The discovery of the unique Oil Rocks (Neft Dashlary) offshore field in 1949 became an important event in the development of the oil sector in Azerbaijan: major offshore facilities equipped with high-quality (at the time) domestic equipment were created in the open sea at a distance of up to 100 km from the shore in a relatively short period of time. At that time, the Oil Rocks field was a major offshore field in the world in terms of both reserves and oil output. It is indicative that hundreds of thousands of wells have now been drilled at the bottom of the ocean and many Western European and North American countries “are quenching” their energy thirst with oil and gas extracted in the North Sea, Canadian and Brazilian shelves, in the Gulf of Mexico and so on, foreign specialists who come to Azerbaijan are still interested in Oil Rocks – a unique town built on piles in the Caspian Sea about 60 years ago.
We think that interest in this first town in the world built in the sea is not accidental. The matter is that for all countries that are extracting oil and gas on the continental shelf Oil Rocks is something like an extraterrestrial space station which will be built in the future to become a support base for exploring the Universe. Back in the 1960s when the first streets of Oil Rocks emerged in the Caspian Sea, foreign press wrote that “Soviet oilmen are writing a new book on the history of the development of our planet`s riches and are writing it in a language that has not been known until now. Time will come and people will start to understand this language and delightedly read the first pages of the chronicles of the development of the continental shelf”.
Brief Hıstory of Oıl and Gas Recovery in Azerbaıjan
Azerbaijan is a recognized country as one of leaders on oil recovery in the world being enriched with material values and spiritual knowledge and experienced in oil production.Information about crude oil recovery in Azerbaijan was repeatedly mentioned in art works of scientists and travelers of the early Middle Ages and it was noted that such uncommon product would generate a significant income.But at that times oil was only used for fuel, medical and military purposes. In the XVIII-XIX centuries the industrial revolution caused a sharp rise in oil demand and transformed it into a strategic output being essential for development of the country. Subsequently it leaded to an oil boom all over the world. A flow of foreign investments occurred in oil production of Azerbaijan. Having ancient oil extraction traditions Baku city became a center of invention and initial application of high technologies in boring, oil recovery and refinery. For the first time in the world oil wells were drilled in Bibiheybat in 1847, then in Balakhani by application of technique. In 1901 Azerbaijan took the first place in the world by producing 11.5 mln tons of oil (in the same year 9.1 mln tons of oil was produced in USA).
In the history of (with the exception of 2009) Azerbaijan Republic 23.5 mln tones of oil-to the maximum extent was extracted in 1941 and it constituted 71% of overall oil output of former Soviet Union. Such high production ensured the victory of the Soviet Union in Second World War and promoted more the particular role of oil resource in solution of many problems faced with economics. Offshore oil recovery originated in Azerbaijan and exploration of fields such as “Gurgan-deniz”, “Pirallahi and Chilov adasi” started one after another in Azerbaijan sector of Caspian Sea. Discovery of offshore oil field “Neft Daslari” 40 km far from shore and 90 km from Baku on 7 November 1949 led the Republic of Azerbaijan and Caspian Sea to reach worldwide fame.
At the end of 1970 s 1980 years. At the depths of 80-350 metres currently worldwide-renown fields such as “Azeri”, “Chirag”, “Kapaz” and “Gunashli” field were discovered.
Signing of Agreement on “Joint development of” “Azeri”, Chirag” and “Gunashli” fields (deepwater sections) and production sharing,” then socalled “Contract of the Centry” was implemented on 20 September 1994. 11 major oil companies representing 8 countries of the world signed this Contract.
Singning of such Contract with the oil companies of the largest and advanced countries was incarnation of wise policy, vision and political will of National Leader of the Azeri people Heydar Aliyev. The Contract almost gained the trust of the whole world countries in Azerbaijan and thereafter enabled a flow of the dominating and well-known oil countries into our country. Later the Republic of Azerbaijan was thrown open to foreign investments.
31 contracts “Production Sharing Agreement” have been signed between the SOCAR and foreign oil companies since. 17 agreements out of these cover Azerbaijan sector but 14 agreements cover onshore fields of the Caspian.
Foreign investment to the extent of 32.4 billion USD was laid on nationwide oil industry up to 01 Janurary, 2010.