The oil played a major role for Azerbaijan during all history. The first information about an oil recovery on Absheron peninsula attribute by the fifth century. In ancient times the oil was used in different areas - in construction, medicine and in the military purposes. By information of twelth century there was unique medicinal oil in Naftalan, curing diseases of skin, anchylosis’ diseases and gynaecological diseases. It was carried in wineskins through territorry of modern Georgia to the Black sea shores and from there to other countries of the world. About the 1848-th year the oil was mined by primitive methods, from several wells. In 1848 to year as a result of advance of boring principles there was a possible oil recovery from more plutonic beds. Broad distribution of new boring methods, a weak tax climate and increase of demand at oil products in the 80-th years of the 19-th century have reduced in intensification of process of oil extracting in Azerbaijan. In 1873 on oilfields in Ramany, Balakhany, Sabunchy, and Bibi-Heybat exploration and drillings began. The oil reserves of the these fields exceeded 500 million tons. In the beginning of the 20-th century in Azerbaijan annually there was produced more than 10 million tons, that constituted half of extracted oil in the world. During oil boom there was built several oilprocessing factories, where the off-the-shelf technologies were applied. The pipeline connecting slits with factories were constructed also. Constructed in the beginning of the 20-th century an oil pipeline Baku-Batumi with a length of 833 km. each year could pass about one million tons of processed oil.



As a result of oil boom Baku turned into the international investment center. The oil producing company of the Nobel Brothers and Rotshilds company by the end of 19-th century controlled more than 40 % of the oil market. And 20 years later Royal Dutch Shell and Russian Petroleum Company were added to them , which in aggregate possessed 60 % of all oil-wells. Then the leading foreign banks have opened in Baku their representations for monitoring above streams of the international capital. At the same time the first Azerbaijan banks were originated on the basis of the capital of local oil producers. The large local oil producers were Hadji Zeynalabdin Tagiyev , Aga Musa Nagiyev, Murtuz Mukhtarov, Isabek Gadjinsky and etc.

The development of a oil sphere has called growth of other branches of economy, that has reduced in public advance. By crossing borders of a oil sphere it reflected in construction and architecture, education, science and culture. After a falling of Azerbaijan Democratic Republic (1918-1920) and establishment of a communist formation under the Soviet rulement the oil extracting in Azerbaijan kept to develop and in 1943 reached the record mark - 23 million tons (70 % of oil extracting in all USSR). But it has not reduced in increase of a living standard of the population.

The first off-shore oil -field of Azerbaijan was prospected in 1949. For its operation the unique city on piles “ Neft Dashlari ” was constructed. It was the first experience of off-shore oil extracting in the world. Simultaneously there was a development of oil science and engineering in Azerbaijan, which were and remain one of leading in the world. Azerbaijan oilers participated in development of oil sector not only within USSR, but also abroad.

However absence of proper financing, obsolete equipment have reduced in stagnation of oil extracting in Azerbaijan. For this reason such perspective off-shore fields as Gunashly, Chirag and Azeri were not maintained, though were prospected.

After establishment of independence in Azerbaijan in 1991 the policy of engaging of the foreign capital in oil sector was pursuaded. In a middle of the 90-th years of Azerbaijan has gone through the second oil boom and began revival of oil branch. Main event for Azerbaijan has become signing in September, 1994 of the agreement of twelve petroleum companies on development of oil-fields were not maintained, though were prospected.

After establishment of independence in Azerbaijan in 1991 policy of engaging of the foreign capital in oil sector was persuaded. In a middle of the 90-th years of Azerbaijan has gone through the second oil boom and revival of oil branch has began. Main event for Azerbaijans has become signing in September, 1994 of the agreement with twelve petroleum companies on development of oil-fields Gunashly, Chirag and Azeri. This agreement has received a title “ contract of the century ”. The developmental contracts of other oil-fields on territory of Azerbaijan afterwards were signed. For today more than 20 companies from 12 countries of the world operate in Azerbaijan. In 21-th century the oil recovery in Azerbaijan is forecasted at a rate of 30-50 million tons.

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