For the second time in the last twenty years Azerbaijan has realized the second international project in the field of energy. Groundbreaking ceremony of the Southern Gas Corridor was held. President of Azerbaijan Ilham Aliyev, President of Bulgaria Rossen Plevneliev, Prime Minister of Georgia Irakliy Garibashvili, Prime Minister of Greece Antonis Samaras, Prime Minister of Montenegro Milo Dukanovic, Minister of Energy and Natural Resources of Turkey Taner Yıldız, Minister of State for Trade and Investment of the United Kingdom Lord Livingston, Minister of Energy and Industry of Albania Damian Gjiknuri, Deputy Minister for Economic Development of Italy Claudio De Vincenti, Acting Special Envoy and Coordinator for International Energy Affairs of the U.S. Department of State Amos Hochstein, BP Group chief executive Robert Dudley and others attended the ceremony.
The gathering also heard the video address by the President of the European Commission Jose Manuel Barroso and the congratulatory letter by the U.S. Secretary of State John Kerry.
We offer our readers the texts of the addresses made by the heads of state and government attending the grand ceremony dedicated to the 20th anniversary of the “Contract of the Century” and groundbreaking of the “Southern Gas Corridor”. We want this to be the firsthand source of what foreign heads of state and government, ministers and chiefs of major companies alike had to say about Azerbaijan’s stance and the role it plays on the issues of regional and international cooperation and ensuring energy security.
Rosen Plevneliev, President of the Republic of Bulgaria:
Mr. President,
Your Excellences,
Ladies and Gentlemen,
I would like to thank President Aliev and people of Azerbaijan for making us part of this historic moment – the launch of the Southern Gas Corridor to Europe.
Five years ago, Europe was reminded by its biggest vulnerability – its energy dependence. Bulgaria was one of the most affected countries during the 2009 gas crisis. We were dependent on a single pipeline, with no meaningful alternatives. The Bulgarian economy was losing hundreds of million euros monthly. Finding alternative sources and routes of gas supply became a matter of national security and energy diversification – a key priority. The crisis in Ukraine highlighted the issue of Europe’s energy dependence and put it at the forefront of the European Union political agenda.
The launch of the Southern Gas Corridor will finally put an end to years of “one-pipe dependence” and bring security of supply to the whole region of South Eastern Europe. Diversification and competition will contribute to energy market liberalization and ensure fairer prices for everyone.
The Greece-Bulgaria (IGB) and Turkey-Bulgaria (ITB) interconnectors must be considered an integral part of the Southern Gas Corridor enabling significant gas flows to Bulgaria and the neighboring countries of Romania, Serbia and many others. These interconnectors, combined with the upcoming enlargement of the Bulgarian gas storage facility to 1 billion cubic meters, will establish my country as a preferred gas distribution hub in South Eastern Europe. Because of this, Bulgaria Is fully committed to rapid realization of the gas interconnectors with Turkey, Greece, Romania and Serbia. The one with Romania will become operational soon. The interconnector with Greece (IGB) sould be completed in 2016. For the other two, we are working hard to make them happen as soon as possible. We are committed to allocate the required financial resources.
Mr. President,
Azerbaijan has always been a valued and trusted partner. I would like to thank you and the Azerbaijani government for your assistance in securing the Supply Agreement between the Bulgarian state-owned company “Bulgargaz” and SOCAR for the delivery of 1 billion cubic meters of natural gas per year starting in 2019. Bulgaria has also declared its readiness to start discussions for the earlier delivery of additional volumes of natural gas from Azerbaijan to Bulgaria from 2017.
The Southern Gas Corridor will further expand regional cooperation, increase energy cooperation and everyone will be a winner.
Irakliy Garibashvili, Prime Minister of Georgia:
Ladies and Gentlemen,
Dear Friends,
First of all I would like to congratulate Mr. President Aliyev with the 20th anniversary of the contract of the century. It is a great pleasure for me to be here today to mark the start of the Second Stage of the construction of the Shah Deniz Gas Field project and I would like to warmly thank my friend President Aliyev for the invitation to address you for a few moments in order to pay tribute to our contribution, to our cooperation and benefits it brings to our economies, to our people and our region.
