a Day of Oil Workers in Azerbaijan since 2001.
Primarily, the contract was signed by 8 countries (Azerbaijan, US, Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) and 13 companies («Amoko», BP, «McDermott», «Unocal», SOCAR, «LUKoil», «Statoil», «Exxon», TPAO, «Penzoil», «Itochu», «Ramko», «Delta»). Thereafter, as a result of the changes among participants, BP (34,14%), «Chevron» (10,28%), SOCAR (10,00%), «Inpex» (10,00%), «Statoil» (8,56%), «Exxonmobil» (8,00%), TPAO (6,75%), «Devon Energy» (5,63%), «Itochu» (3,92%), «Hess» (2,72%) have also joined the contract.
ACG participants are BP (operator – 35.8%), SOCAR (11.6%), Chevron (11.3%), Inpex (11%), Statoil (8.6%), ExxonMobile (8%), TPAO (6.8%), Itochu (4.3%), ONGC Videsh Limited (OVL) (2.7%).
3 years later after the signing of “Contract of the Century”, on November 12, 1997, first oil was extracted. For the export of the first oil, Baku-Novorossiysk pipeline was launched since October 25, 1997.
Georgian Supsa port in the Black Sea was selected as the second direction for oil transportation. Since April 17, 1999, Azeri oil started to be transported via Baku-Supsa pipe. The biggest advantage of this route – Azerbaijani oil was approached a world market in a clean form – as Azeri Light.
Taking the plans on reaching oil production up to 45-50 mln tons, as well as perspective of transportation of oil reserves of Kazakhstan and Turkmenistan via Azerbaijan into account, the idea on realization of Main Export Pipeline was kicked off. And in September of 2002, the presidents of Azerbaijan, Turkey and Georgia held groundbreaking ceremony for Baku-Tbilisi-Ceyhan pipeline, which was designed for transportation of Azeri oil to Ceyhan port in the Mediterranean Sea, with the length of 1,769 km and yearly capacity of 50 mln tonnes. Construction began in April 2003 and was completed in 2005. Pumping began on 10 May 2005 and reached Ceyhan in 28 May 2006.
Shareholders of the BTC are - BP (30.1%), «AzBTC» (25.00%), «Chevron» (8.90%), «Statoil» (8.71%), TPAO (6.53%), «ENÄ°» (5,00%), «Total» (5.00%), «Itochu» (3.40%), «Inpex» (2.50%), «ConokoPhillips» (2.50%) and «Hess» (2.36%).
Currently, mainly Azeri-Chirag-Gunashli oil and Shahdeniz condensate is transported via BTJ from Azerbaijan. Moreover, Turkmenistan oil is transported via this pipeline too.
Oil strategy revealed gas potential of Azerbaijan as well. The development of Shahdeniz deposit became Azerbaijan into big gas exporter. Shareholders of Shahdeniz are - BP (operator – 28.8%), ARDNÅž (16.7%), «Statoil» (15.5%), «Total» (10%), «LUKoil» (10%), NICO (10%), and TPAO (9%).
South Caucasus Pipeline (Baku-Tbilisi-Erzurum) project has been realized for the transportation of gas to Georgia, Turkey and Europe. The pipe, constructed in 2004-2006, allows transporting Azerbaijani gas to Turkey and South European countries. Shareholders of the project are - BP (technical operator -28.8%), SOCAR (16.7%), «Statoil» (commercial operator – 15.5%), «Total» (10%), «LUKoil» (10%), NICO (10%), and TPAO (9%). Total agreed to sell its 10%-share in Shahdeniz to TPAO. Currently, both companies are going to complete this operation.
In general, the “Contract of the Century” opened the way for agreements on other oil and gas fields of Azerbaijan. Thus, about $ 40 billion were invested in oil and gas sector of Azerbaijan in 1994-2010 years. During this period, 32 agreements on production sharing were signed foreign oil companies. It is forecasted that within the framework of these agreements, the volume of investments will reach $ 60 billion. Currently, 34 companies representing 15 countries are operating in oil and gas operations on land and in 30 fields located in the Azerbaijan sector of the Caspian Sea.
The development of oil sector, the growth potential of SOCAR allowed Azerbaijan to carry out exploration and drilling operations in the fields. During recent years, as a result of these works, two major gas-condensate fields were discovered only in the Azerbaijani sector of the Caspian Sea. Hydrocarbon reserves of “Umid” are estimated at 200 billion cubic meters of gas and 30-40 million tons of condensate, and “Absheron” - 350 billion cubic meters of gas and 45 million tons of condensate. Strong results are forecasted to get on “Nakhchivan”, “Babak”, “Shafag-Asiman” projects.
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