Baku, August 10, AZERTAC

President of the Republic of Azerbaijan Ilham Aliyev has attended a ceremony at Baku Deep Water Jackets Plant named after Heydar Aliyev to send a jacket of Garabakh field offshore.

President of the State Oil Company of Azerbaijan Republic (SOCAR) Rovnag Abdullayev and General Director of BOS Shelf company Ikhtiyar Akhundov informed President Ilham Aliyev of the work done.

Garabagh field jacket was built by SOCAR`s BOS Shelf company at Baku Deep Water Jackets Plant named after Heydar Aliyev. The facility is designed for oil and gas exploration and production.

The head of state pressed a button to send the jacket field offshore.

After viewing the jacket field, President Ilham Aliyev gave an interview to Azerbaijan Television.

- Mr. President, the Garabagh field jacket is sailing away today. What can you say about the significance of this event?

- This is a very important event. Offshore work on the Garabagh field begins today. This is a very important stage in the development of the field. This giant facility was built by Azerbaijani specialists in our country and is sailing away today. I am sure that the topsides of the platform will be built on time as well and we will begin full-field development of the Garabagh field.

As a result of the implementation of Heydar Aliyev's oil strategy in the 1990s, a production sharing agreement was signed. Three wells were drilled in this field in the 1990s. However, our foreign partners did not believe in the viability of the Garabagh field, the contract was terminated and the Garabagh field was abandoned. However, our experts were convinced that this field had great potential and life has proved them right. The fourth well drilled this year proved productive and the field was thus fully discovered.

I should also say that this is the first oil field to be discovered in Azerbaijan in the period of independence because the Azeri, Chirag and Gunashli fields were discovered in Soviet times. Shah Deniz and Absheron are gas condensate fields. So this is the first oil field, and this giant jacket is the biggest jacket ever built in the Caspian Sea. Therefore, we can talk about the significance of this project for a long time. Of course, this is a result of our successful policy because even though foreign oil companies have been making major investments in Azerbaijan since 1994, the interest of foreign investors in the oil and gas industry, in Azerbaijan’s oil and gas potential is showing no sign of abating. In fact, it is still growing. I am confident that Garabagh and other fields will be successfully operated and bring great benefits to our country in the coming years.

- This large installation has a very complex and giant structure. How would you evaluate the importance of the engineering and technological parameters of the installation?

- Yes, this is indeed a very complex structure. The weight of the jacket exceeds 16,000 tons and its height is about 190 meters. Considering the fact that the Garabagh field is located in the deep-water portion of the Caspian Sea, then, of course, there was a great need for the construction of such a giant installation. I should also mention that water depths at the location of the Garabagh field is 180 meters. I believe that this is precisely why oil and gas were not produced at the field in Soviet times because we did not have such technologies back then. The Azeri and Chirag fields and the deep-water portion of the Gunashli field remained untouched until the period of independence. Otherwise, all our offshore and indeed onshore fields would have been completely drained and there would be no energy resources left for the development of independent Azerbaijan. Therefore, the fact that no work was carried out on the Garabagh field after it was discovered has been a great gift for independent Azerbaijan, of course. We can carry out this work precisely as a result of the policy we are pursuing now. So this is a giant and very complex facility in technological and engineering terms. I am glad that it was built by Azerbaijani specialists. The vast majority of the work was done by Azerbaijani specialists and workers.

I should also note that about 5,000 people are working at the Deep-water Jackets Factory now. The construction of this giant installation and the jackets used in other projects provides full employment at the factory. I have just enquired and have been informed that the average salary here is about 1,200-1,500 manats. This enterprise requires top professionalism. So this jacket demonstrates our strength again. This is a purely Azerbaijani production and it will serve the Azerbaijani state and people.

- When is production expected to start at the Garabagh field?

- If everything goes according to plan, then I think that first gas and oil should be produced here in two years - at the end of 2022. The oil potential of the Garabagh field is estimated at 60 million tons but I am absolutely sure that this figure will increase at the stage of development. This is indicated by the fact that the Garabagh field is located in the vicinity of Azeri, Chirag and Gunashli fields. The distance is not very large. I remember that when a contract was being drafted for the Azeri, Chirag and Gunashli fields in 1994, foreign partners estimated the potential of these fields at 511 million tons of oil. However, life has shown - and this has now been confirmed - that the potential of the Azeri, Chirag and Gunashli fields exceeds 1 billion tons of oil. Therefore, this and other geological factors provide sufficient ground to believe that the volume of natural resources in the Garabagh field is higher. As for production, this field will annually produce at least 1.5 million tons of oil and 1.5-1.8 billion cubic meters of gas. Of course, this will be of great benefit to maintaining the stability of oil production and increasing gas production in Azerbaijan.

- Other giant oil and gas projects are being implemented in Azerbaijan as well. What is the level of their implementation?

- I can say that all projects are being implemented successfully. I was briefed on this today. As you know, all work related to the development of the Azeri, Chirag and Gunashli fields is going according to plan. The new platform built there indicates that long-term development of these fields is already a reality. As you know, the contract has been extended, Azerbaijan benefits greatly from this, we have received a bonus of several billion dollars.