Azerbaijan is one of Georgia’s closest friends and allies. Energy cooperation holds a special place in our relations. And thanks to our joint efforts we have implemented such important projects as Baku-Tbilisi-Ceyhan pipeline and Baku-Tbilisi-Erzurum natural gas pipeline. Today the historic decision on the Stage Two of the development of the Shah Deniz project triggers plans to expand the South Caucasus Pipeline through Azerbaijan and Georgia, followed by the construction of the Trans-Anatolian gas pipeline across Turkey and Trans-Adriatic Pipeline across Greece, Albania and Italy.
These projects together will create new Southern Gas Corridor to Europe. They will change the energy map, as Mr. Aliyev mentioned, of the entire region and give customers in Europe direct access to the Caspian gas resources for the first time. They will also bring great opportunities for the Black Sea and Caspian Sea regions. Building upon existing pipelines from Baku to Tbilisi and Ceyhan and Baku to Tbilisi and Erzurum, as well as from Baku to Tbilisi and Subsa, they will provide new stimulus to the new range of regional economic interactions.
And they will also have a potential to contribute greatly to the economic development and financial stability by creating new job opportunities and facilitate the eradication of poverty. These are therefore important projects for all of us. They represent however a small proportion of Eurasian region’s huge potential in the energy field. We strongly support in addition the Trans-Caspian pipeline project for transporting natural gas from Kazakhstan and Turkmenistan to Central Europe.
l also want to mention that together with Azerbaijan and Turkey we are working on another very important project – Baku-Tbilisi-Kars railway project which is another exciting project with global reach. We are also enthusiastic about contributing to Afghanistan initiative – quadri-trilateral cooperation between Georgia, Azerbaijan, Turkmenistan and Afghanistan in order to develop a new transport corridor.
These developments in the transit sector are both causing effect of liberalization of global trade which drives economic growth and sustainability. The trade liberalization agenda includes both improvement of hardware – roads, railways bridges and border crossings facilities – in cost-efficient way, as well as software – for instance the harmonization of national customs systems, bringing states into multilateral trade institutions and getting neighbors to work together in bringing down institutional and bureaucratic barriers for trade. The trilateral cooperation between Georgia, Turkey and Azerbaijan on customs and border crossing issues is a good example of this.
Georgia firmly supports this process. Facilitating trade, liberalization and integration to global markets are top economic priorities for our country. Free trade with our neighbors and Central Asian countries has had measurable positive effect and we are fully committed to expand the reach of our free trade agreements.
In closing, ladies and gentlemen, I would like to emphasize once again that my government, my country and my people are fully committed to ensure that Georgia remains a reliable and stable transit, political and economic partner and player in the region and beyond. I am confident that together we will make this historic project a great success.
Thank you very much indeed.
Antonis Samaras, Prime Minister of Greece:
Dear President Aliyev, dear Heads of State and Government, esteemed guests,
It is a great pleasure and indeed it is a great honor for me to be here today, at this Groundbreaking ceremony. Truly a historical event!
The “Southern Corridor” is more than an energy infrastructure project; it is a vision-becoming-reality, today.
It is a vision connecting Europe with Asia; through energy supply and through energy security.
It is a vision of long term cooperation among the countries and the people of such an extended region; indeed a model of global cooperation based on competitive prices which generate growth and promote environmental sustainability.
Greece has been, from the very beginning, one of the steadfast supporters of the “Southern Corridor”; more so since Greece is one of the countries from which the Corridor is passing through.
The TAP, the Trans Adriatic Pipeline, as an integral part of the Southern Corridor, will enter Greece from its borders with Turkey and cross 543 km along its territory in Thrace and Macedonia before entering Albania.
For many months now, despite the difficult times in my country, the Greek state is doing its outmost to speed up procedures and facilitate the smooth realization of the Trans Adriatic Pipeline.
