Historic analysis of developments in the Azerbaijani oil industry in the last years of the Soviet Union allows us to make the following positive conclusions.
First of all, there was the major unity "Souzneftmash" (Azneftmash) in Azerbaijan. It included 14 industrial enterprises producing oilfield equipment, 2 research and development institutes and a design-engineering bureau. The unity produced 70% of all the oilfield equipment of the entire Soviet Union. It was exported to 25 countries around the world. Azneftnash was the main provider of oilfield equipment for the Soviet Union.
Secondly, there was the world-famous Azerbaijani Oil Institute, situated in Baku. Its graduates became the elite managers working in the Soviet Union, as well as abroad. They would be the top managers of the leading oil companies on the territory of the former Soviet Union during the 1990s.
Furthermore, on the Apsheron peninsula, which had been one of the major "world oases of black gold" since the mid-19th to the mid-20th century, oil was produced up to the end of the 20th century. However, after the end of the Great Patriotic War, oil production there decreased dramatically due to lack of equipment.
The main reason for this were the decreasing oil reserves ashore and demand for new investment. However, according to oil workers, in old oil wells 30% of the oil remained unrefined. Lack of investment was the main obstacle to producing the remaining oil on the Apsheron peninsula. This led to the necessity of founding joint corporations with foreign companies
Next, in 1949, the Azerbaijani oil industry began to produce oil from the bottom of the Caspian Sea. Initially a town was built, Neftyani Kamni, and standing oil piers were erected in the sea. Later, Soviet engineers created mobile offshore units. During the 1980-90s exploration of oil in the Azerbaijani part of the Caspian Sea was implemented very intensively. Due to the self-sacrificing work of Soviet oil workers, the new oilfields "Chirag", "Azeri" and "Guneshli" were prospected. Nevertheless, in the Soviet Union there was still insufficient equipment and technologies for their effective exploration. The USSR was inferior to the international oil companies working in the North Sea. During the last 10 years the economy had found itself in deep crisis and there were no material resources for continuing risky exploration. The government wasn't interested in it because of the rich gas and oil fields in Siberia. That is why the natural necessity of cooperating with foreign companies as part of the exploration of the Caspian Sea appeared. This is not separatism or an anti-Russian policy. It is the objective reality of an independent Azerbaijan. The Soviet authorities were the first to start negotiations with Amoco, BP and other companies.
In addition, in the 1980s the financing of Azerbaijan's oil and gas industry was cut dramatically in the context of the deep economic and political crisis throughout the whole country. This led to insufficient volumes of consumed gas. To satisfy the gas demands of the South Caucasus republics the Soviet Union resumed gas imports from Iran. Azerbaijan became dependent on different importers of gas (Iran, Turkmenia, Russia). Gas-price hikes and an ineffective policy on the part of the authorities made lack of gas the "Achilles' heel" of the Azerbaijani economy. All this meant cold, dark conditions, deforestation, worsening of the ecological situation in the republic and it partially led to migration from Azerbaijan.
Thus, the main conclusion is that integration between the Caspian region countries in the sphere of gas and oil industry took place in the Soviet times.
Ismail Agakishiyev, the head of the Center for Caucasian Studies of the Russian State University for the Humanities.
