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Azerbaijan: Caspian Oil Production Begins

Baku, 12 November 1997 (RFE/RL) - Azerbaijani and foreign officials and oil executives gathered today to celebrate the official start of production from a rich Azerbaijani offshore Caspian oil field. The Turan news agency quoted Azerbaijani President Heydar Aliyev as saying the event marked the beginning of a new era not only for Azerbaijan, but for the entire Caspian region. Aliyev then turned a tap to start the oil flowing.

An Azeri folk band greeted politicians, diplomats and executives as officials of the Azerbaijani International Operational Company (AIOC), which runs the operation, opened the Sanqachal oil terminal south of Baku. Dignitaries were also flown by helicopter to a platform in the Chirag oil field, some 180 kilometers offshore.

Among those at today's celebrations included U.S. Energy Secretary Federico Pena, Russia's First Deputy Prime Minister Boris Nemtsov and Turkish Prime Minister Mesut Yilmaz.

The $8 billion project involves Russia's LUKoil and Azerbaijan's SOCAR (the state oil company), which each have a 10 percent stake in the development deal; four U.S. companies holding 40 percent; British Petroleum with 19 percent; and companies from Norway, Turkey, Japan and Saudi Arabia holding the remainder.

Nemtsov, meeting later today with Aliyev, hailed the beginning of production under the oil deal as "a great breakthrough" and an important stage in Russian-Azerbaijani cooperation.

The Chirag oil field -- one of three developed by the international consortium under the $8 billion deal -- is expected to initially produce 1,000 metric tons a day.

Oil began flowing Saturday. It will flow through the Baku-Grozny-Novorossiisk pipeline. Officials said yesterday that a first shipment is due to leave for western markets from the Russian Black Sea port of Novorossiisk on December 10.

The opening of the pipeline is almost a year behind schedule.