9
As for economic relations, contracts were drawn up for cooperative ventures
worth about $600 million, while Turkey agreed to provide grain either gratis or on
favorable terms as Azerbaijan had trouble feeding over one million refugees from
Armenian-occupied territories. In addition, there was discussion of a proposed oil
pipeline from Baku to Ceyhan, on the Mediterranean coast of Turkey – for which
Aliyev’s government had signed an accord in March 1993 and from which Turkish
authorities had estimated they could earn as much as one billion dollars in transit taxes –
as well as oil exploration rights in Azerbaijan; Aliyev expressed the hope that a $7.5
billion oil deal between the Azerbaijani State Oil Company (SOCAR) and a Western
consortium led by British Petroleum with its 17% share and including Ramco also of
Britain, four American oil companies, Norway’s Statoil, Itochu of Japan, Saudi Arabia’s
Delta Nimir, and the Turkish State Petroleum Company (TPAO) could be concluded
soon. The Azerbaijanis eventually signed an agreement in September 1994 that was
initially contested by Russia.
While Aliyev had granted the Russian oil company Lukoil a 10% share in the
then-proposed oil consortium, shortly after he came to power, Russia wanted assurances
that the oil would transit its territory to the Black Sea port of Novorossiysk. Until this
was done, the Russians had argued that the Caspian was a “special inner sea” and that
states located on its littoral could not act unilaterally with regard to its resources. (The
868-mile Caspian to Black Sea pipeline, which travels through Chechnya, was opened in
November 1997.) Turkey voiced environmental concerns about the possibility of
increased oil traffic through the Bosphorus and Dardanelles straits; it originally had
proposed a pipeline which would transit Iran and Nakhichevan, but due to opposition in
Convention