Just a few days ago, we signed the Environmental Impact Assessment, which is another important step towards the commencement of the actual construction phase.
This is a top priority for my Government and I follow it personally, together with Minister Maniatis who is also present here today.
It is clear that the “Southern Corridor” is an open-ended project. Indeed, the prospect of connecting TAP with other pipelines that would cross South East Europe seems to have many benefits.
There are certainly many factors to be considered before the finalization of these ideas; to be sure, the “Southern Corridor” has opened up a door for an array of possibilities: Among them, moving forward with the “Vertical Corridor” utilizing the Greece-Bulgaria Interconnector (the IGB), as you heard from the Bulgarian President and friend, as well as upgrading existing interconnectors and building new ones further north to Central Europe.
In the years to come, the TAP (and additional LNG supplies through Greece) will definitely cover the needs of the Vertical Corridor.
By participating in such projects, Greece improves its positioning and enhances its role in the international energy scene, becoming a “hub” for South-East Europe, as well as – I can also add – continental Europe!
Of course, our policy for energy diversity is not limited to TAP. Let me seize this opportunity to remind you that my country is in the process of upgrading its LNG terminal in Revithoussa, by increasing its storage capacity by 73 %, to reach 225.000 cubic meters, also upgrading gasification speed by 40 %, as well as by improving its ports’ infrastructure.
A second LNG terminal in northern Greece is also in the pipeline for the coming years.
Finally, let me remind you that the 2nd International round of Concessions, consisting of 20 blocks in the Ionian and Cretan Seas is under way. And we have recently concluded the contracts for the concession of 3 more blocks.
I would like to finish by pointing out that there is probably no better and perhaps more symbolic example of synergies between states and the private sector, than the Energy Interconnectors that transcend borders, seas and lands, fueling development and economic prosperity.
I am confident that the “Southern Corridor” will be a prominent and successful example of such a co-operation.
Some decades ago, energy supply used to be a source of friction among nations. Today projects such as the “Southern Corridor”, providing energy supply and energy safety, are becoming a factor of long term stability, piece and global cooperation.
We are not just constructing gas pipelines.
We are building bridges that connect and bring together countries and people across large regions.
And this is, indeed, a global vision that is becoming a reality. Again Mr. President thank you very much for allowing me to be here today.
Thank you
Milo Djukanovic, Prime Minister of Montenegro:
Dear President Aliyev,
Excellencies,
Ladies and gentlemen,
I thank President Aliyev and our Azerbaijani friends for organizing this great event, and for the invitation to Montenegro to participate.
Start of construction of the Southern Gas Corridor (TANAP-TAP) has for this time the importance that twenty years ago for the world had a “Contract of the century”. It is a period which undoubtedly testifies about the dynamic prosperity of Azerbaijan. Also, about the rapid changes in the energy sector at the national and at the global level. And about a continuing increase in demand for new energy sources all over the world.
Montenegro is since the beginning in this project. From the Memorandum of Understanding in Tirana, through last year’s conference in Baku on which the decision was made on the implementation of this investment, until the today’s commencement of the works, which makes future of the pipeline TANAP-TAP certain. On it will be joined the Ionian Adriatic Pipeline (IAP) through Albania, Montenegro, Bosnia and Herzegovina and Croatia. For Montenegro, as well as for our neighbors, and the EU countries, it opens completely new energy perspective. In the Western Balkans, these projects far exceed the energy importance. The issue of energy transcends national and state boundaries. Cooperation in this area is becoming increasingly important for economic security and overall development of countries.
Montenegro is in line with EU energy strategy, whose priority is the smooth energy supply, the development of competitive energy market and sustainable energy development. Diversification of energy sources is one of the prerequisites for achieving these goals. Regional approach seems more promising sources of funding these major projects, including EU grants. At the Berlin conference on the Western Balkans at the end of last month, the project of building a European route for the Southern Gas Corridor is rated as one of the most important for the development of the region. Gasification makes a new era of development possible for Montenegro. This will mean better conditions for new investment and job creation. We hope it will strengthen the exploration of oil and gas in the Montenegrin coast.
