The UK-Azerbaijan Relations: Strategic Cooperation and More Perspectives

The UK-Azerbaijan Relations: Strategic Cooperation and More Perspectives

by November 3, 2022

Dr. Vugar Bayramov, Member of the Parliament of Azerbaijan

The establishment of the mutually prosperous relations between the United Kingdom and Azerbaijan dates back to the late 19th century during oil boom when Azerbaijan was part of the Russian empire and historically have evolved. In the aftermath of gaining independence, the two countries have had official diplomatic relations since March 11, 1992. The independence was recognized by the United Kingdom on December 31, 1991 since when UK has become a strategic partner of Azerbaijan.

The Republic of Azerbaijan and the United Kingdom uphold strategic partnership and strongly beneficial bilateral relations covering a wide range of issues from high-level political dialogue to energy, growing trade and investments associations, as well as strengthening cultural and humanitarian ties between the two countries and people to people. Throughout the years, the partnership and strong cooperation between Azerbaijan and the UK has been developed as a result of mutual exchange of high-level visits between the two countries and subsequent investments in economic spheres. At the core of Azerbaijan UK economic relations stands energy industry. On May, 2021, the British-Azerbaijani Chamber of Commerce and Industry was founded aimed at the representation of British business’ interests in Azerbaijan.

In political sphere, in 2016, bilateral foreign policy dialogue was set up between the foreign ministries of Azerbaijan and the UK which had a number of meetings. Within the parliamentary cooperation, Azerbaijan-United Kingdom Inter-Parliamentary Friendship Group in Azerbaijani Parliament (Milli Majlis) was established in March 1997. On the other hand, All-Party Parliamentary Group (APPG) on Azerbaijan in the UK Parliament was established in 2014.

The bilateral economic cooperation, in particular in the energy sector, between the two countries makes up the core of bilateral relations between the Republic of Azerbaijan and the United Kingdom. Azerbaijan cooperates and operates with the United Kingdom in the field of exploration, extraction, and transportation of oil and natural gas from the Azerbaijani section of the Caspian Sea. In this vein, the British Petroleum acts as a leading oil company and has been actively operating in Azerbaijan since 1992 and participates in the main production sharing agreements such as the “Contract of Century” (Azeri-Chirag-Guneshli –

ACG) and the Shah Deniz project. BP is also main technical operator and key player in the implementation of Shah Deniz-2 project in Azerbaijan. The Signing Ceremony on Final Investment Decision on Shah Deniz-2 project came into existence in Baku in 2013 attended by high level representatives of many countries. The United Kingdom remains the single largest foreign investor in Azerbaijan with about 600 British companies operating in the country which are experts in industry, agriculture, trade, services, construction, transport and communications.

The United Kingdom is the largest investor in the Azerbaijani economy; the volume of investments is US$ 30.6 billion. Azerbaijan has invested US$ 2.4 billion in the United Kingdom. It is noteworthy to mention that UK-Azerbaijan Joint Intergovernmental Commission was established in 2015. As seen from the figure above trade turnover between two countries and exports to Azerbaijan have had an increasing tendency during the period specified, however reduction is observed in 2020 which could be attributed to global Pandemic.

In concluding remarks, it should not be forgotten that UK supported Azerbaijan’s fair position in Armenia-Azerbaijan conflict favoring the end of hostilities and signing a mutual peace deal.