Transparency initiative annual report

Figure 1: Oil and gas production process ^7

Azerbaijan is one of the world's oldest oil-producing countries. Azerbaijan's main oil and gas reserves are located in the Apsheron Peninsula and the Caspian Sea.
The history of oil and gas production in Azerbaijan: ⁸

• 
  As a traveller, Marco Polo wrote in the fourteenth century, “people in this region had been using oil for several purposes, as well as transporting it to adjacent countries”;
  
• 
  In 1847 the first oil wells were drilled in Bibiheybat and then Balakhany by means of modern technology;
  
• 
  In 1901 Azerbaijan produced 11.5 million tonnes of oil and was the world's leading oil producer;
  
• 
  In 1941 Azerbaijan produced 23.5 million tonnes of oil, which amounted to 71.4% of the Soviet Union's production;
  
• 
  Azerbaijan was the world's first offshore oil producer. In 1949 the discovery of the Neft Dashlari ("Oil Rocks") made Azerbaijan and the Caspian Sea well known all over the world;
  

• 
  In the late 1970s and early 1980s the Azeri, Chirag, Kapaz, and Gunashli fields were discovered in Caspian waters 80 to 350 metres deep. Gunashli is currently producing more than 60% of SOCAR's oil;
  
• 
  The "Contact of the Century" was signed on 20 September 1994; and
  
• 
  Up to now, the Government of the Republic of Azerbaijan has signed a number of PSAs with foreign companies. The detailed information related to oil and gas industry, gold and silver production was outlined in section 3.1. Overview of the Mining Industry of the EITI report.
  

Fine metals ⁹
Azerbaijan regions have significant potential for the creation of a sustainable and long–term mining industry. Gold and silver deposits are mainly located in the Small Caucases and on the six fields of south–west Azerbaijan: Gadabay, Ordubad, Gosha Bulag, Gizil Bulag, Vejnali and Soyudlu.
Copper reserves of Azerbaijan are focused mostly in Balakan–Zagatala, Gadabay, Qarabagh and Ordubad ore regions. Basic copper reserves in the Balakan–Zagatala ore region are centred in copper-pyrite, pyrite-polymetal type deposits and displays, while in the ore regions of the Minor Caucasus and the Nakhchivan rugged zone are focused in mostly copper-porphyry, molybdenum-copper-porphyry and gold-copper-pyrite type fields and displays