International scientific journal

ISSN: 2663-0419 (electronic version)

ISSN: 2218-8754 (print version)

International scientific journal

ISSN: 2663-0419 (electronic version)

ISSN: 2218-8754 (print version)

SCImago Journal & Country Rank
№ 3, 2023

Stages of national leader Heydar Aliyev’s oil strategy

Prof. Fakhraddin Kadirov

The General Manager of the Oil and Gas Institute of Ministry of Science and Education of Azerbaijan, Full Member of the Azerbaijan National Academy of Science



Dear conference participants and dear guests, I greet you on the opening ceremony of the International Scientific and Practical Conference “HEYDAR ALIYEV AND AZERBAIJAN OIL STRATEGY: Advances in oil and gas geology and geotechnologies” dedicated to the 100th anniversary of the national leader of the Azerbaijani people, Heydar Aliyev.

The oil policy of the national leader of the Azerbaijani people Heydar Aliyev can be divided into several stages. The initial stage covers the period from the election of Heydar Aliyev as leader of Azerbaijan in 1969 to the period of independence. During that period, a new stage started in the history of oil and gas industry development in Azerbaijan. Beginning in 1969, Azerbaijan entered a highly dynamic stage of growth in the oil and gas industry.

As a result of the initiative and efforts of national leader Heydar Aliyev, which stimulated the development of the oil industry in Azerbaijan in 70-80s, the Shelf type of equipment for drilling at the depth of water column of 200 meters provided the discovery of new giant deep-sea oil and gas fields. The discovery of 8 new oil and gas fields expanded oil reserves by two and gas reserves by three. During this period, the new large oil fields (Guneshli, Chirag, Azeri, and others) were discovered at a depth of 80-350 meters.

At this stage, a special program for petroleum refining in Azerbaijan was developed and implemented by the initiative and under the coordination of the prominent politician Heydar Aliyev. With the implementation of the stages of the “reconstruction plan of the oil refining industry in Azerbaijan”, the changes occurring in the mentioned sphere deepened and expanded. Heydar Aliyev's oil strategy at the initial stage created an opportunity for the formation of an oil industry in Azerbaijan corresponding to world standards.

The allocation of USD 450 million in the Soviet Union for the construction of the Deep Water Jackets Factory in Baku (Azerbaijan), which had no analogs in the world at that time, the receipt of a license from Moscow (this plant was planned to be built in Astrakhan) was the result of the wise policy of Heydar Aliyev.

All these facts were due to the wise and farsighted policy of the national leader of the Azerbaijani people Heydar Aliyev. He was well aware that all the works carried out would serve the economic independence of Azerbaijan, which would gain independence in the future. History has proved national leader Heydar Aliyev right.

Heydar Aliyev's independence period oil policy. Azerbaijan faced many difficulties in the early 90s after gaining independence. The rupture of the economic relations between the Azerbaijan Republic and the Republics of the former USSR and the instability within the country put the oil and gas industry in a severe crisis state. In such conditions, Heydar Aliyev, who returned to Azerbaijan at the request of the people for the second time stood with the slogan “Oil is the national wealth of Azerbaijan” and was closely 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. It was necessary either to wait 15-20 years for the financial and economic situation of our country to become favorable, or to invite foreign oil companies. The national leader of the Azerbaijani people decided to attract large oil companies to Azerbaijan and a “New oil strategy” was developed in a short period of time. At that time, by order of the President of Azerbaijan, negotiations with foreign companies on the development of Azeri-Chirag-Guneshli fields were started. Genius leader Heydar Aliyev, who saved Azerbaijan from catastrophe, began to take measures for its economic recovery. From the very first days, the First Vice President of SOCAR, Ilham Aliyev, was involved in the negotiation process, becoming one of the most active participants in the development and successful implementation of the new oil strategy. On September 20, 1994, the “Contract of the Century” – “Production Sharing Agreement” was signed with 11 famous oil companies from 7 countries of the world on the development of Azeri-Chirag-Guneshli fields (deep water part). President of Azerbaijan Heydar Aliyev, who made a statement a few days before the signing of the agreement, assessed it as one of the decisive means to protect the sovereignty of our country and achieve rapid development of the national economy and said: “The presented project ensures the economic interests of the Republic of Azerbaijan, Azerbaijani people today and in the future, therefore I have decided to sign this agreement”.

