Petroleum industry in Azerbaijan
[2] The company is run in an opaque manner, as it has complex webs of contracts and middlemen that non-government watchdog organizations say have led to the enrichment of the country's ruling elites.
[5] The Turkish scientist and traveller Evliya Çelebi (1611–1683) reported that "the Baku fortress was surrounded by 500 wells, from which white and black acid refined oil was produced".
The first detailed description of the Baku oil industry was made by Engelbert Kaempfer, Secretary of the Swedish Embassy to Persia (Iran) in 1683.
Haji Kasimbey Mansurbekov, in 1803, for the first time in the world, began sea oil extraction in Bibi-Heybat bay from two wells in 18m and 30m away from coastline.
As a result of otkupschina monopoly and the absence of growing demand, annual oil production in the first half of the 19th century remained unchanged at 250–300 poods (4–5 thousand tons).
In 1844 – a report detailing ideas developed by Nikolay Voskoboynikov (1801–1860) on drilling for oil rather than digging pits by hand is presented to the Russian government on the Caucasus (Baku region) by Vasily Semyonov (1801–1863).
There, kerosene was distilled in open stills, and then transported to Russian markets, especially St. Petersburg, via ship over the Caspian Sea and Volga River.
The Nobels built Villa Petrolea as a company town that included apartments, houses, schools, and libraries, while employees were given profit-sharing and free education.
Administrative, social and municipal institutions were established which, in turn, made decisions about the city's illumination, roads, streets, buildings, telephone stations, and horse-drawn trolleys.
There were other entrepreneurs with lower rank who also made contributions to industrial development of Azerbaijan, such as Haji Baba Alekperov, Agasibek Ashurbeyov, Ali Bala Zarbaliyev, Kerbalay Zarbaliyev, Huseyin Melikov, G. Bagirov, G. Aliyev, S. Zminov, Amir-Aslanov brothers and others were owners of oil-field areas in Sabunchi, Balakhani, Romani, Shubani, Bibi-Heybat.
Scientists like Ivan Gubkin, Golubyatnikov and Uskin described the productive series deposits of Azerbaijan and the process generation for the first time in 1916.
The first successful oil tanker in the world – a refurbished metal ship called Zoroastr – was built in 1877 in Sweden by Nobels.
The relative calm of the early 1910s was disrupted by World War I, when production of oil steadily decreased to reach the lowest level of just 65,000 bbl/d (10,300 m3/d) by 1918 and then dropped even more catastrophically by 1920.
The scientific exchange started with the US, where visitors from Baku were seconded to oil-fields in Pennsylvania, Oklahoma, California, Texas, learned new methods of well deepening and exploitation.
The 1942 German offensive codenamed Case Blue saw a determined attempt to seize the oil fields in a large-scale advance into the area, hampered by a split of forces to also attack Soviet supply lines along the river Wolga.
The German military command planned a sudden landing of troops in Baku so that the Soviet authorities could not destroy the oil fields.
Control of oil supply from Baku and the Middle East played a large role in the events of the war and the ultimate victory of the Allies.
[17] Oil production from the existing fields started to decline after World War II, as a result of catastrophic over-production and under-investment.
As far back as 1864, a German mineralogist and geologist Otto von Abich surveyed and reported structures present on the seabed of the Caspian.
As a result of modern methods of exploration being employed, four new multireservoir fields were opened in the Caspian at a depth of 200 meters: Gunashli (1979), Chirag (1985), Azeri (1988), and Kapaz (1989).
Originally, AIOC was composed of eleven major international companies: BP (UK), Amoco (U.S.), Lukoil (Russia), Pennzoil, (now Devon of U.S.), Unocal (U.S.), Statoil (now Equinor of Norway), McDermott (U.S.), Ramco (Scotland), TPAO (Turkey), Delta Nimir (now Hess Corporation of U.S.), and SOCAR (Azerbaijan).
AIOC's first president was Terry Adams (UK) of BP, the company that operates the offshore oil platforms and the onshore Sangachal Terminal.
The oil is pumped from the Sangachal Terminal near Baku, via Tbilisi the capital of Georgia, to Ceyhan, a port on the south-eastern Mediterranean coast of Turkey.
[19] The BTC pipeline is expected to make a major contribution to world energy supply with its more than 1 million barrels (160,000 m3) per day capacity.
Stage 1 of Shah Deniz project is now complete and supplies Georgia and Turkey with 8 bcma of natural gas via the South Caucasus Pipeline.
[28] The group chief executive of BP, Bob Dudley stated: “Over the past 23 years, the Contract of the Century has truly transformed Azerbaijan, energy supplies to Europe and all of us who have worked so hard to make it a success.
Today's contract is perhaps an even more important milestone in the history of Azerbaijan as it ensures that over the next 32 years we will continue to work together to unlock the long-term development potential of ACG through new investments, new technologies and new joint efforts to maximize recovery.
The final investment decision on the Azeri Central East (ACE) platform, which is planned to be built on the Azeri-Chirag-Gunashli (ACG) block, has been adopted at the signing ceremony.
[43] The company has been described to run in an opaque manner, as it has complex webs of contracts and middlemen that non-government watchdog organizations say have led to the enrichment of the country's ruling elites.
[44][45] Critics have described projects funded by SOFAZ as useless, and noted that contracts have been awarded to companies owned by the ruling Aliyev family in Azerbaijan.
