Located at the crossroads of Western Asia and Eastern Europe, it is bounded by the Caspian Sea to the east, Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to the south.
The Azerbaijan Democratic Republic, the first democratic and secular republic in the Muslim world, was established in 1918, but was incorporated into the Soviet Union in 1920. Azerbaijan regained independence in 1991. Shortly thereafter, during the Nagorno-Karabakh War, neighboring Armenia occupied Nagorno-Karabakh, its surrounding territories and the enclaves of Karki, Yukhary Askipara, Barkhudarly and Sofulu. The Nagorno-Karabakh Republic, which emerged in Nagorno-Karabakh, continues to be not diplomatically recognized by any nation and the region is still considered a de jure part of Azerbaijan, despite being de facto independent since the end of the war.
Shah Deniz gas field is the largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan. The field covers approximately 860 square kilometres (330 sq mi). The Shah Deniz gas and condensate field was discovered in 1999. It is to bring gas into Europe without having to traverse countries like Russia or Iran, deemed to be politically unreliable by some in order to promote their projected Nabucco pipeline.
The Shah Deniz scheme started to produce gas at the end of December 2006, three months later than expected, but was forced to close briefly in January 2007. Azerbaijan then announced that the field had resumed output only to admit that it had been forced to shut down for a few weeks due to start up technical issues.The shutdown forced Georgia to buy emergency gas supplies from Russia at a market price. Georgia hoped that production from Shah Deniz will allow the country to decrease its energy - and political - dependence on Russia.
Umid gas field is the second largest natural gas field in Azerbaijan. It is situated in the South Caspian Sea, off the coast of Azerbaijan.
Umid field is a part of a block previously consisting of Umid and Babek fields. The geophysical works at Umid started in 1953 which were repeated in 1972. A total of 9 wells were drilled in the area from 1977 to 1992, however no commercially viable fields were discovered at the time. In 2009, SOCAR financed the exploration works at Umid itself.
SOCAR leadership estimates that with further drilling, the overall reserves at Umid are likely to reach 300 bcm while those of Babek field lying under Umid will reach 600 bcm. Drilling at Babek will also be done by SOCAR.
The issue of construction of new gas pipelines, in addition to the Baku-Tbilisi-Erzurum gas pipeline may be raised in such developments. BP-Azerbaijan president Rashid Javanshir has already stated that within the framework of Stage-2 they are planning the parallel construction of another gas pipeline rather than the expansion of the Baku-Tbilisi-Erzurum gas pipeline. He did not specify the details of this project, but I can suggest that with two export pipelines in the western direction, whose capacity can be brought to 30bn cubic meters, they can offer their services to other parties as well.
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