Publication: Monitor Volume: 3 Issue: 214

International oil industry leaders and senior government officials from nearly 20 countries yesterday attended the official inauguration of commercial production at Azerbaijan’s Chirag oilfield, the first to come on stream as part of the "project of the century." On the Chirag-I offshore platform, Azerbaijani president Haidar Aliev switched on the valve that opened the flow of oil into the undersea pipeline to the newly built shore terminal at Sangachal.

The $8 billion investment project also comprises the Azeri and Guneshli offshore oilfields, which are due to come on stream within the next five years. The three fields are being developed by the Azerbaijan International Operating Company (AIOC), a consortium of 12 corporations led by Amoco, Unocal, and Exxon of the U.S., British Petroleum, and Norway’s Statoil, with British Petroleum and Amoco serving as project operators. The contract area, situated some 120 kilometers offshore and covering approximately 450 square kilometers, at a drilling depth of some 3,000 meters, is estimated to contain at least 500 million tons of oil and 90 billion cubic meters of associated gas. Output of "early oil" is planned to rise from 2 million tons in 1998 to 5 million tons by the year 2002. Starting in 2003, the "main oil" is to come on stream and grow to some 40 million tons annually by 2007. (International agencies, Turan, November 12-13)

Signed in September 1994, AIOC’s contract is the first and thus far the largest among the nine contracts, each worth between one and several billion dollars, signed by Azerbaijan with international oil companies in the last three years. These projects, as well as those already underway or planned on the Caspian shores of Kazakhstan and Turkmenistan, may open a new historic era for the Caucasus-Caspian region, for countries further afield in the former Soviet space, and for world energy economics. Political and oil industry leaders suggested yesterday that November 12 may well mark the symbolic beginning of that new era. However, that potential remains largely dependent on the choice of the principal export route.

Politics and Perceptions in Tajikistan.