According to petroleum scientists, the Caspian Sea region contains the third largest reserve of oil and natural gas in the world, behind the Gulf region and Siberia. Drilling for oil in the region is not recent. Oil derricks dotted the landscape during the latter decades of the nineteenth central. Oil was a major source of hard currency for the former Soviet Union, but the drilling methods were technologically less efficient compared with western finns when it came to large-scale oil exploration. This restricted Soviet exploration in the Caspian region. When the Soviet Union implemented perestroika and glastnost in the mid 1980s, its oil exploration sector was ready to implement the benefits from the west. The breakup of the Soviet Union, however, put a hold on these plans, as several nations emerged in the former Soviet lands around the Caspian Sea. The major issue regarding oil exploration in the region is a question of how best to deliver the oil to world markets. The Caspian sea area is landlocked, thus pipelines are required. The exact routes of such pipelines are as of yet undecided, and may prove to be a very important factor in determining the ultimate success of oil exploration in the region.
The necessity of increasing oil and gas extraction to overcome the economic difficulties appeared after gaining independence. The government of the republic then concluded that it is necessary to attract foreign companies to invest in this branch [2]. The recoverable reserves of the Chirag, Azeri and deep water Gunahsli oil fields amount to approximately 4 billion barrels. The fields are located 90 kilometers offshore, south-east of Baku in water depths of 120 to 400 meters, the potential field sizes are large by international standards.