Joint efforts being invested in constructing the TANAP-TAP and the Ionic Adriatic Pipeline are an example of successful international cooperation in meeting objectives of the European energy strategy. I am convinced that in this way we build a better common future. To all countries and companies I wish to succeed in this great work.
Thank you for your attention!
Lord Livingston, Minister of State for Trade and Investment of the United Kingdom:
President, Ministers, Your Excellencies, Distinguished Guests.
I am delighted to be here in Azerbaijan for thiscelebration. I am delighted, too, to address you from the spectacular Heydar Aliyev Centre, designed of course by British architect Zaha Hadid. But today we are here today to celebrate Azerbaijan’s contribution to the energy sector. On behalf of the British Government, I’d like to congratulate HE President Aliyev, and the people of Azerbaijan, on the anniversary of the signing of the now famous ‘Contract of the Century’. I’d like to thank you for the invitation and to take this opportunity to say a few words. John Paul Getty once said that the key to success was to rise early, work late and strike oil. This can also be said of the success of Azerbaijan – a country which through hard work and energy resources is playing a vital role in the European and world economy. The UK is proud to be a partner in that success.
Azeri-Chirag-Guneshli (ACG) – 20 years of Partnership
As operator of the giant Azeri-Chirag-Guneshli development, BP – in partnership with SOCAR – has turned this venture into one of the largest offshore complexes in the world… And the largest contributor to the economy of Azerbaijan.
Ladies and Gentlemen, Azeri-Chirag-Guneshli (ACG) is the ‘jewel in the crown’ in the history of energy development in Azerbaijan. …BP’s, and indeed the UK’s partnership with Azerbaijan, looks beyond current projects, and towards future developments.
Strong bilateral relationship
With that in mind, I am proud to celebrate not only the twentieth Anniversary of ACG, but also over 20 years of solid UK-Azerbaijan relations, of which ACG has been the cornerstone.It was also some 20 years ago that our two Embassies opened in Baku and London. And since then, our relationship has grown at a pace. Our long-standing commercial links have laid the foundation for a strong bilateral relationship between our two countries, a warm relationship that continues to grow. And UK firms are the largest source of Foreign Direct Investment here, with over 500 companies doing business, especially within the Oil and Gassector, and we are looking to increase this over the coming years. Of course, Azerbaijan is investing beyond the energy sector to both diversify its economy and improve its infrastructure. The UK stands ready to assist in the seendeavours. For example, Azerbaijan has great potential in fields such as high technology, and I was very pleased to welcome a trade delegation of technology companies to London in June, led by Minister Ali Abbasov. British companies are also well-equipped topartner with Azerbaijan in developing its infrastructure in areas such astransport, water, and waste management.
The Southern Gas Corridor
Looking to thefuture, the development of the Shah Deniz field and the construction of the Southern Gas Corridor pipeline to Europe is something that we all welcome and fully support. Indeed, the Southern Gas Corridor will play an important role in diversifying the EU’s gas market, and so increasing the continent’s energy security. Its construction will be one of the largest and most challenging infrastructure projects in the world. However, its importance should not be underestimated. Both during construction and on completion, the Corridor will create immediate benefits for all the countries along its route.
There is much to celebrate today but there is also much more we can achieve in partnership together. The UK, with its experience and expertise, want to be ‘Partners for Future Growth’ with Azerbaijan, across all industry development and diversification. I’ll end here, but I’d like to offer my congratulations again to the Government of Azerbaijan, BP and all of those who have been involved in these strategically important projects. I wish you every success and prosperity in the future development of ACG, and I look forward to celebrating in the coming years, the first Shah Deniz Gas delivery to Europe. Thank you.
Damian Gjiknuri, Minister of Energy and Industry of Albania:
Hello!
