Ilham Aliyev attended the opening of the Caspian Oil & Gas 2015 exhibition

02 June 2015, 12:00
Ilham Aliyev attended the opening of the Caspian Oil & Gas 2015 exhibition

President of the Republic of Azerbaijan Ilham Aliyev and his wife Mehriban Aliyeva have attended the opening of the 22nd International Caspian Oil & Gas 2015 exhibition at the Baku Expo Center.

Senior advisor of ITE Group Plc Andrew Wood opened the exhibition.

The head of state made a speech at the event.

Speech by President of the Republic of Azerbaijan Ilham Aliyev

- Dear ladies and gentlemen,

Distinguished guests!

My sincere greetings to all of you – welcome to Azerbaijan!

Today I want to congratulate the people of Azerbaijan on the opening of the "Caspian Oil and Gas" exhibition because this exhibition plays an important role in the life of our country.

The first exhibition held in 1994 was a very significant event because at that time Azerbaijan was a newly-independent state. It was after 1994 that Azerbaijan began to take serious steps towards development.

Our independence was restored in 1991. But in the 1991-1993 period, the situation was extremely difficult, the country was gripped by the crisis – political, economic and military. The economy was paralyzed, while industrial production, including oil, experienced a decline. Therefore, the first exhibition in 1994 somewhat introduced Azerbaijan to the world.

I want to thank the organizers of the exhibition. For 22 years they have been organizing this exhibition, demonstrating Azerbaijan’s growing energy potential to the world and actively working in partnership with us to ensure an even more rapid development of Azerbaijan.

As already mentioned, the exhibition is attended by more than 300 companies. This suggests that although the first exhibition was held 22 years ago, the interest in it has not shrunk and Azerbaijan continues to display its capabilities to the world.

In 1994, after the first exhibition, a new oil strategy of Azerbaijan emerged. Launched at the initiative of great leader Heydar Aliyev, the new oil strategy of Azerbaijan has provided successful development of our country to this day.

In September 1994, a historic agreement, the "Contract of the Century", was signed, paving the way for major foreign investments in our country. If that historic step had not been taken in 1994, it would be very difficult to imagine the development of our country today.

In those years foreign investors believed in us despite the fact that Azerbaijan was considered a very risky country at the time. Foreign investment, excellent conditions for investors, as well as the protection of Azerbaijan’s national interests in all contracts signed, were the main conditions for this successful cooperation. The interests of investors, the state and the people of Azerbaijan coincided. It is this wonderful spirit of cooperation that provides for the successful development of Azerbaijan not only in the oil and gas sector, but also in all other spheres today. The experience we have gained together with foreign partners in the oil and gas industry allows us to attract investment to other areas, successfully cooperate with foreign companies and ensure a comprehensive development of our country.

The "Contract of the Century" was a contract of the 20th century. Today we are already implementing a contract of the 21st century. The Southern Gas Corridor is a contract of the 21st century. It is the contract signed in 1994 and the successes achieved later that made today's realities possible. In 1996, an international consortium was awarded a contract for the Shah Deniz gas field. The gas factor did not account for a lot in the oil and gas sector of the world at that time. The energy security of countries was not directly related to gas resources at the time.

The Shah Deniz gas field is one of the largest fields in the world. Its development provides the resource base of the Southern Gas Corridor. Prior to that, oil and gas pipelines Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum and Baku-Supsa were built. Thus, for the first time in history, the Caspian Sea was linked with the Black and the Mediterranean seas through a diversified network of pipelines. It was also a historic event. The partnership of the Caspian Sea, the Black Sea and the Mediterranean Sea emerged. This cooperation began to manifest itself in other areas. Today, it is through this corridor that the Baku-Tbilisi-Kars railway, a major infrastructure project, is being built. If we had built our energy policy incorrectly, this probably would have been impossible.

Thus, the work done in the late 1990s and the opening of the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum oil and gas pipelines in the early 2000s, of course, were great historic achievements. These pipelines allowed Azerbaijan the opportunity to receive major currency reserves. By rationally using these resources, we channeled them into the main spheres of our country. People’s well-being has improved and the economic development of our country was ensured. In the last 10 years the Azerbaijani economy has been developing at the fastest pace on a global scale – it has increased by 300 per cent. At the same time, the country has implemented the planned infrastructure projects and resolved social issues. By implementing sound economic policies, we have been able to significantly reduce our dependence on oil.

Today, the oil factor accounts for only about 30 per cent of our gross domestic product. Thus, we have made great strides in diversifying the economy.

