Answers

I question-If we take look a history, we can see that not only energy security policy of, but also
independent energy policy of Azerbaijan, economic, diplomatic relations of Azerbaijan with different
countries through the energy policy line has begun since 1994, “Contract of Century”, and development
phases of energy security policy move forward from here.

During the period of signing Contract of Century, the main aim of energy security policy of Azerbaijan
to convert Azerbaijan self-sustaining country, make independent from that point. However there is not
sufficient supply technology for that because of current situation in country and we need to foreign
investor to solve that problem. However foreign countries, especially Western European countries do
not rely on energy security of Azerbaijan because of current situation in country during that period
“Contract of Century” main aims behind that agreement, given suggestions to countries played
important role on putting huge investments to that project. After that, big companies like AMOCO, BP,
Lukoil, “Penzoil” commonly more than ten companies from seven countries put their investment to that
project. As a logical sequence of that, Azerbaijan began to strengthen its energy strategy and security
policy through collaborating with neighbor, partner countries. By doing so, Azerbaijan provided its
energy security from investment point too.

From diversification of market and export routes’ point, Azerbaijan gained too. After signing
TANAP and TAP contracts Azerbaijan enlarged its market from Georgia, Turkey to Greece and Itay.

II question- In comparing with PSA and Joint Venture Operating Agreement, PSA is most suitable for
Azerbaijan. Because if you sign contract with investors based on Production Sharing Agreement, you
share production, not profit. gets revenue, do not make investment even risks all investment and risks
on the shoulders on investors, but if you make agreement with foreign companies based on Join
Venture Operating Agreement you as a state “strength its partnership” with them. In other words as a
company you also have to ready to take risks, costs even profits which is not beneficial a profitable
from economic point. Signing of Contract of Century based on PSA is logical answer to that. By doing so,
Azerbaijan did not take any risks and costs for drilling exploration operations. In other words, Azerbaijan
made profit two times; through “energy strategy” and “agreement policy”