History of the Baku Oil Industry. Part 61

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 work under the contract was conducted thanks to multi-billion dollar investments. Each order meant new jobs and new salaries. This was particularly important during the economic collapse and mass unemployment in the Republic of Azerbaijan and the former Soviet Union as a whole. Azerbaijani and Western companies entered the competition for acquiring specific orders from the AIOC. Certainly, the orders were distributed on a tender basis and in compliance with Western standards. The problem was that most Azerbaijani companies were not nearly ready to provide services and supply the required oilfield equipment according to international standards. The technical and technological standards used in the republic during the Soviet era differed significantly from those used by Western companies in terms of reliability, efficiency and environmental friendliness. A possible way out of this situation was Azerbaijani cooperation with Western companies, operation of joint ventures (JV) at the required level and provision of guarantees in respect of related services by the AIOC. As a result, the following joint ventures (JV) were founded: "Caspian Geophysical", "MacShelf", "MakDock", "Azeri-Fugro," "Azfen" and others. All of them received orders from the AIOC. The degree of involvement of Azerbaijani companies in the established joint ventures was high. According to SOCAR's partners, this was a surprise to them and had no analogues in the world of western oil companies. Analysis of the table shows that in the first two years of its activity, out of 283 assigned contracts and purchase orders worth 590 million dollars, the AIOC assigned to Azeri companies or joint ventures 46 contracts worth 114 million dollars. When comparing data from 1996 with data from 1995, the significant role of the participation of Azerbaijani companies and joint ventures in the activities of the AIOC becomes apparent. The Azerbaijani share in the total value of transactions increased from 12-15% in 1995 to 20-25% in 1996.The types of contract activity assigned to Azerbaijani companies and joint ventures included the first phase of construction, transportation and maintenance of modules of the Chirag-1 platform, as well as repair of ships, seismic surveys, laboratory tests, helicopter services, environmental studies and terminal and pipeline construction. This was due to the rich history of oil and gas production in Azerbaijan, a relatively developed infrastructure and the high engineering and technical capabilities of the Azerbaijani Republic. From the very beginning of the realization of the project, the American-Azerbaijani company "MakShelf", the world's largest designer of deep-sea platforms, distinguished itself from all other joint ventures. Experts of "MakShelf" had experience of management and construction in many parts of the world, both in the sea and on shore. 

They had designed and developed technical feasibility studies for enterprises on the northern Pacific coast and in western Siberia. The potential of the company includes the production capacity and experience of Azerbaijani oil experts in the profiled American and English companies, as well as companies of the Near and Middle East. In the Azerbaijani sector of the Caspian Sea "Makshelf" carried out marketing and construction services on the basis of industrial facilities with a total area of 110 hectares and was the contractor for AIOC. The company reconstructed the stationary platform Chirag-1 and conducted installation and start-up works from start to finish for drilling organizations in accordance with western standards. The two-piece Chirag-1 stationary platform carried out a three-stage run of the deposit. Oil, gas and water were separated, the fuel was transported separately to the terminals, while the already-purified waste water of course, did not pollute the environment. All in all, 80% of the company consisted of local workers, its head P. H. Hajizade and 70% of engineers and technicians were natives of Azerbaijan. The "Contract of the Century" paid considerable attention to the retraining of local professionals for work in the marine environment. Special schools and courses were set up, which taught both theoretical and practical knowledge, students who passed a special test were sent to study in the US at the expense of the companies. By the summer of 1996, the construction of the platform was expected to be finished and to be followed by the laying of the pipeline. The AIOC planned to drill 24 wells from this platform. Its life at sea is 50 years. By the beginning of 1996, "MakShelf" was the only company that built offshore platforms and pipelines in the Caspian Sea. Another well-known joint venture operating in the Azerbaijan sector of the Caspian Sea was the Azerbaijani-Turkish joint venture "Azfen." In August 1996, the AIOC signed an agreement to build an oil terminal in Sangachal. This terminal was supposed to receive the early oil under the "Contract of the Century." The joint venture "Azfen" was founded by SOCAR and the Turkish company "Tekfen Insaat" The Sangachal terminal consists of 4 tanks with a capacity of 30 tons each. The company "Azfen" constructed a pipeline 200 km long. Tubes were imported from Japan, which had established itself on the world market thanks to the quality of order carries out through Poti in compliance with the time the order was fulfilled. For the early oil pumping it was necessary to build a line of underwater pipes, 24 inches in diameter and 200 km long, to the terminal in Sangachal. The corrosion protection of the pipes was provided in Baku by "Azfen", together with the Dutch company "Broders Prey".