Winter 1997 (5.4)
Journey into the Future
on the Way
Aliyev, VP of SOCAR, at Harvard a few days after his presentation
in Washington, D.C., at the Caspian Pipelines conference (November
Vice President of the State Oil Company of Azerbaijan (SOCAR),
gave the following speech as the keynote luncheon address at
the Caspian Pipelines Conference on November 19, 1997, in Washington,
D.C. This conference was sponsored by Cambridge Energy Research
Associates (CERA), the U.S.-Russian Business Council and the
U.S.-Azerbaijan Chamber of Commerce (USACC).
Ladies and gentlemen, even though our conference is still in
session, I think that we can already talk about some preliminary
results. First of all, I think this conference has been a great
success so far, and will contribute to a greater understanding
of the issues and problems of the region. Not only have we had
the chance to listen to various positions, but I think we have
made substantial progress towards regional cooperation in regard
to the future pipeline development in the Caspian. Unfortunately,
in the past, countries in the region have conducted their activities
independently of each other, and this has caused many difficulties.
can manage to unite our efforts, we will definitely achieve greater
results in the future. But one thing we should all understand
is that regional cooperation must be based on realistic principles.
I want to draw
your attention to some aspects that we should keep in mind. For
example, one cannot promote regional cooperation and, at the
same time, escalate tensions over the so-called "disputed
oil fields." In other words, one cannot criticize Azerbaijan's
rights to develop its own oil fields, insisting that legal issues
of the Caspian Sea have not yet been resolved, while seeking
permission at the same time from the Azerbaijan government to
participate in developing these same fields.
Secondly, one cannot be regarded as a reliable partner in regional
cooperation and, at the same time, continue a policy of military
occupation of a significant part of Azerbaijan's territory, leaving
1 million refugees homeless, destroying hundreds of our cities
and villages and carrying out a policy of vandalism on our territories.
This is not a realistic approach.
train has started on its journey into the future. We are with
our friends on this train. Some have already missed it which
will make it very difficult for them to catch up and join us.
Many ideas and proposals have been initiated in the past in regard
to the best route for the pipelines from Azerbaijan. I acknowledge
these various proposals set forth, but you must remember, this
is Azerbaijan's oil; that is, oil which belongs to the people
of Azerbaijan. Therefore, the best transportation route will
be the route which is best for Azerbaijan.
It is symbolic that representatives from the Caspian Sea countries
have gathered here in the United States, many miles away from
our homes. It shows the growing interest of the U.S. in the Caspian
region as a whole and in the issue of Caspian pipeline facilities.
Of course, the efforts by the U.S. administration to provide
peace, security and foster mutually beneficial cooperation in
the region will be very much appreciated. We hope that this attitude
will continue in the future and bring positive results.
US Law 907 Against
there are some issues which concern us. One is Section 907 [of
the Freedom Support Act] which forbids the U.S. government from
giving any direct assistance to the Azerbaijani government. Every
time officials in the White House ban U.S. governmental aid to
Azerbaijan, it not only affects Azerbaijan, but it also affects
the U.S. companies and investors who are eager to work with us.
Countries are like people, and they can adjust themselves to
the situation in which they find themselves. For example, Azerbaijan
has been living with Section 907 since 1992, and Azerbaijan can
continue to live with restrictions from Section 907 for many
more years. We have adjusted ourselves to that possibility. But,
repeal of this legislature would make our lives easier, and would
symbolize closer cooperation and understanding, not only to the
needs of Azerbaijan but to the significance of Azerbaijan to
the entire region.
When I spoke at the U.S.-Azerbaijan Chamber of Commerce (USACC)
conference here in Washington last February , I mentioned
that we would very soon see the first oil flowing from the Chirag-1
platform. That has just happened [November 12, 1997], and Azerbaijan
is now waiting for the transportation of its oil to the world
market. I am happy to say that these goals are being achieved.
I hope that on my next visit, I can confirm other successes which
we can celebrate together.
Azerbaijan is a country where many companies from various countries
work together with us, especially in oil production. This alone
is evidence that Azerbaijan is not only ready for business, but
also ready for friendship. We are a newly independent country
but with very old and very rich traditions. I invite all of you
to visit my country and to get to know, not only our oil experts,
but our poets, our musicians, our culture and our people. Thank
Question & Answer
Stacey, recently retired president of Amoco Eurasia, coordinated
the Question & Answer session. While written questions were
being gathered from the audience, Stacey initiated the first
Who will make the final decision regarding the main export
You know the answer better than I do (Ilham chuckles).
