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 difficult situation around the Azeri-Armenian conflict required immediate decisions. Aliyev supported the invitation to join the Commonwealth of the Independent States. It was clear that many things depend on Russia that was going through a difficult period in the internal politics and already forced to join several peace-making missions in the post-Soviet space. It was clear, however, that the interests of the Western states could not be ignored. Relations with Turkey received a new importance in the light of making contacts with foreign countries and companies. Since the moment when Azerbaijan got independence, Turkey was providing it with the moral, political and economic support. Most experts agree that that the growth of the Turkish activity in the region and in Azerbaijan in particular was supported by the USA. There is also an opinion that the conflict between Armenia and Azerbaijan was provoked by British Petroleum hoping to gain influence in the region on the expense of the weakening Azeri elite. Azerbaijan had to navigate between the interests of Russia and Western countries. That is why Azerbaijan was attempting to strengthen its relations with the West.
On May 3, 1994 in Brussels the document Partnership for the Peace was signed. In April 1994 the US government activated its support to the oil strategy of Azerbaijan. This was stressed by the vice-president of the State Oil Company of Azerbaijani Republic (SOCAR) Ilham Aliyev during his visit to the US: “Of course, nothing changes in a moment. But the last 4-5 months we receive the information from the US that confirms their support”. Ilham Aliyev was appointed the Head of SOCAR in May 1994.
One should take into account the strong influence of the Armenian lobby in the US that was not interested in the close relations between the American and Azerbaijani government. This factor resulted in numerous visits of Ilham Aliyev to the US. Gradually the image of Azerbaijan in the American press changed – before it had been presented as an aggressor despite the loss of the territories. More objective evaluations of the conflict appeared in press in spring 1994. Ilham Aliyev noted, that he believes that “despite the activity of the Armenian lobby, American policy would change – the contract signed with BMB company shows that Azerbaijan is open to the US”.
The dominant opinion in the historiography is that the first contract between the US and Azerbaijan was signed in September 1994. In fact it happened earlier. The first contract between Azerbaijan and the American corporation United BMB was signed on August 10, 1994 in Washington by the vice-president of SOCAR Ilham Aliyev. During the negotiations about “the contract of the century” Heydar Aliyev consulted the experts of SOCAR that following the presidential decree were empowered to conduct the negotiations. Aliyev himself was very competent in the economics and the oil economics in particular. He supervised Azerbaijani economy between 1969 and 1982 and afterwards until 1987 the economy of the USSR. The contract was checked by the specially created committee of the international experts and the chief specialists of SOCAR, including Ilham Aliyev. This team had to consider the active contract between Azerbaijani government and British Petroleum and Statoil that gave to these companies the exclusive right to negotiate about the oilfields in Chirag and Shahdeniz. When that treaty was signed, these companies paid Azerbaijan a 30 million dollar bonus – 10 million for Shahdeniz and 20 million for Chirag.
The experts analyzed the analogous international contracts and the negotiations with the foreign investors that allowed Azerbaijan to formulate a clear position on the future contract. Meanwhile the chief personnel of SOCAR were reorganized (Natik Aliyev became the president, in 1994 SOCAR got back its functions, etc.) As a result of the Heydar Aliyev’s policy the conditions of the negotiations with the foreign investors changed. Now Azerbaijan was offering only two deposits instead of three, i. e. Azeri and Chirag without Gyuneshli. The parts in the contract were the following: Amoco 24.3%, BP/Statoil 36.7%, Pennsoil/Remco 17%, Unocal 16%, McDermott 3.5%, TPAO 2.5%. Later the project was joined by Delta Oil from Saudi Arabia that bought 15% of the Unocal part (1.68%
in total).