Let me start by expressing gratitude to the friendly government of Azerbaijan and the state oil company for their invitation to be part of this important ceremony.
Nine months ago, I was in Azerbaijan in the ceremony of the signing of the Financing Agreement of the Trans Adriatic Pipeline project, which going through Albania as well intents to transport gas from the Caspian Region to Europe.
I come back today to Baku, reinforced in my conviction of the space that exists for cooperation between our two countries, especially in the oil and gas fields.
This ceremony, marking the 20th anniversary of what is known as “The Contract of the Century”, constitutes a great inspiration for all of us to support and advance new projects that will generate economic development, partnership, and regional and global stability.
The government of Albania considers the TAP Pipeline project with essential and strategic importance to the economic development of the country.
This pipeline can be, and with your help, we are committed to make this into a source of development, not only for Albania, but for Kosovo, Croatia, Macedona, Montenegro, and all other Southeastern European countries as well.
Giving utmost importance to the TAP Pipeline, the Albanian Government has continuously shown readiness to prepare, answer, and fulfill all obligations arising from this major project for the country and region.
We are determined to provide all the necessary human and material resources, the legal and institutional framework to ensure the success of this project in all of its aspects as it relates to Albania and Southeast European countries.
In the Albanian part only, the cost of investment will be 1 billion dollars, which provides for the opening of thousands of new jobs and as such, TAP will become one of the main GDP contributors in Albania in the following years.
It is my conviction that Albania must seize the moment, and while aiming to meet its internal needs, at the same time become a promoter for the gasification of many countries in the region which do not yet have the market and infrastructure needed for it.
On this note, I express my deep appreciation for the Azerbaijani Government and the SOCAR company for demonstrating willingness to help realize this goal and make Albania part of the gas market.
This project will forever change the face of Albanian energy security as it will introduce for the first time in Albanian energy a new resource: natural gas.
The branching of the TAP Pipeline with the Ionian-Adriatic Pipeline (IAP) would increase the chances and opportunities to ensure energy security in our region, and it would also be an important element for the economic development of all countries affected by these projects.
Furthermore, I am pleased to conclude that Albania offers natural and potential resources for large exploitation of oil and gas.
Recent discoveries of oil within the Shell-Petromanas search clearly show this potential, which has led to growing interest from foreign investors.
We have taken steps to draft a set of rules for transparent competition for the new blocks of oil-bearing areas.
The Government of Albania is fully committed to support foreign investment. While placing significance to transparency and security, we express our confidence that we are creating a most suitable environment for foreign entrepreneurs to invest in Albania, contributing this way to the security and stability of the region.
Claudio De Vincenti, Deputy Minister for Economic Development of Italy:
Your Excellency Mr. Ilham Aliyev, President of the Republic of Azerbaijan, Excellencies, Ladies and Gentlemen,
I am very pleased to participate today in this important ceremony, celebrating the twentieth anniversary of the signing of the “Contract of the Century” and the lunch of the ground-breaking works for the Southern gas corridor.
I’m honored to share with you this particular moment that celebrates the achievement of very important goals in the field of the exploitation of the energy resources of Caspian region.
These results are the outcomes of twenty years of cooperation between Azerbaijan and the oil companies that have signed in 1994 the Contract of the Century that has been instrumental both in strengthening the cooperation with Azerbaijan and in attracting a big amount of investments in the energy sector into the country improving meanwhile the Azeri energy security.
In this context, the Southern Corridor represents undoubtedly an evolution of the Contract of the Century, also on the gas side.
Let me seize this opportunity to emphasize the role played by my country from the very beginning in supporting the TAP project and promoting the intergovernmental agreement among Greece, Albania and Italy.
Finally, today I am able to formally announce that Italian Government has given the green light to the TAP project allowing the opening of the sites in 2015.
With the so called “Unblock Italy” bill, the Italian Government included the Trans Adriatic Pipeline among the pivotal infrastructures contributing to the economic development of the country, thus overcoming any outstanding issues delaying the activities on the ground.
