GENERAL CONCEPT OF HEYDAR ALIYEV'S OIL STRATEGY
Azerbaijan has been implementing the new oil strategy since 1994,
and the major principles of these strategies imply the effective
utilization of the rich natural resources of Azerbaijan including oil,
and gas resources.
Heydar Aliyev
Following the elections of the national leader of the Azerbaijani people, Heydar Aliyev as the leader of Azerbaijan in 1969 deep changes occurred in the socio-economic as well as other spheres of life. Beginning from 1969 the national economy of Azerbaijan was characterized by the dynamic growth of the oil and gas industry. At that period a new stage started in the history of Azeri oil and gas industry development.
A magnificent ceremony was held in Azerbaijan with the participation of the great leader Heydar Aliyev to celebrate the production of 1 billion tons of oil in 1971. As the result of the great policy conducted by President Heydar Aliyev Azerbaijan was supplied with 400 of 75 types of crane vessels, load-lifting boats, seismic, passenger, and other boats in the 1970-1980s. The receipt of Azerbaijan crane with the capacity of 2500 tons, Khazar type tin-up and later the Shelf type allowing working in the depth of 200 meters promoted the discovery of new rich deep-sea oil and gas fields. As the result, 8 new oil and gas fields were discovered and the oil reserves expanded by 2 and gas reserves by 3 in the late 1960s. The total volume of oil and gas production reached 27.1 million tons (of standard fuel) in 1975. The number of drilling plants rose up to 11 in the 1980s and as the result of their operation, a new field rich in oil was discovered at the depth of 80-350 meters in the Caspian Azeri sector (Guneshli, Chirag, Azeri, and others).
A special program for oil processing in Azerbaijan was developed and implemented by the initiative and under the coordination of the prominent politician Heydar Aliyev. The new plants equipped with modern technique and technology were established and new installations were established in accordance with the said program. At the same time, the reconstruction of the oil refineries was initiated. With the implementation of the stages of the reconstruction plan of the oil refining industry in Azerbaijan, the changes occurring in the said sphere deepened and expanded. Thus, the construction of ELVOU-AVT-6 plant in 1976, Catalytic Reforming in 1980, Oil coxing in 1986, and Catalytic Cracking in 1993, other works he carried out during the Soviet times and the strong foundation he created promoted the formation of oil industry corresponding to the world standards in independent Azerbaijan.
The allotment of USD 450 million in the Soviet Union for the construction of the unrivaled Plant of Deep Sea Basis of Azerbaijan, the receipt of license from Moscow for the construction of the plant in Astrakhan was the result of the wise policy of Heydar Aliyev. The construction of the plant was initiated in 1978 and it was commissioned in 1989.
All these facts were due to the wise and farsighted policy of Heydar Aliyev. He realized perfectly that all the conducted works would serve the economic independence of Azerbaijan that would gain independence in the future. History proves the correctness of Heydar Aliyev's considerations.
Azerbaijan faced a number of problems after gaining independence in the early 1990s. The cut off of the economic relations between the former USSR and Azerbaijan, the instability established in the country, the lack of financial and technical provisions caused a deep crisis in the oil and gas industry. All those difficulties, as well as technical, financial, and other problems, hindered the development of such discovered fields as Azeri, Chirag, Guneshli. In such conditions, Heydar Aliyev who returned to Azerbaijan at the request of the people stood with the slogan "Oil is the national wealth of Azerbaijan" and engaged in the development and restoration of the country's oil industry. It was necessary to choose between two variants for the settlement of the hard situation established in the oil industry and the development of hydrocarbon reserves of the country: either to wait for the improvement of the financial and economic state of the country for 15-20 years or to attract foreign oil companies to the country. The national leader of the Azerbaijani people decided on attracting large oil companies to Azerbaijan and a new oil strategy was developed in a short period of time. The negotiations with the foreign companies on the development of Azeri-Chirag-Guneshli fields were initiated by the decree of the President of Azerbaijan at that time. Heydar Aliyev who averted the disaster in the country initiated measures for the economic development of the country. Ilham Aliyev, the vice president of the SOCAR, was involved in the process of negotiations from the very beginning and was the most active participant in the successfully conducted process. The Production Sharing Agreement -the Contract of the Century on the development of Azeri-Chirag-Guneshli fields (deepwater Guneshli) was signed with 11 famous oil companies from 7 countries of the world on September 20, 1994.
The successful implementation of Heydar Aliyev's new oil strategy for over ten years from the signing of the contract of the century turned into the actual theme in our country. Considering all that it is possible to single out the following implemented directions of the new oil strategy:
1. The ensuring of Azerbaijan's access to the global markets of energy sources through the attraction of international oil companies, foreign business circles, large investments to oil and gas projects;
On the whole 32 oil contracts have been concluded with the foreign oil companies in frames of the Contract of the Century. These contracts stipulated for the investment of nearly USD 60 billion in the oil and gas industry of Azerbaijan is the real guarantee of the future development of our country.
2. The establishment of an export pipeline to ensure the express and free access of hydrocarbon reserves to the world markets;
Currently produced oil and gas are transported to the global markets through several routes. These are the Baku-Novorossiysk, Baku-Supsa, Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum pipelines. Additionally, based on the Southern Gas Corridor project, TANAP is another transportation route. The construction of the TAP pipeline, which is part of the Southern Gas Corridor project, is underway currently.
Despite both negative and positive features of the Baku-Novorossiysk and Baku-Supsa pipelines, the national leader of the Azerbaijani people H. Aliyev carried out wise decisions that confirmed the necessity of the establishment of both oil pipelines. The implementation of the initial oil project created conditions for the intensification of the operations on Azeri, Chirag, and Guneshli pipelines and the attraction of new investments for the development of hydrocarbon resources of Azerbaijan.
Presidents of the USA, Turkey, Azerbaijan, Georgia, Kazakhstan, and Turkmenistan signed an intergovernmental agreement on the establishment of the head export pipeline Baku-Tbilisi-Ceyhan at the OSCE summit in Istanbul in November of 1999.
The foundation stone of the Baku-Tbilisi-Ceyhan pipeline was laid with the participation of the national leader of Azerbaijan Heydar Aliyev, Turkey, and Georgia at Sangachal terminal in Baku on September 18, 2002, and its construction was initiated. The opening of the oil pipeline took place on May 28, 2006.
The selection of the Baku-Tbilisi-Ceyhan route for the transportation of Azerbaijan's energy resources is a luxury of the great policy of our national leader Heydar Aliyev, and this pipeline has entered the system of oil pipelines as a world "artery".
3. The accumulation and the increase of incomes from oil for the future generations, their utilization for the present generation considering the social needs of the country, economic prosperity and development requirements;
According to this, National leader Heydar Aliyev signed a decree on the establishment of the State oil fund of the country on December 29, 1999. Currently, the amount of the assets of the State Oil Fund is $ 35,806.5 million. (1 January 2018)
4. The import of the modern technique and technology of the West was one of the achievements in the implementation of the new oil strategy established by the national leader of Azerbaijan Heydar Aliyev;
The new technology and equipment used in the development, drilling, and operation of the fields have a positive impact on the oil industry. The construction of a giant offshore plant allowing the drilling of 48 wells in the Central Azeri is completed. Sangachal terminal is one of the largest terminals in the world that started its operation and high infrastructure was created.
To date the oil strategy worked out by Heydar Aliyev symbolizes that Azerbaijani people are the owners of their wealth, that the economics of our country has integrated into the global economy, that our country survived the political, economic, and social crisis that occurred in the early 1990s and that the developed, strong and democratic state of Azerbaijan was established at the beginning of the 21st century.