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Azerbaijani President: "Southern Gas Corridor is a project of energy security"

14 February 2015 00:52 (UTC +04:00)

President Ilham Aliyev stressed that this meeting took place at the appropriate time – the year of practical implementation of the Southern Gas Corridor. “This project unites us and there is a need for additional coordination and exchange of views,” said President Ilham Aliyev

The Head of the State noted that Azerbaijan is known as the first state producing oil: “Azerbaijan is known as the world's first oil-producing country. It happened in the middle of the XIX century. At the same time Azerbaijan is the first country producing oil in the sea in the middle of the 20th century. For this reason, the history of the oil industry of Azerbaijan is very rich. I would also note that the oil produced in Azerbaijan during the Second World War, was 80 percent of the oil produced in the Soviet Union. Azerbaijani oil workers made a great contribution to the victory over fascism. Perhaps, if there was not the Azerbaijani oil, the results of the Second World War would be different.

However, during the collapse of the Soviet Union, the situation in the oil industry was not good. Deposits on land were mostly exhausted. In 1991, when Azerbaijan regained its independence, the oil industry was in crisis. We were faced not only with the crisis in the oil industry, but also with a serious military, political and economic crisis in general. There was a civil war, the Armenian occupation. We had neither the financial resources nor the technical capacity to absorb the huge oil fields.

Only after Heydar Aliyev’s election as a president in 1993 the situation stabilized, the civil war ended, we began to reform. One of the important elements of the reforms was to open Azerbaijan to the world. We began to attract foreign investments and created an excellent investment environment. Due to this fact the current economy of Azerbaijan is steady and stable. In terms of direct foreign investment per capita, Azerbaijan occupies a leading position in the former Soviet Union.

President Ilham Aliyev said that 1994 was the year of the beginning of a new energy strategy of Azerbaijan: “A contract was signed between our government and a consortium of major oil companies in the world. The contract was signed in 1994 and immediately called the "Contract of the Century." This was due to the fact that the "Azeri-Chirag-Gunashli”, in terms of investment and resources, is one of the world's largest oil fields. For more than twenty years, this field is being developed and is considered the mainstay of oil in our country. Therefore, 1994 was the year of the beginning of the energy strategy. Thus, the Caspian Sea was first announced open to foreign investment.

However, taking into account that Azerbaijan is a country that does not have access to the open sea, we needed a network of pipelines to transport oil. Coordinated efforts based on regional cooperation between Azerbaijan, Georgia and Turkey, clearly led modern system of pipelines to transport oil and gas to international markets in the first phase.

The Head of the State emphasized that "Southern Gas Corridor" is based on the work carried out together with our partners in Azerbaijan for the past 20 years: “In 1996, Azerbaijan and bp-led consortium of foreign companies signed an agreement on the "Shah Deniz" field. Gas field "Shah Deniz" is an essential resource base for the Southern Gas Corridor. In 1997, the first oil was produced at the platform "Chirag". It may have been a record in the history of the oil industry. That is the difference in time between the signing of the contract and the first oil was only three years. In 1999 the Baku-Supsa pipeline, connecting the Caspian Sea with the Black, was laid. Thus, the Azerbaijani oil has been transported to the Georgian port of Supsa on the Black Sea. This was an important element of diversification. For the first time the Black and Caspian Seas were connected pipelines transporting crude oil. In 2006 Baku-Tbilisi-Ceyhan pipeline was commissioned. For the first time the Caspian Sea and the Mediterranean sea were connected by pipelines. The South Caucasus gas pipeline connecting Baku, Tbilisi and the Turkish city of Erzurum was constructed in 2007,

All these important steps were of great importance in the implementation of the energy policy of Azerbaijan. We, together with our partners from Georgia and Turkey met all the challenges facing us and goals. It was simultaneously wonderful example of fruitful regional cooperation. In this case, the three countries that support each other and cooperate with each other, have very ambitious goals. However, I must say, this was only the beginning of our plans, as giant field "Shah Deniz" and other gas fields of Azerbaijan dictate the need for laying the Southern Gas Corridor to transport natural gas from Azerbaijan to the international market. There are also important stages in this project. European Commission President Barroso and me signed a Joint Declaration on the Southern Gas Corridor in 2011. In this document Azerbaijan is listed as a country which makes a major contribution to the Southern Gas Corridor and realizing it. In 2012, Azerbaijan and Turkey signed an agreement for the construction of Trans-Anatolian gas pipeline - TANAP. This agreement has played an important role in the implementation of the Southern Gas Corridor. You probably know that the practical implementation of the project TANAP has already begun. In 2013, the Trans-Adriatic Pipeline was selected as the main export route to Europe, and on September 20, 2014, the ceremony of laying the foundation of the Southern Gas Corridor was held in Baku. It was exactly 20 years after signing the "Contract of the Century." It was a brief history of the work done. So I want to say again that without those important elements that have been created in Azerbaijan and in the neighborhood, today the project "Southern Gas Corridor" would sound just like a good idea or desire. Today, this project is already a project under implementation. "

President Ilham Aliyev noted that the partnership between the State Oil Company and bp played a crucial role in the implementation of oil and gas projects: "This partnership continues for 20 years, will continue in the coming years. I will say again that the resource base for the Southern Gas Corridor is a field "Shah Deniz", which is operated by bp. Other huge gas deposits, except of "Shah Deniz", by the way, according to our calculations the proven gas reserves in Azerbaijan exceed 2.5 trillion cubic meters, "Absheron", "Umid" and other fields uniquely contribute to the project "Southern Gas Corridor". Most likely, we will have the production and export, which would exceed the forecasted figures today. "

The President stressed that an important element of cooperation is coordination of joint efforts: "I think that today’s meeting of the Advisory Council will pursue this goal. But in this project coordination and effective communication between all the participating countries and companies will be one of the basic, initial conditions for success. We have to work the way it was before, like the trilateral cooperation between Georgia, Turkey and Azerbaijan. That trilateral cooperation and mutual trust, high-level support contributed to the implementation of the project, that I have already spoken. But now the situation is more complicated. Since there are more participants and parties. Therefore, we need to trust at the highest level, and we should support each other. We all have to contribute to the implementation of the project in order to realize it in time. "

President Ilham Aliyev stressed that the Southern Gas Corridor is a project of energy security: "This is energy security for us. Since Azerbaijan will be able to export a large volume of natural gas to international markets. It is also energy security for the consumer and transit countries. Because today's energy security can not be considered separately from the national security of any country. Energy can not always be a source of prosperity, stability, sometimes it turns into a source of competition and hostility. I think energy must contribute to the stability, forecasting, cooperation and mutual support and this is our philosophy. I am sure that a winning situation for producing, transit and consumer countries, the balance of interests between the three components of the project will be the main reason for the success of our project. Diversification of energy resources is now a subject of discussions at the main arena of international organizations. Azerbaijan plays a role in diversification. Speaking of diversification, we mean not only the diversification of routes but also diversification of sources. Diversification of routes is important, but when the source is the same, the situation is not changed very much. Diversification of sources is important. In this case, the gas produced in the Caspian Sea - Azerbaijan's gas will be the only new source of gas for European consumers in the next few years. "

In conclusion, the President expressed confidence that all the issues identified for the implementation of the project will be resolved: "The project will be implemented in a timely manner, and we all will celebrate the implementation of the Southern Gas Corridor. But to achieve this, coordination, mutual trust and close relationship between all the countries involved in the process are required. "