[Stacey] What Ilham is saying is that the investors are going
to be making that decision.
SOCAR has had excellent relations with the two Iranian Companies-National
Iranian Oil Company (NIOC) and Oil Industries Engineering and
Construction (OIEC)-over the years. How do you see future cooperation
between SOCAR and these Iranian companies?
Well, we are working together with Iranian companies on two
projects-Shah Daniz and Lankaran-Talysh. Our cooperation has
been successful. We are very satisfied with the job they are
doing. They have the same rights as other members of their consortiums.
They enjoy the same privileges as any other giant corporation
or foreign investor, which means they look forward to their revenues.
I'm very happy that our relations are based on a business-like
approach, with mutual respect and understanding.
In Houston last February , you mentioned that SOCAR
was interested in increasing foreign company involvement onshore.
Is that still SOCAR's intent? And if so, what steps are being
taken to finalize any agreements with foreign companies for onshore
In regard to offshore projects, we don't need more proposals,
as we are now in the very fortunate position of choosing among
[competing] companies who want to sign contracts with us. That
puts us in a very difficult situation because we respect all
of these companies and have very good relations with all of them.
But onshore fields are a concern because for many, many years
these fields have not always been developed in the most efficient
way. There is still very great potential in this area. We want
to attract large companies to come work with us onshore. Unfortunately,
up until now we have received proposals from only small and middle-sized
companies. This past year there has been some movement in that
direction, and we have received several proposals from large
American oil companies interested in our onshore fields. We are
now in the process of negotiation, and I think as soon as we
sign our first onshore production agreement, other companies
will be eager to join this process.
Yesterday, one of the speakers said that Russia is taking
a pro-Azerbaijani position in the Caspian oil business. Do you
think this is true? How do you see Russian influence in Azerbaijan?
Well, I should say that I don't know what is meant by a "pro-Azerbaijani
position." Azerbaijan's position has always been very clear.
When we started developing our oil fields together with our partners,
we made it very clear to everybody that we were determined to
follow through with it. During the past few years, there have
been many changes in attitude towards Azerbaijan by our neighbors
and by our partners. I think we have managed to create a very
good environment which allows every country interested in developing
our oil fields with us to have a chance.
Our relations with Russia are developing very positively, and
I'm very happy about this. We have inter-governmental transportation
agreements with them. Russian companies are doing a very successful
job in Azerbaijan. What is more important is that the Russian
companies are conducting themselves and acting just like any
other large international oil company in Azerbaijan. They have
assumed this role, and there are no signs of strained relations
between the countries or between the companies. So I think this
development is going in a very positive direction, and we will
be very happy if it continues this way.
Can you tell us about the relationship between Azerbaijanis
in Azerbaijan and Azerbaijanis in Iran? Is there a strong connection
or has history created a division between them?
In the past, we were deprived of the opportunity to see each
other because we lived in the Soviet Union, and they lived in
Iran. Before the collapse of the Soviet Union, it was basically
impossible for us to visit each other. Our relations were virtually
nonexistent. There were many families and relatives who had not
seen each other for many years until the borders opened. Now,
many Azerbaijanis from Iran come and visit us, and our people
go there. We speak the same language and have a similar culture.
The most important thing to remember is that no matter how difficult
it was for us during the past 70 years to preserve our traditions
and culture and for them to preserve their language, we both
have managed to do this. We celebrate the same holidays, we speak
the same language, we have the same traditions and we share similar
jokes. So when we meet, we feel as if we are family, and that,
I think, should answer your question.
We'd like to hear how SOCAR or the Azerbaijani government intends
to fulfill its role as a regional transportation hub, bearing
in mind, political tensions in the region.
I have mentioned that our objective is not only to develop our
oil fields but to become a very large transportation center.
We are taking the first steps toward this goal. Of course, we
know that it won't be easy. But I think the reality of today's
world, the situation and the image of Azerbaijan which we have
managed to create during these last several years will make our
country the best transportation route for oil, especially in
terms of a Trans-Caspian pipeline.
This is the way out, not only for us, but for those who do not
have sufficient pipeline systems and who are still relying on
only one route. It is very important to have alternatives so
you can choose what suits you best. Otherwise, you become hostage
to one decision and to only one route. In this case, Azerbaijan
not only helps itself, but helps its neighbors and our business
partners from other countries to utilize this corridor and to
have another efficient, more secure route to the world market.
(5.4) Winter 1997
© Azerbaijan International 1997. All Rights Reserved.
Back to Index AI 5.4 (Winter
AI Home |