The Trans-Adriatic Pipeline project represents an important drive for gas supply diversification for both Italy and Europe.
One of the main goals envisaged by our National Energy Strategy is to continue improving our security of supply, especially in the gas sector. This is why the Italian Government is committed to pursue the TAP project. We need, most notably, to improve the diversification of our sources and transit routes as a key element for greater security, as also declared by the last June European Council.
In addition, not only is the TAP project a big chance for Southern Europe’s supply diversification, but is also instrumental in increasing the energy independence and security in the Balkan region.
In perspective, eventual interconnection with other countries in the area could further contribute to strengthen TAP contribution to the overall Balkan region energy security.
I would also like to point out that the TAP has been included by the European Commission in the list of the project of Common interest that will benefit from fast-track procedures for issuing licenses, most favorable terms of regulatory framework and access to financial support.
As Saipem has proven in the TTAP project, Italy is ready to offer a valuable contribution to TAP at a technical know-how level as well, thanks to the involvement of its companies, assuring a high-quality work and experience in this extremely specialized field.
In conclusion, Mr. President, Sir, let me emphasize once again that my presence today is meant to signal the ever continuous support of Italy to this strategic project that make an important contribution for us in order to cover our energy demand and to become the energy hub for the continental Europe as well as the Mediterranean region as foreseen in our National Energy Strategy.
Amos Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs:
President Aliyev, Ministers, & Distinguished Guests.
It is my distinct honor to participate in today’s celebrations.
Today marks twenty years since the signing of the Contract of the Century – the production sharing agreement for Azerbaijan’s ACG oil fields.
The Contract of the Century was indeed historic. It represented the largest investment by Western companies in the entire former Soviet Union at that time, and it has stood the test of time over two decades.
Combined with the development of the Baku-Tbilisi-Ceyhan oil pipeline, for the first time, a direct energy link was established between the Caspian and Mediterranean. And we are honored to have played a critical role supporting Azerbaijan through the development and completion of the BTC pipeline. American Presidents from Clinton to Obama have been steadfast supporters of this project.
Today we are here to begin the process of closing the circle we began 20 years ago. Back then we signed the oil contract of the century — the 20th century. Today we are breaking ground for a new project bringing gas from the Caspian to Europe. Marking a monumental new project for a new century — the 21st century!
This ceremony could not have come at a more fitting time. We have all been reminded of the critical need for nations to benefit from a basic right to energy security. No country in the world should be forced to depend on a single source of energy. Diversification is a big part of the answer. Diversification of sources, diversification of fuel and diversification of routes.
With the completion of the BTC, the expansion of the South Caucasus Pipeline, along with the construction of the TANAP and TAP Pipelines, Azerbaijan will play an increasingly important role in the diversification of European energy supplies. As President Aliyev has commented: “opening this corridor actually changed the energy map of our continent”.
Twenty years ago, nobody believed the BTC pipeline would be built and for the past 10 years people have been skeptical about the Southern Corridor. But we know one thing for certain, skeptics never win, never accomplish anything. the determination of the people of Azerbeijan, along with their partners in the US, Turkey, and Europe overcame the skeptics and now the next chapter is about to begin, and the impact will be felt in the region, in Europe and all the way to the E. Mediterranean.
U.S. energy partnership with Azerbaijan
Our energy partnership with Azerbaijan is strong and continues to strengthen as more projects come on line. As President Obama said this past June, “Making the Southern Gas Corridor a reality will require hard work and close cooperation between Azerbaijan and its international partners. The United States sees the completion of this project as an important step toward expanding Europe’s gas supplies and stands ready to assist”.
Secretary of State John Kerry was regrettably unable to attend this historic event, but he asked me to read a letter to President Aliyev on his behalf for the occasion. Secretary John Kerry writes:
Dear Mr. President:
I send warm greetings to the people of the Republic of Azerbaijan on the 20th anniversary of the “Contract of the Century” and ground-breaking of the Southern Gas Corridor.