Underlying all this, of course, are major investments made in our country in the 1990s and 2000s. Thus, we are much less dependent on the oil factor in the economic sphere today. This is why our economy has grown by more than 5 per cent this year, even though oil prices have fallen almost in half. So the diversified development of our country and the stability of our economy are a reality. Today, our main goals, of course, are not related to the oil and gas sector. The main tasks are to diversify the economy, to further reduce dependence on the oil factor, to improve the welfare of the Azerbaijani people, to realize the outstanding major infrastructure projects and thus to create an even more solid foundation for long-term development. In addition, the major objectives facing us in the energy sector, of course, will be met because there is a very strong foundation for that. I want to reiterate that international cooperation in the oil and gas sector today shows that Azerbaijan's cooperation with foreign partners rests on a very sound foundation. Here I want to emphasize the relationship between SOCAR and BP. BP is our main partner, a company that has made very large investments. BP is the leading foreign investor and a partner in the realization of both the Contract of the Century and the Shah Deniz project.

The SOCAR-BP cooperation on other projects continues, and this cooperation has a history of more than 20 years.

The SOCAR-BP cooperation will be continued for decades to come. It benefits both our state and foreign partners. Such is the wonderful atmosphere in Azerbaijan. All foreign investments are adequately protected. As you know, all oil and gas contracts are approved by parliament and acquire the force of law. This, of course, further enhances investor confidence in us.

Today, in hindsight, we can say with pride that Azerbaijan has adequately and timely met all the challenges facing it in the energy sector. The Baku-Tbilisi-Ceyhan oil pipeline, the Baku-Tbilisi-Erzurum gas pipeline, the development of the oil and gas fields of Shah Deniz, Azeri-Chirag – each of these projects in itself is a major energy project. Along with this, the realization of the Southern Gas Corridor has begun. This is also a historic event. I should note that while implementing this project, Azerbaijan has once again demonstrated its leadership role. As you know, the gas transportation route from the Caspian basin to Europe was a topic of discussion for many years, and Azerbaijan took part in these discussions. But seeing that these discussions do not lead to specific results, we put forward our own initiative, and in 2012 Turkey and Azerbaijan signed an agreement on the TANAP gas pipeline project. After that the process went faster. The Trans-Adriatic Pipeline was selected as the main export route to Europe, and the implementation of the Southern Gas Corridor was launched. This signaled the start of the Shah Deniz-2 project.

We have achieved all of these successes over the past three years. I remember speaking at the exhibition last year, exactly a year ago, and saying: I am sure that at the next exhibition we will report on new successes to our people. And it is the case. Look! Since the previous 21st exhibition, the ground-breaking ceremony of the Southern Gas Corridor has been held in Baku, at the Sangachal Terminal. In fact, this took place on 20 September, the date when the "Contract of the Century" was signed. It was an event of great symbolic significance. After that, on the initiative of Azerbaijan, the first meeting of the Advisory Council of the Southern Gas Corridor was held in Baku in February of this year. The event was joined by senior officials of all participating countries of the Southern Gas Corridor, as well as the Vice President of the European Commission and other officials.

In March, we launched the TANAP project in the Turkish city of Kars. Please note that all these events occurred over the past year, i.e. since the previous exhibition. The Southern Gas Corridor is already a reality and is being implemented. I am convinced that the work on the expansion of the South Caucasus gas pipeline, which essentially means a new pipeline, and the implementation of the TANAP project which will be commissioned in three years, will be implemented in a timely manner. Thus, Azerbaijan will be able to transport gas from Shah Deniz-2 to both Georgia and Turkey. At the same time, I hope that no problems will arise in the implementation of the TAP project. I believe that all parties need to show great responsibility, because it is our common cause. The discussions held during the meeting of the Advisory Board of the Southern Gas Corridor, which was held in Baku on Azerbaijan’s initiative in February of this year, and the press statement adopted in the end indicate that all parties involved are aware of their responsibility. The statement highlighted the special leading role of Azerbaijan.

Therefore, I believe that the greatest need for the implementation of this project is felt in the coordination work. I talked about this at the meeting of the Advisory Board. This project requires a high level of mutual confidence. All participating countries have to persevere and no-one should seek additional benefits, because everything is obvious. All contracts have been signed, all parties, companies and countries participating in this global project will reap large benefits. Of course, now we come to a new format of cooperation. A trilateral format involving Azerbaijan, Georgia and Turkey emerged earlier, and we are working very effectively. Three fraternal countries have implemented all projects in close cooperation. Today, the format is expanding, as new players are joining the project. The members of the Southern Gas Corridor are Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and Italy. At the same time, memorandums relating to the participation of a number of Balkan countries in the Southern Gas Corridor have been signed. So look how much our circle is expanding. On the one hand, it is a huge advantage. On the other, of course, at certain stages there may be some questions. All these issues should be discussed and resolved in the conditions of friendship and mutual understanding. I want to say again that there should not be and I am sure there won’t be any artificial barriers between us. In this case we will implement the TAP project in a timely manner. Thus, we will start transporting Azerbaijani gas to Europe. It will be a historic event both for us – because we will gain access to a very large gas market – and for European consumers, because they will receive large volumes of gas from an alternative source.

