SOCAR invited independent experts from Western Europe, the US and Canada to work on the contract. The negotiations continued in London, but the conditions of the contract created in London were rejected by Azerbaijani president as contradicting the interests of the republic. The new principles were created by SOCAR together with the famous oil experts and scientists. On February, 4, 1994, after the presidential apparatus studied them in detail, the president allowed to continue the negotiations on the basis of these principles that considered both the interests of Azerbaijan and the consortium.
The negotiations resumed in February 1994 in Baku and later, following the request of the of foreign companies, continued in Istanbul and Huston and were completed in June 1994.
The final stages of negotiations were particularly difficult. Sometimes they were at the verge of the failure. “We could not agree with some conditions because we believed them unacceptable for the national interests of the country. We said to the foreign corporations that they protect the interests of the private companies, while we protect the interest of the entire country and Azeri people. If you commit a mistake, it will affect only one project of the company. If we commit a mistake, it will harm the entire Azerbaijani nation. To put it differently, we could not afford a mistake”, noted the head of the Azerbaijani delegation at negotiations Ilham Aliyev.
Natik Aliyev prepared a report and gave it to the president of the republic. Later Heydar Aliyev noted that he took the decision about the preparation for the contract on the basis of this report. The sides of the negotiations, the leadership of SOCAR and the oil consortium agreed to conclude a contract on the basis of these principles. Everybody confirmed that the contract could be concluded on the basis of the Istanbul negotiations. In June 1994 the sides signed a document about the completion of negotiations and the beginning of the contract preparations on July 21, 1994. The delegation of SOCAR went to Huston where for 45 days they worked on the contract project. The last round of negotiations was supposed to last for three weeks but in fact it took one and a half month.
The contract for 10 years with the possible prolongation presupposed the development and the joint exploitation presupposed of two oil deposits hundreds million barrels of oil. This demonstrated the readiness of Azerbaijan to develop its resources with foreign investments. The new economic strategy reviewed the role of oil and gas sector in the development of the country. The processes of negotiations entailed significant difficulties. Heydar Aliyev remembered that “these difficulties were overcome and the contract was prepared thanks to the competence of the representatives of SOCAR”.
The most difficult issue in the negotiations was signing the contract without the final resolution of the legal status of the Caspian Sea. The US oil corporations did not want to risk in this question, as the security of their billion investments was not secured. The situation was saved by the visit of Ilham Aliyev to Washington and hi 8-hour talk with the vice-minister of energetics. Ilham Aliyev managed to persuade Bill Life and receive the approval for the contract without the final decision on the legal status of the Caspian sea. Under the state guarantee the US companies agreed to sign the contract. The settlement of the legal status of the Caspian Sea has been and remains a very complex issue. At that time, Iran, Turkmenistan and Russia held conflicting positions. The question of the division of the Caspian Sea on the principle of sectoral division was later settled between Russia,Kazakhstan and Azerbaijan.
However, disputes with Iran and Turkmenistan are still ongoing. However, let us go back in 1994: a contract developed by partners, which included 31 points and 21 annexes on 200 pages, passed all the required procedures for coordination at all levels of power. N. Aliyev presented a report to the president of the republic. The discussion of the report was attended by National Assembly deputies, the heads of the Cabinet of Ministers and senior officials of the presidential administration. Only after the discussion ended, a presidential decree No. 206 "On the Possibility and Necessity of the Contract" was signed on September 14, 1994. The signing of the contract was scheduled for September 20, 1994. Aliyev later wrote: "certainly, the proposed draft contract did not meet all our needs. It is well known and I have repeatedly stated that ... We have to take from the oil wealth the maximum benefit for the people of Azerbaijan. I have always taken this principle as the primary one. Concerning these principles, of course, not all our wishes are reflected in this project. Our desire to get more benefit from the anticipated project is natural. But it is well known that in joint cooperation all the parties wish to gain their benefits, all parties must receive income. If there is no mutual benefit, then of course no agreement or contract will be signed”.
