History of the Baku Oil Industry. Part 57

After the discovery of oil fields, Baku became a special place, where various economic and political interests of international coalitions, industrial clans and leaders were concentrated and clashed. VK begins publishing chapters from the book by Ismail Agakishiyev "History of the Baku Oil Industry and the Second Oil Boom (second half of the 19th century - beginning of the 20thcentury)" The book presents a historical analysis of the emergence and current state of the Azerbaijani oil industry.

The AIOC also carried out repairs of 10 support vessels, which required investment of 17 million dollars. Gradually, an AIOC fleet was created. Originally, the AIOC had only five vessels, four of them were leased under a contract with "Kaspmorneftflot": "Neftegaz 62", "Aura", "Yarenga" and "Tabriz Khalil-Bailey". One of the ships, "Malik-1", was purchased in the US and was owned by the AIOC. It operated as a tug. Works were supervised by the world-famous company BUE MARINE, which had extensive experience in deep water and diving works. 

The team of the expedition was diverse. Initially, most of the work was carried out by Azerbaijani citizens, because the area was well known to them. By the end of 1996, in accordance with the schedule, three storage tanks were gradually built at the Sangachal terminal. According to Terry Adams, the work there was mainly carried out by the Azerbaijani contractors. Based on the "Shelfproektstroi" association, construction and upgrading of the platform modules of the "Chirag-1" field were carried out. Following the schedule, the ship "Azerbaijan" was repaired and a pipeline layer, "I. Huseynov", was modernized in the shipyard. The drilling of the first well was completed, and the "Dada Gorgud" was ready for the drilling of a second well. In two years, the AIOC had invested 600 million dollars in the project. Carrying out operational costs, the AIOC could only hope to find oil in sufficient quantities, otherwise, according to the terms of the contract, SOCAR would not have reimbursed its costs. Therefore, despite an absolute guarantee of the existence of oil reserves at the Azeri-Chirag-Guneshli fields, the investments of the AIOC were at a certain risk. After the cost recovery, the revenues were divided between the parties. According to projected estimates, in the case of a full-scale development the revenues were to amount to 99 billion dollars over 30 years. According to the vice-president of the AIOC for Commerce, Art Makhafi, foreign companies are attracted to Azerbaijan by the opportunity to invest their capital and profit from using their own technologies. As the AIOC president Terry Adams noted, the government of the Republic of Azerbaijan was to receive 300 million bonuses for the "Contract of the Century" in three stages: after the signing of the contract in late 1994, after the production of the first oil and after the launch of the main export pipeline. Revenues from the taxes on profit, the share of oil owned by the government and the oil share of SOCAR are estimated at approximately 80 billion dollars. The assessment of the "Chirag-1" platform was carried out by a group from Houston operating as part of the CTS. 

The company "Brown and Root" was chosen to conduct a detailed evaluation of the platform and its use in the program of early oil production. Within the CTS, six experts from Azerbaijan worked in Houston. Chapter 3. The second Baku oil boom. The 1990s and the beginning of the 21st century In June 1996, building of the town for the maintenance workers of the "Chirag 1" platform was already under way. Not far from it was the first AIOC warehouse. The floating  drilling rig "Kaspmorneft" was moored to the production site of "Shelfproektstroy" for re-equipment. Repairs of the modules from the "Chirag 1" platform were also carried out here.

These works were completed by the experts of the American cotract firm "Santa Fe" together with fifty Azeris. It had been planned to drill three exploratory wells by the end of 1996.  The deepest-water part of the Guneshli oilfield reached depths of 500 meters. To produce oil from this depth, a semi-submersible installation, made more than 15 years ago in Finland and originally designed for a depth of 200 m, was re-equipped. Its modernizing involved the company "Santa Fe" and the Scottish firm "Rich Blair", which performed anti-corrosion work. 177 citizens of Azerbaijan and 58 foreigners worked on modernizing oilrig equipment under the control of Rick Schatz. "Chirag 1" was being constructed from different modules: oilrig, compressor, generator, fire alarm system and other aggregates. The weight of modules ranged from 250 to 400 tons. The largest of them, at 8 m height, had a board area of more than 300 square meters.

Modernization of the platform modules of "Chirag 1" also involved the joint venture "Makshelf" together with the Azerbaijan-American enterprise "McDermott International" and "Shelfproektstroy." They had to complete the work by August 1996.  AIOC performed operational work closely with the leadership of SOCAR. The team of Heydar Aliyev with the team of the President of AIOC, T. Adams, defined the strategy and tactics for joint operations. For promoting mutual understanding between AIOC and SOCAR, a position of advisor from SOCAR was established under the President of AIOC.  The advisor was endowed only with advisory functions. An important aspect of his activities was the representation of the interests of the Azerbaijani companies and ensuring they had the the maximum active participation in the project. Investment in the updated "Chirag 1" platform in the project of early oil amounted to about one billion dollars. Capital investment in the project in all three fields should have amounted to 7.5 billion dollars.