Oil Policy

With the strengthening of independence and socio-political stability in Azerbaijan, democracy in the society and market relations in the economy developed favorable conditions were established for integration into the world economy and this process has begun.

Azerbaijan began to play an important role in the geopolicy of Caucasus and Caspian region as a result of the policy.

Azerbaijan has become geopolitical center of intersection of interests of USA, European and Asian countries not only for its oil and gas deposits, but also its position in the Black and Caspian Sea regions. Due to the realization of enormous projects on the development of oil and gas fields and their export to the world market, Caspian region has become one of the most important regions of the world in the XXI century.

On September 20, 1994 the first agreement was signed on the “Development and production sharing of Azeri, Chirag, and Guneshli (deepwater) fields in the Azerbaijan sector of the Caspian”. The agreement, later called “Contract of the Century” paved the way for foreign companies for signing new contracts in Azerbaijan. 27 contracts has been signed between SOCAR and foreign oil companies on the exploration, production of hydrocarbons and production sharing.

The importance of the contracts for Azerbaijan oil policy is summarized, as follows:

The infrastructure of oil industry will be quite renewed in the exercise period of the Contracts and s new, strong infrastructure of oil industry will be formed;

The flow of investment will be provided into other fields of state economy;

Azerbaijan will get new, modern technologies;

A number of new enterprises will be founded in Azerbaijan and they will serve to the foreign oil companies;

There will be a great impulse to the development of banking and insurance business;

A respectful layer of entrepreneurs will be formed and they will work in the framework of the rules of a civilized society;

There will be an increase in the amount of budget receipts from the taxes the foreign companies will pay;

Thousands of new offices will be opened in various industrial and service fields.

All these will soon form a strong development potential in the country and will allow for further strengthening the independence of Azerbaijan Republic.