Azerbaijan approves 'Contract of 21st Century'

Azerbaijan's President Ilham Aliyev approved the 'Contract of the Century' to extend the development of the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields until 2050, the official website of the President says.

On October 31, the new agreement was ratified by Azerbaijani parliament. A ceremony of signing a new contract was held in Baku on September 14.

The Law on Adoption, Approval and Authorization of Implementing the Agreement on Joint Development and Production Sharing for the Azeri and Chirag Fields and the Deep Water Section of the Gunashli Field in the Azerbaijani Sector of the Caspian Sea was signed by SOCAR’s AzACG (25%), the UK's BP Exploration Limited (30.37%), the US's Chevron Khazar Ltd. (9.57%) and Exxon Azerbaijan Limited (6.79%), Japan's INPEX Southwest Caspian Sea Ltd. (9/31%), ITOCHU Oil Exploration Inc.(3.65%), India's ONGC Videsh Limited (2/31%), Norway's Statoil Absheron (7.27%), and Turkey's TPAO (5.73%).

The agreement will be valid until December 31, 2049.

The Deputy Director General of the Trend information agency, political commentator Arzu Nagiyev, speaking to Vestnik Kavkaza, noted that the extension of the "contract of the century" for 32 years indicates that over the time since its conclusion, Azerbaijan has established itself as a reliable, stable partner. "Its political significance is that the great powers directly related to this contract were convinced that it is possible to talk with equals with Azerbaijan. And the world community was also convinced that there is a significant oil reserve on the ACG block, so it was necessary to extend the contract," he said.

"The extension of the 'contract of the century' guarantees the stability of the money flow to Azerbaijan to improve the well-being of the Azerbaijani people. We are an oil state that invests significant amounts from the sale of hydrocarbons in the development of the non-oil sector, tourism and other areas. This event is of great importance for Azerbaijan both politically, economically and socially," Arzu Nagiyev said.

Head of the expert council of Baku Network, Elkhan Alasgarov, in turn, recalled the results of the execution of the "Contract of the Century" in the 90s-10s. "Over the past period, Azerbaijan from a backward country with a post-Soviet economy, a huge number of social problems, including refugees and IDPs, has turned into one of the advanced countries not only of the post-Soviet space, but also of Eastern Europe, thanks to its good management," he said.

"The extension of the contract guarantees the growth of Azerbaijan's economic indicators, because the financial system is being strengthened, and proper management will play a positive role for the development of both the economy in general and agriculture in particular. It will affect the education system, defense, security, social and cultural issues. I think that the extension of the "contract of the century" is a historical event. The new "contract of the century" gives Azerbaijan the opportunity to move forward along the road of its own economic development," Elkhan Alasgarov said.