"Contract of the Century" Changed the Region's Energy Geopolitics – U.S. Ambassador

The U.S. Embassy hosted a reception to mark the 30th anniversary of the "Contract of the Century." "For those unfamiliar, the 'Contract of the Century' is the agreement signed in 1994 between SOCAR and 11 foreign energy companies, including four from the U.S., to develop the flagship oil field Azeri-Chirag-Guneshli (ACG). This deal, which required complex and lengthy negotiations, became the largest Western investment in the former Soviet Union at that time," said U.S. Ambassador Mark Libby during his speech at the ceremony. He highlighted that ACG became the foundation of Azerbaijan's energy sector and ultimately led to the remarkable prosperity that Azerbaijan enjoys today.

The ambassador emphasized two key points regarding the significance of the "Contract of the Century" for Azerbaijan and the United States. "Firstly, at a time when most post-Soviet countries struggled for economic recovery, the Azerbaijani government demonstrated wisdom and foresight in the early 1990s by choosing the uncharted path of welcoming foreign investment into its energy sector," he continued. "It is no exaggeration to say that the 'Contract of the Century' changed the course of history and the energy geopolitics of the entire region," he added.

Secondly, Libby stated that this agreement holds a special place in the history of U.S.-Azerbaijani bilateral relations. American companies and U.S. political support were indispensable factors in the contract negotiations, the development of ACG, and the launch of the related Baku-Tbilisi-Ceyhan export route, he emphasized.

"In this regard, the 'Contract of the Century' is a vivid illustration of what we can achieve together by combining U.S. investment and political weight with the initiative and leadership of Azerbaijan," the ambassador noted. The United States and Azerbaijan have also played a multifaceted role that has been crucial for the subsequent development of the Southern Gas Corridor.

By participating in the Southern Gas Corridor, Azerbaijan has established itself as a key player in the regional energy market and an important energy supplier to Europe, Libby pointed out.

"As Azerbaijan embraces the global energy transition and prepares to host COP29, the government has made promising commitments to reduce emissions and set an ambitious goal of becoming a regional leader in green energy exports," he said.

Many American companies are leaders in the renewable energy sector and carbon reduction technologies, while U.S. research institutions are developing innovations that could potentially transform the green energy sector globally.

"Similar to the 'Contract of the Century' signed 30 years ago, Azerbaijan and the U.S. now have a great opportunity to combine their strengths - U.S. know-how and Azerbaijan's ambitions - to achieve goals in green energy and decarbonization.

In all these examples of U.S.-Azerbaijani partnership and potential future cooperation, American companies play a key role," the ambassador added. There are over 200 American companies operating in Azerbaijan, and since 1995, the volume of U.S. foreign investment has reached $18.7 billion, the ambassador reported.

He expressed hope that these figures will grow in the coming years, considering the "huge potential in sectors such as green energy and decarbonization."