Weekly economic review

Oil Workers Day and 13th Anniversary of the signing of the Contract of the Century to develop large-scale fields Azeri-Chirag-Guneshli is commemorated on 20 September. Oil Workers Day was established in 2001 by the order of former President of Azerbaijan, Heydar Aliyev.

To mark Oil Workers Day, a renowned walk was organized in the National Park of Azerbaijan, an exhibition by departments of the Azerbaijan State Oil Company was organized. A concert was held in the National Park.

The Contract of the Century which was signed on 20 September 1994 began its active development of oil and gas resources in the Azerbaijani section of the Caspian Sea.

Currently the participants to the project are BP (34.1367% participation share), Unocal (10.2814%), SOCAR (10%), Inpex (10%), Statoil (8.5633%), ExxonMobil (8,006%), TPAO (6.75%), Devon Energy (5.6262%), Itochu (3.9205%), Delta Hess (2.7213%).

Within 13 years of signing of the Contract of the Century one can assert that Azerbaijan's global experience was success. Coinciding to the independence of Azerbaijan, the contract promoted the recognition of this country's policy by other world countries. It was a serious challenge for he United States and UK, as the latest developments showed they were not wrong with the selection.

The role of contract for the Azerbaijani economy is great, particularly, on the background of rise in world oil prices. Drop in oil prices at the world market in 1998 to minimum - $9 per barrel actually made sad the foreign oil companies in Azerbaijan and Azerbaijanis as well. Now we understand that accompanying effect from the Contact of the Century is more important, which played a considerable role in the integration into the world market and attracting the necessary investments, management and technologies.

The 'smell of oil' attracted many foreign oil companies to the country. The participants of the Contract are Azerbaijan International Operating Company (AIOC), Amoco, McDermott, Unocal, Pennzoil, Exxon, BP and Ramco, Statoil, LUKoil, TPAO and Delta Oil. Later the list of participating companies changed after McDermott left, Japanese Itochu joined AIOC and BP and Amoco combined. US Mobil, which combined with Exxon, joined the consortium.

In addition, a new name emerged in AIOC: Devon Energy (former Pennzoil), and the British Ramco left the project in 2000 selling its share (2,0825%) to US-Saudi alliance Delta Hess for $150mln. Later Russian LUKOIL left the project selling its 10% share to the Japanese Inpex.

Currently the participants to the project are BP (34.1367% participation share), Unocal (10.2814%), SOCAR (10%), Inpex (10%), Statoil (8.5633%), ExxonMobil (8,006%), TPAO (6.75%), Devon Energy (5.6262%), Itochu (3.9205%), Delta Hess (2.7213%).

The contract of the century put the beginning of active development of resources of the Azerbaijani shelf. Over 700,000 barrels of light oil is produced from the Azeri-Chirag-Guneshli fields a day. In the near future the level of production will reach 1mln barrels of oil a day. Oil produced here is transported via the Baku-Tbilisi-Ceyhan pipeline and is delivered by railway to the Batumi port. At the end of the 2nd quarter of 2007 over 55mln tons of oil was produced from the Chirag field (since November 1998). Production from the Azeri field reached over 35mln tons of oil.

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