The advantage of the Southern Gas Corridor is that we are talking about a new source of gas. The diversification of routes, of course, is an important issue. Every country, including Azerbaijan, is committed to ensuring that there is a diversified network of pipelines. Currently we have seven oil and gas pipelines. We do not depend on any particular direction. Of course, consumers also want their energy resources to come by different routes. Therefore, the diversification of routes, of course, strengthens the energy security. But if there is no diversification of sources, it does not matter much.

Our advantage lies in the fact that gas will be transported to Europe via a new route. At the same time, the gas will be extracted from a new source, and it is a very large source. The Shah Deniz field, which is currently the only resource base for the Southern Gas Corridor, has gas reserves of 1.2 trillion cubic meters. Currently, Azerbaijan’s proven gas reserves make up 2.6 trillion cubic meters. I am sure that this is not the final figure. This figure will increase, because appraisal work is currently under way on several fields. Several fields are undergoing exploration work, and I am sure we will have even more proven reserves of gas.

Therefore, when people talk about energy security, of course, they usually imply the diversification of routes and sources.

Here, Azerbaijan plays a fairly unique role that is earning a decent assessment. Back in 2011, the European Union and Azerbaijan signed a memorandum on strategic partnership in the energy sector. The processes that recently took place in the energy policy of the European Union suggest that Azerbaijan is perceived as a very important partner and is highlighted in relevant documents. Of course, we are well aware of our role. At the same time, we are aware of our responsibility. Therefore, Azerbaijan manifests itself as a reliable partner for Europe. The future work in the energy sector will raise the relations between the European Union and Azerbaijan to an even higher level. Our intention is to create a format of strategic partnership. After that, each party may determine the long-term strategy, and all the questions, of course, can be resolved through serious coordination.

The ample oil and gas resources and Azerbaijan’s bold policy and steps will redraw the energy map of Europe. This is a reality, and our role will gradually grow. This will strengthen our country. This will bring our country both political and economic dividends and, ultimately, provide a better life for the people of Azerbaijan.

Along with this, as I have already said, we are implementing reforms in the economic sphere. The reforms ongoing in Azerbaijan are highly appreciated by leading international financial institutions of the world. All our economic indicators are at the highest level. According to the Davos World Economic Forum, Azerbaijan is ranked in 38th place in the world in terms of economic competitiveness. Our external debt stands at just 10 per cent and the unemployment rate is 5 per cent. Foreign exchange reserves account for 75 per cent of the gross domestic product, maybe even more. Despite the sharp drop in the oil price, Azerbaijan provides its economic development. In four months of this year, the economy grew by 5.3 per cent. Our non-oil sector grew by almost 7 per cent.

Azerbaijan also hosts major and prestigious international events. Ten days later, Azerbaijan, Baku will host the first European Games in history. This is a historic event. We prepared for these games in just two years. In a short period of time we have organized games that will be held at the level of Olympic Games. It demonstrates the power, the strong political will of our country. This indicates that although we are young as an independent country, we are already capable of securing a firm place on the world map.

I wish the exhibition participants every success. I want to express my gratitude to the organizers of the exhibition again. I am confident that the exhibition will be held at a high level and our partnership with international companies will be successfully continued. Thank you.

Lord Mayor of the City of London Alderman Alan Yarrow read out a message of congratulations on behalf of British Prime Minister David Cameron.

Then Deputy Prime Minister of Poland Janusz Piechocinski and Minister of Oil of Iraq Adil Abdul-Mahdi addressed the ceremony.

President Ilham Aliyev and his wife Mehriban Aliyeva then viewed the pavilions of the exhibition.

It was noted that this year the exhibition features 315 companies from 27 countries, and its thematic sections include innovative technologies in oil production and transporting energy resources; securing oil and gas storage systems; opportunities for developing international cooperation, and many others.

For the first time ever, Caspian Oil and Gas will host the art exhibition “The Nobel Brothers and Baku Oil”.

Iteca Caspian LLC and its British partner ITE Group Plc are the organizers of the exhibition.