An Energetic Future
An Energetic Future
The country has long been deeply involved in one of the world’s most important industries – energy. Azerbaijan’s capital of Baku was home to one of the world’s first oil booms in the early 20th century. The production of 2 million tons of oil in November 2017 leaves mark in the history of Azerbaijan as another success of the country.
The Caspian basin is one of the most important energy-rich regions in the world. Soon after independence, Azerbaijan pioneered development of Caspian energy resources under the leadership of the late President Heydar Aliyev, whose vision and foresight transformed both Azerbaijan and the entire Caspian region.
Azerbaijan is also the origination point of one of the most significant pieces of energy infrastructure in the world and one of the most impressive feats of engineering of the late nineteenth-early twentieth century. The strategic Baku-Tbilisi-Ceyhan oil pipeline connects the important energy resources of the Caspian basin with the rest of the global market. It also brings together East and West and builds bridges across regions and cultures.
On September 14, 2017 Azerbaijan and its international energy partners signed the amended and restated production sharing agreement on the Azeri, Chirag fields and the Deep-Water Portion of the Gunashli Field (ACG) to extend its development until 2050. As part of the new contract, U.S. companies Chevron and Exxon will receive a combined 16 percent share (9.57 and 6.79 percent, respectively). The original PSA, which was referred to as the “contract of the century” when it was signed in 1994, established the joint international venture to develop the significant, Deep-Water ACG oil fields, located in the Azerbaijani sector of the Caspian Sea.
The United States played an important supportive role in establishing this backbone of the East-West energy corridor. The pipeline promotes the prosperity of Azerbaijan and its partners in the region and enhances regional security and stability. With the increasing importance of natural gas, a more abundant and more environmentally friendly hydrocarbon, Azerbaijan is working with partners in the region and beyond to expand direct export routes of Caspian natural gas to European markets.
The Southern Gas Corridor, the only source for new natural gas supplies for European markets in the near future, highlights the strategic importance of Azerbaijan’s natural resources, including its major Shah Deniz gas field. A massive international project, Europe’s Southern Gas Corridor, includes the Trans-Anatolian natural gas pipeline (TANAP) and the Trans-Adriatic Pipeline that cross over six nations spanning from Azerbaijan to Italy through Georgia, Turkey, Greece and Albania became operational on December 31, 2020. In addition, the Interconnector Greece-Bulgaria will provide an opportunity for Bulgaria to receive Caspian gas directly.
These pipelines, along with other Azerbaijani Caspian initiatives such as the Azerbaijan- Turkmenistan agreement on joint development of the Dostluq off-shore field, strengthen global energy security and cement Azerbaijan’s role as a key partner in Europe’s energy future.
In recent years, Azerbaijan was named the World Bank’s “Best Reformer,” while the country’s State Oil Fund has championed many best practices and became the first institution in Eastern Europe to receive the prestigious UN Public Service Award for Improving Transparency, Accountability and Responsiveness in Public Service.
President Ilham Aliyev’s vision for the future includes further investment in the energy sector, including a variety of alternative energy projects. This will bolster Azerbaijan’s human capital as well. Revenues from Azerbaijan’s successful energy sector investments are reinvested in schools throughout the country, and support study abroad programs at major international universities for thousands of Azerbaijani citizens.
Among other projects, the revenues also support specialized education facilities such as the prestigious ADA University, which now features the most modern and environmentally friendly campus in the Caucasus.