ABSTRACT
Azerbaijan borders on the Kurdish areas, the major parts of which are in Turkey, Iraq and Iran. As one of the world's oldest oil-producing regions, the country was at the hub of the Soviet petroleum industry. With such a strategic position and a key resource, Azerbaijan is at the point of convergence of many geopolitical issues. Before 1991 there was already anti-Soviet protest, but with independence in that year, the Communist Party was transformed into the Democratic Party of Azerbaijan. In 1994, Azerbaijan signed a Caspian Sea oil exploitation agreement with a consortium of companies led by British Petroleum and this clearly displeased the Russian Federation. Further complications followed over the proposed routes of pipelines from the Caspian Basin. Meanwhile, attempts at settlement of the Nagorno-Karabakh question with the help of the Organisation for Security and Co-operation in Europe (OSCE) had foundered and, in 1996, the Armenians of Nagorno-Karabakh declared independence unilaterally.