This historic event represented the first major Western investment in the entire former Soviet Union. Over the past 20 years, the United States has been a full partner in Azerbaijan’s efforts to develop its energy resources, contribute to European and world energy supplies, and become a strong and independent nation. Along with the construction of the Baku-Tbilisi-Ceyhan pipeline, Azerbaijan became a major supplier of oil to world markets by creating the first direct energy link between the Caspian and the Mediterranean seas. Azerbaijan will play an important role through the Southern Gas Corridor to provide additional energy supply routes to European markets and strengthen the region’s energy security.
Azerbaijan and the United States have done great things together over the past two decades. The Deal of the Century proves what is possible when we join hands to embrace the future. This is true across the board, from further energy development to building an east-west trade corridor, and from cooperation on counterterrorism to advancing Azerbaijan’s democratic development to reclaim the leadership role on human rights and fundamental freedoms its people and government demonstrated 96 years ago, when Azerbaijan became the first Muslim majority country committed to universal democratic values. The three pillars of our relationship – security, energy and economic development, and democracy and civil society – are all essential to the vision of a stronger, more stable, and more prosperous Azerbaijan.
The United States looks forward to working closely with you and your government on all of these goals. Once again, please accept my warmest congratulations on the anniversary of this important milestone.
Sincerely,
John F. Kerry
Mr. President, I am proud to be here on behalf of Secretary Kerry as his Special Envoy for International Energy, to follow in the proud tradition of my predecessors, to support in any way that I can the development of the Southern Corridor. Energy security is a vital interest of Azerbaijan, Turkey and Europe and as such, is a vital national security interest of the U.S.
Azerbaijan has been an energy leader since independence and I know you will continue to lead with courage and determination and, in an open, fair and transparent manner.
The U.S. will be there with you to see your vision of prosperity through.
Congratulations!
Erna Solberg, Prime Minister of Norway:
Mr. President, Excellencies, Ladies and Gentlemen.
It is an honour for me to greet you on this day of celebration of old and new milestones.
The ”Contract of the Century” in 1994 was a turning point in the history of Azerbaijan. By inviting international companies and investors to take part in the development of the Azeri-Chirag-Güneshli oil fields and opening up for export of oil to international markets, the Republic of Azerbaijan took an important step for the prosperity of the country and for its integration in world markets and world affairs. 1994 also marked the starting point for the commercial activities in Azerbaijan of the Norwegian oil company Statoil and several specialized service companies.
Today, 20 years later, Norway and Azerbaijan have become close partners in the field of energy. This is beneficial to both Norway and Azerbaijan and to the companies of our countries. I hope to see our relationship continue its development in the future.
Today is not only about history, it is also about the future. As the first part of The Southern Gas Corridor is welded in place, a new chapter begins in the relationship between Azerbaijan and its partners. In these times we sense ever more strongly that energy and security go hand in hand. Norway supports the Southern Corridor and the added energy security it will bring to the countries along its path and for the consumers in the European Union. Azerbaijan and Norway are partners in securing large and stable energy supplies to Europe and will remain so for a long time to come.
Mr. President,
Please accept my compliments on the anniversary of the Contract of the Century. I wish you every success in the realization of Shah Deniz phase II and the Southern Gas Corridor.
Robert Dudley, BP Group chief executive:
Good morning Mr President, Prime Ministers and Your Excellencies, distinguished guests and colleagues. Congratulations!
This is a great day for Azerbaijan and a great day for energy.
What has been achieved here since 1994 is extraordinary. And for that I want to pay tribute to President Aliyev and his government. I also pay tribute to Rovnag Abdullayev and his team at SOCAR, and to all the partners represented here today.
Together we have showed what partnership can deliver.
And we are very grateful that so many Ministers and representatives of governments have joined us today.
Today is not just an anniversary of a contract. It is a landmark in the renaissance of Azerbaijan’s oil industry.
Earlier this year I had the privilege to speak at a gathering of the world’s energy industry.
I said that many people date the start of the modern industry to an oil well in Pennsylvania in 1859.
