Doing Business in Azerbaijan 2009 - Azerbaijan Export ...

80 DOING BUSINESS IN AZERBAIJAN
Caspian sea oil rigs.
Oil & Gas (With Regulatory Framework)
By the late twentieth century with the discovery of huge oil
reserves, Azerbaijan, which at that time was a part of tsarist
Russia, quickly became one of the oil industry centres of the world,
providing for approximately half of the world’s oil supply.
A number of foreign oil companies and powerful investors,
including Shell, Rothschild, the Nobel brothers and many others
had interests in Azerbaijan.
In the late twentieth century, after gaining its independence from
Soviet Union the country again became the hot spot for the oil men
of the world. The Azerbaijani govern ment invited the largest
international oil companies such as British Petroleum, Amoco,
Total, Elf, Lukoil, Itochu and others to jointly develop the previously
closed hydrocarbon reserves of the Caspian basin.
Now the country is on the verge of its’ second oil boom. Azerbaijan
attracted a large number of foreign investors to operate in oil fields
in accordance with Production Sharing Agreements between the
govern ment and the prominent western companies.
By now, most of the global oil & gas corporations either operate or
are present in Azerbaijan: Azerbaijan’s oil production (total liquids)
reached 1, 000, 000 barrels per day (bbl/d) in 2008 (SOCAR) and the
remainder mainly comes from an international consortium.
Azerbaijani International Operating Company (AIOC)
Around 60% of Azerbaijan’s oil output comes from the State Oil
Company. Its portion, however, will decrease as the international
contracts are developed.
AIOC’s main offshore field known as Azeri-Chiraq-Gunashli (ACG)
has proven crude oil reserves of 1 billion tons (between 40%-70%