For many years one of the main problems for the Soviet oil industry was the utilization of the associated gas. Americans solved this problem, and "Daniz" started partnership with the Houston company Eastern Credit Limited Inc. The first plans involved utilizing the associated gas. The volume of it reached 1.5 billion cubic meters. At first, it was planned to use it for production of gas fuel, which was in demand on the markets.
The second big task of "Daniz" was the dismantling of the hydro-technical constructions whose term of exploitation had expired. Local technology could not solve this problem. There were negotiations about the involvement of foreign firms.
The third task was increasing oil extraction in the working drills, which was constantly decreasing. The decrease in oil extraction and the under-exploitation of the drills with oil due to the lack of necessary equipment was common all across the Soviet Union, Azerbaijan included. In the previous five years extraction of oil by "Azneft" decreased by one million tons and gas extraction fell by 334 million cubic meters. The numbers of working drills decreased by 329. Broken equipment resulted in "Azneft"not fulfilling the plan for 1990 by more than 476 tons of oil.
The task of increasing oil extraction could have been solved only with the newest technology, which was unavailable in the USSR. Many drills were not used because there was no proper underwater equipment. There was an agreement that the foreign firms would provide the necessary equipment in exchange for oil. This leads to the conclusion that the involvement of the foreign firms was already possible in 1990. The possibility of using the Caspian Fleet to transport the freight of Western companies was also a subject of discussion, as it would have allowed for an increase in the influx of foreign currency into the republic. There were two directions of the use of the fleet. The first one was transporting the products of the Association to Western consumers. The second one was renting the ships of "Daniz" to foreign companies. This was encouraged by good offers from American, British and Turkish companies that guaranteed the payments in foreign currency. The negotiations were conducted with the Turkish company "Balis" and the British firm "Lenchi".
The decision of the Azerbaijani Government to nationalize the Caspian Fleet created favourable conditions for the free activity of the respectable bodies and guaranteed that the currency income would settle in Azerbaijan. The nationalization of the steamboat fleet increased the interest of the government in the treaty. The Caspian Fleet included cargo ships, four shipyards, Baku port, dozens of smaller servicing enterprises, several hundred houses, hospitals and kindergartens for the employees' families. By the autumn of 1991, the Caspian Fleet was the only organization providing foreign currency. The value of this giant was about 1 billion roubles. International oil companies were interested in the Azerbaijani sector of the Caspian Sea because of its infrastructure and the long experience of oil extraction. From the 1960s the floating drilling stations and ships were used for exploration and drilling. Their predecessors were the double drilling barges that were used even before World War Two. Their possibilities were limited – they could only work in shallow water and without wind and waves. Their crews were rarely lucky. The optimal depth for the later Soviet floating drilling equipment was 140 m. The storms were not dangerous for them. Before 1990 "Kaspmorneftegazprom" had 12 floating drilling stations that could drill at depths from 70m to 6000 m. They were drilling not only on the Azerbaijani coast of the Caspian
Sea, but also in the Turkmen sector.
This use of the "Kasmorneftegazprom" stations in the other sectors brought significant income to the organization. In August 1990 it concluded a treaty with the National Iranian Oil company on the use of the "Khazar-1" station, which was the first to start the search for oil on the Iranian coast. By December 1990 it was drilling at a depth of 4240 m, when the planned depth to reach was 6000m.