But I pointed out that a well was successfully completed here in Azerbaijan as early as 1848.
So Azerbaijan, the land of fire, was truly the cradle of the oil and gas industry. And in 1994 the nation witnessed the rebirth of that industry.
The agreement signed then was rightly called the ‘contract of the century’. Eleven companies from six different countries joined together with SOCAR to launch a new phase in the country’s energy journey.
And what a journey it has been, developing Azerbaijan’s offshore oil resources and conveying them to world markets via the BTC pipeline that stretches from Baku to Ceyhan.
For those from other parts of the world, that is the same distance as Houston to Chicago or London to Madrid.
The programme has already produced 2.5 billion barrels of oil and seen nearly $30 billion of investment.
Let me give you three reasons why I believe the contract succeeded and we are here today.
People
The first – the most important – is the people involved.
This has been a truly international effort involving many thousands of committed people across the world. But the bulk of the work was done right here by Azerbaijani workers.
The project provided jobs for people from the Sangachal area and enabled many Azerbaijani companies to develop their capability and become suppliers to the projects.
The local business infrastructure has improved.
New professional skills have been learned.
In particular we set up the Caspian Technical Training Centre which has now trained around 900 technicians in operations and drilling.
It has been great to see this capability grow to the point that the recent West Chirag platform fabrication was fully undertaken in Azerbaijan.
BP and partners have also contributed $60 million to social, environmental, cultural and sporting activities here in Azerbaijan.
We were the official partner for Azerbaijan at the London 2012 Games and we are very much looking forward to acting as official partner for the First European Games.
Significance
The second reason for the success of this partnership is the strategic importance of energy from Azerbaijan.
The world’s markets are thirsty for energy supplies and we have opened up a whole new route from a land-locked sea that is rich in natural resources.
To date, over two billion barrels of oil have been carried through the BTC pipeline.
And today we are not only looking back to celebrate the last two decades, but looking ahead to the next chapter in Azerbaijan’s energy story as we start the building of the southern corridor to carry gas from the Caspian’s giant Shah Deniz field to Georgia, Turkey, Greece, Bulgaria, Albania and, ultimately, Italy.
After this ceremony President Aliyev has kindly agreed to join us at the Sangachal Terminal for the official groundbreaking for the southern corridor.
Together we will help to lay the first piece of pipe for the pipeline system that will eventually stretch for 3,600 kilometres – around twice the length of the BTC pipeline.
This is a multi-decade, $45 billion, project that will benefit millions of customers and create tens of thousands of jobs.
With these projects, Azerbaijan is developing a growing role as a highly strategic supplier of oil and gas.
Innovation
The third reason for the success of the ACG development is the innovation it has demonstrated.
This may be an investment that builds on tradition, but it has also been ahead of its time in technology.
For example, we have demonstrated what extended reach drilling can do, with one well that stretches for over 6 kilometres from the Chirag platform.
We’ve installed the world’s first subsea water injectors.
And new techniques have been introduced to control the sand that can interrupt the flow of oil when young sandstones are being drilled.
And Shah Deniz Two is now poised to follow in ACG’s footsteps as a pioneer of many more technologies.
Conclusion
Energy is a long term business which demands great care, persistence and patience.
The contract we are celebrating today was signed in 1994.
The early project began in 1997.
The full field development was agreed in 2001 and the field became fully operational in 2008.
We can now look ahead to many more years of production.
At the Shah Deniz field meanwhile we have extended the production sharing agreement up to 2048.
That is really long term.
We are celebrating a 20-year anniversary today. But the year 2048 will mark nothing less than the 200th anniversary of Azerbaijan’s first pioneering oil well.
Events come and go, day by day, year by year, but what endures are major projects, great technologies and the work of highly skilled and committed people. I would like to take this opportunity to say thank you to all these committed people who have contributed to ACG’s 20 year successful journey.
BP is very proud to have been a part of this long term project and I hope we will all continue to work together for many years to come.
Thank you and have a great day.