In the time that has passed since the signing of the “Contract of the Century”, today, the successful realization of the “New oil strategy” of national leader Heydar Aliyev has become a reality. Considering all that, it is possible to single out the following implemented directions of the new oil strategy:

Ensuring Azerbaijan's access to the global markets of energy sources through the attraction of international oil companies, foreign business circles, and large investments in oil and gas projects;

Creation of export pipeline system to ensure free and rapid access of Azerbaijani oil to the world market;

The 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, and later this Agreement was ratified by Turkey and the parliaments of Azerbaijan and Georgia. The foundation stone of the Baku-Tbilisi-Ceyhan pipeline was laid with the participation of the national leader of Azerbaijan, Heydar Aliyev, with Turkey and Georgian presidents at Sangachal terminal in Baku on September 18, 2002, and its construction was initiated. The connection of the Azerbaijani part of BTC with the Georgian part took place in October 2004.

Currently, this pipeline allows not only to export Azerbaijani oil to world markets but will also become the main trunk pipeline of the “Silk Road” and Turkish-speaking countries. The selection of the Baku-Tbilisi-Ceyhan route results from our national leader Heydar Aliyev’s excellent policy; now, this pipeline has entered the oil pipeline system as a world “artery”.

Collecting and increasing oil revenues, which is the national wealth of Azerbaijan, for future generations, using these revenues for today’s generations, considering current social needs, economic progress, and development requirements of our country.

According to this, national leader Heydar Aliyev signed a decree on the “Establishment of the State Oil Fund of the Republic of Azerbaijan” on December 29, 1999.

One of the achievements of realizing the “New Oil Strategy” established by national leader Heydar Aliyev is the introduction of advanced Western techniques and technology to Azerbaijan.

The new technology and equipment used in the hydrocarbon fields’ development, drilling, and operation have positively impacted the oil industry. For the first time in Azerbaijan, the construction of a giant offshore plant allowing the drilling of 48 wells in the Central Azeri field was built. Technically, one of the largest terminals in the world, the Sangachal terminal, has been built. In Azerbaijan, the companies “Tektfen”, “Azfen”, “McDermott” and others played a big role in the realization of the above-mentioned gigantic constructions. Thousands of Azerbaijani citizens work in foreign companies and firms in Azerbaijan's oil and gas sector.

To date, the oil strategy worked out by Heydar Aliyev is the basis for the fact that Azerbaijan, as an independent state, is the owner of its national 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. Seeing all this in advance, President of Azerbaijan Heydar Aliyev, in his historic speech at the signing ceremony of the “Contract of the Century”, said: I am happy to participate in elaboration and signing of this contract. I recognize the responsibility I have assumed and hope that future generations will properly appreciate the historic event that took place here today”.

At present, the oil strategy of national leader Heydar Aliyev is successfully advancing to a new stage under the leadership of the President of the Republic of Azerbaijan, Ilham Aliyev.

The beginning of an essential stage of the oil strategy of President İlham Aliyev is September 14, 2017. On this date, the Azerbaijani government, an International Consortium, and BP signed a new agreement on the development of the Azeri-Chirag-Guneshli oil and gas field until 2050. Addressing the signing ceremony at the Heydar Aliyev Center in Baku, President Ilham Aliyev said: “The contract that will be signed today is very important for our country. Development of Azeri-Chirag-Guneshli oil field is extended till 2056. The new contract to be signed is even more profitable for Azerbaijan, although the contract signed in 1994 has fully satisfied our interests. This time the contract was signed on even more favorable terms”.

Dear conference participants! I believe the conference dedicated to the 100th anniversary of Heydar Aliyev will continue its work in a constructive and creative atmosphere, and the decisions and recommendations made here will be of great importance for scientific research resulting from the oil strategy of national leader Heydar Aliyev.

I welcome you once again and wish success to the conference participants.

Thanks for your attention!