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.
One of the most dynamic areas of the activities of the LUKOIL company was the opening of gas stations.6 They differed from those built in Soviet times in terms of design and comfort. The first LUKOIL gas station in Baku made a great impression. The gala opening of the gas station complex was attended by Azerbaijani prime minister Guliyev, vice-president of the Russian government A. Bolshakov, president of LUKOIL V. Alekperov and the head of SOCAR, H. Aliyev. The gas station built by LUKOIL was a large investment in the economy of Baku. In subsequent years, LUKOIL increased the number of these complexes and occupied an honorary position in the oil market of Azerbaijan.1 The total cost of the project amounted to $1.7 million. 2 The gas station is in line with world standards and is capable of serving up to 2 thousand cars a day. It consists of a gas station, a car wash, an auto service shop, an auto parts store, a restaurant, a café-bar and a supermarket selling Russian goods. 3 The construction of one auto complex on average costs about $1 million.
By January 1998, LUKOIL bodies had invested about $145 million in the Azerbaijani economy. In 1997, the Azerbaijani budget received 24 billion manats from taxes paid by LUKOIL. The Azerbaijani budget of the company amounted to $90 million in 1998. 4 A distinctive feature of LUKOIL is that it has never limited itself to the production and sale of crude oil, but always tries to organize a full production cycle. On January 28th 2000 in the Khatai district of Baku, in the so-called "Chernyi Gorod," the opening of an oil depot of LUKOIL took place. It occupied an important place in the economic chain of oil refinement. 5 The control system of parameters was installed in the oil depot by Neftegazavtomat. There was no analogous installation in any republic of the CIS at the time. The equipment at this oil depot was installed by such well-known companies as Fisher Rosemount and Universal Electric. Without leaving the control room, an operator is informed of the status of each tank. Computers capture even the smallest leak. The construction works lasted for nine months. 6 The LUKOIL company implemented the project of returning Baku refineries back to life with raw materials supplied by customers. The oil was purchased from foreign companies and joint enterprises. 7 According to the agreement with the government of Azerbaijan, 8 LUKOIL installed a satellite communication terminal and reconstructed the Baku ATS-929.
The second major contract signed by the Republic of Azerbaijan was the oil contract on the Karabakh field (the contract was signed on November 10th 1995). 1 The word "Karabakh" recalls the most acute territorial problem of Azerbaijan and the hope of resolving it with the help of big companies of major countries of the world. In this case, Mr. Aliyev made a bet on LUKOIL, i.e. on Russia. LUKOIL had a stake of 32.5%, the Italian company Agip and the American company "Pennzoil" had 30% each and SOCAR had 7.5% in the contract. 2
In fact, the role of LUKOIL was even more significant due to previous agreements on cooperation with Agip. 3 The Russian company also acquired the status of an operator, which provided it with the formal authority to influence decisions. The reserves of the Karabakh field were estimated at 85 million tons, production 4 at 7 million tons per year. On February 14th 1996 the National Assembly of the Republic of Azerbaijan adopted a law on the future oil structure of Karabakh. It was the second contract of SOCAR signed with foreign companies which became a law .5 As the chairman of the National Assembly, R. Guliyev, noted, the participation of LUKOIL, Agip, AMOKO and BP/Statoil in the contract meant political recognition on the part of leading states of the independent Azerbaijan, which is capable of providing conditions for the implementation of the contract. The advantage of the Karabakh contract for the Republic of Azerbaijan was the fact that the country did not spend any money on exploratory works. These costs were covered by foreign participants. 6 The full name of this law of the Azerbaijani Republic is "On the resolution on the acceptance, approval and implementation of the agreement on the exploration, development, production and distribution of profits from the prospective structure of the "Karabakh" field and surrounding territories in the Azerbaijani sector of the Caspian Sea between the State Oil Company of the Azerbaijani Republic and the companies LUKOIL International LTG, Agip Azerbaijan BV, LUKAgip NV, the Pennzoil Caspian Development Corporation and the affiliated commercial company SOCAR."
The Azerbaijani political elite perceived the involvement of LUKOIL in contracts differently. The opposition regarded it as pressure from Moscow. The former head of parliament and chairman of "Musavat," Isa Gambar, even threatened that, if Elchivey's government returned, the conditions of the contract would need to be revised. 2 Despite everything, the contract was signed on November 10th 1995, according to the decree of the Azerbaijani President of August 4th 1995. A corresponding law passed by the National Assembly was signed by the President of Azerbaijan on February 13th 1996. 3
The new agreement evoked the unresolved problem of the status of the Caspian Sea, and it happened each time a contract was signed on one or another Caspian field. The absurdity of the situation was that all the Caspian countries were already involved in these contracts. Oil workers continued to work, while politicians continued their endless debate.