Keeping production stable at the Azeri, Chirag and Gunashli fields is, of course, very important for us. At the same time, the Azerbaijani public should know that a significant part of our gas potential is generated by the Azeri, Chirag and Gunashli fields because the gas produced there is included in our common system. Therefore, all work related to Azeri, Chirag and Gunashli is going according to plan. This field is our main source of income. Everyone should know this.

The Shah Deniz-2 project is also well underway. This is one of the world's largest gas condensate fields. As you know, the full-field development of Shah Deniz-2 will bring us an additional 16 billion cubic meters of gas. We will provide for our own needs and there will also be a large volume of gas to export.

First gas production is expected at the Absheron gas condensate field next year. The Absheron field will be developed in two stages. As a result of the implementation of the first stage, there are plans to produce 1.5 billion cubic meters of gas that will be consumed in Azerbaijan because our growing industrial potential dictates the need for additional resources. Therefore, 1.5 billion cubic meters of gas will be consumed domestically. We are also approaching the beginning of the second phase in the development of the Absheron field. Production at that stage will probably be three to four times bigger. This will also have a positive impact on our gas potential.

Work at the Shafag-Asiman field is going according to plan. Drilling work is currently underway. This field also has great potential. Of course, drilling will show the exact amount of reserves but I remember that when I was working at the Oil Company, our specialists were noting that the volume of gas reserves there was approximately 400-500 billion cubic meters. In any case, I believe that drilling will be completed soon and we will have more accurate information about that.

Of course, our main focus now is on completing the Southern Gas Corridor. This project is also being implemented successfully. Its fourth and last component, the TAP project, is already nearing completion. So I believe that in a matter of a few months the construction of three interconnected gas pipeline systems with a total length of 3,500 kilometers will be fully completed at the initiative of the Azerbaijani state and as a result of large-scale international cooperation, and Azerbaijani gas will be transported to Europe. Thus, the Southern Gas Corridor will be fully commissioned. This is a very important and, I think, a historic event for us, as it will pave the way for the full-field development of the Shah Deniz field.

I should also note that without the construction of the Southern Gas Corridor, investors would not have invested in this and any other project or would have been in doubt. For example, the exports of gas to be produced from the Absheron gas condensate field, as well as Garabagh and other fields, require a route. Therefore, the importance of the Southern Gas Corridor is not limited to the Shah Deniz project alone. Without the implementation of this project, our energy policy could have remained incomplete. But our energy policy today fully secures the interests of our country. The Shah Deniz field will provide gas to Azerbaijan and partner countries for at least another hundred years. At the same time, we intend to expand the geography of our exports. Gas from the Shah Deniz field will be delivered to Georgia, Turkey, Bulgaria, Greece and Italy. If there is a gas network in Albania, then Albania will become our natural partner - we can export gas there too. It is possible to deliver Azerbaijani gas to other neighboring countries - the countries of the Balkan region.

Therefore, the Southern Gas Corridor is our historic achievement, and there is little time left for its completion. I want to reiterate that the work carried out at all our fields is carried out in a focused manner. All projects complement each other. If the contract on Azeri-Chirag-Gunashli had not been signed in 1994, there would have been no question of any other project. If the contract on Shah Deniz had not been signed, we would not be able to create our energy security today, not to mention the energy security of other countries, because Shah Deniz is the main source for us. By doing all this work, we are redrawing an energy map of Eurasia. Azerbaijan will remain a strategic partner for many countries for a long time.

- Mr. President, the field where this jacket sails away today bears the name of Garabagh - so dear and native to all of us. Please share your opinion about that.

- I think that this is quite symbolic. As you know, Azerbaijan signed contracts with foreign partners on a number of fields, but not all of them were effective. The implementation of many of them has already been stopped, their execution has been terminated and the drilled wells did not meet our expectations. As for the development of the Garabagh field, I want to say again that there was always confidence that there is great potential here, there are large reserves of oil and gas in the field. But, as I said, three wells were drilled in the 1990s, foreign partners stated that further investment would be ineffective and the Garabagh field was abandoned. As a matter of fact, we did not lose anything because Azerbaijan did not undertake any financial obligations during that exploration period. On the contrary, even an unsuccessful result is also a result, as it gave us additional geological data. Today, Azerbaijan is returning to the once abandoned Garabagh field - in the 1990s - and this giant jacket is a clear proof of that.

At the same time, in the early 1990s, the then leadership of Azerbaijan - the PFPA-Musavat tandem - allowed for the occupation of our lands. In other words, as a result of their betrayal, treachery and desertion, our lands were occupied. If such an analogy can be drawn at all, Azerbaijan left Karabakh. In 2016, we recovered a part of our lands, drove the occupiers from these lands, life returned to these territories, our citizens returned there, Azerbaijan returned there. I am sure that Azerbaijan will return to its native lands, to the Karabakh land. Our territorial integrity will be fully restored. Just as we are returning to the once abandoned Garabagh field today, we will return to our native Karabakh land in the same manner. Karabakh is ours, Karabakh is Azerbaijan!

- Thank you very much, Mr. President. Thank you!

- Thank you!