Azerbaijan celebrates 25th year of Contract of the Century

Azerbaijan celebrates 25th year of Contract of the Century

The Azeri-Chirag-Gunashli (ACG) partnership today celebrated the 25th anniversary of the ACG production sharing agreement, signed on 20 September 1994 between the Government of Azerbaijan and eleven international companies representing eight countries, Trend reports with reference to SOCAR.

This contract, which later became known as the “Contract of the Century”, was extended in September 2017 until the end of 2049.

SOCAR president Rovnag Abdullayev said: “Today we celebrate the 25th anniversary of the PSA on the Azeri, Chirag and Deepwater Gunashli fields, known as the “Contract of the Century”. This contract has played a unique role in the history of independent Azerbaijan. Although shorter than a moment from historical perspective, these 25 years passed in the atmosphere of strenuous day-to-day work. Looking back at this track of success and the magnificence of the projects we’ve accomplished, we’re filled with a sense of pride.

In the last 25 years, the annual oil production has grown fourfold in our country, recovering all branches of economy. Some essential technologies and innovative solutions were applied in the Azerbaijani sector of the Caspian Sea, in order to develop the deepwater fields. Around $265 billion were invested in total in the economy of Azerbaijan during these years, whilst the amount of investment in the oil and gas industry totaled $101 billion with around $36 billion invested by the ACG partners alone in the development of these fields.”

Gary Jones, BP’s Regional President for Azerbaijan, Georgia and Turkey, said: “The 25th anniversary marks an important milestone in the new history of Azerbaijan’s oil and gas industry. It is a historical date for SOCAR, BP and all other partners in the ACG contract.

“What has been achieved by this contract since 1994 is extraordinary. It is with this contract that the massive developments, turning Azerbaijan once again into one of the world’s major energy suppliers and transforming the country’s economy, started. One reason for this success is the extraordinary partnership built here within ACG. And for that we want to pay tribute to President Aliyev, his government and SOCAR. Together we have demonstrated what partnership can deliver.”

Ilham Shaban, director of the Caspian Barrel Petroleum Research Center, also noted that signing of the "Contract of the Century" was a huge achievement for Azerbaijani state in the most difficult geopolitical and economic conditions. "I believe that signing of such a large-scale contract with foreign companies was a huge feat of the Azerbaijani leadership, a feat thanks to which Azerbaijan received $144 billion in net profit. Tax revenues thanks to this project reached to $15 billion, and SOCAR earned another $6 billion due to participation in the contract," he said.

Energy expert Rovshan Ibragimov noted in an interview with Vestnik Kavkaza that the Contract of the Century was vital for geopolitics and geoeconomics of the young Azerbaijani state. "That time was extremely unstable, Azerbaijan faced economic problems, there was an active war in Nagorno-Karabakh - and convincing Western companies to sign this agreement was extremely difficult. Thanks to the work of Azerbaijani leadership, they managed to reach this agreement, and immediately after that many problems of Azerbaijan were resolved, the economic well-being of the population began to grow," he said.

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