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President of Azerbaijan Ilham Aliyev: Mr Medvedev, ladies and gentlemen,

I am very happy to once again welcome the President of Russia to our country. We have a great deal of political interaction between our countries, some very close contacts, and our relations are very dynamic. We have regular meetings on a presidential level, which also reflects the nature of our relations and helps to create even greater closeness between our nations.

We all recall the official visit by the President of Russia to Azerbaijan exactly one year ago. It means a great deal to us that it was one of Mr Medvedev’s first official visits as President. The documents that were signed during that visit are now being implemented. The Declaration on Friendship and Strategic Partnership is being successfully carried out, and the documents that were signed today are the logical step following all of our work in the past year.

We have had several meetings, and each one was very important. We have made decisions that will determine the nature of our relations and, to some extent, various regional processes, now and in the future.

We are also successfully implementing economic projects, despite a slight decline in trade turnover that has resulted from the global financial crisis. Nonetheless, because of momentum and structure of our trade, we predict that this temporary decline will be quickly overcome. Following the signing of today’s documents, I am particularly confident that we will see a sharp increase in turnover next year.

We are very pleased at how our cooperation is developing in the humanitarian sphere, which is of great importance to both our countries. For our part, we aim to do all we can to ensure that our cooperation in this area is a proper match to the political and economic relations between our nations. I am happy to see that this is happening.

Today, we laid a new foundation for effective cooperation in the natural gas sector. An agreement was signed between Gazprom and SOCAR, which opens a new page in our relations. I think this will be a very successful and mutually beneficial partnership fully serving the interests of both Russia and Azerbaijan. Our countries’ wide-scale cooperation in the energy sector will be greatly influenced by the successful implementation of today’s initiatives and undertakings. We have seen good results of cooperation in oil, gas, electricity, and all other energy sectors. The agreement signed today represents a new aspect of our relations in energy industry, given the regional and global importance of gas factor. I think that the significance of this document is quite clear.

Today, we also took a major step in finalising the demarcation of the border between our countries. We have agreed upon the basic principles for further moves which should culminate in signing ultimate agreements. Overall, I am very happy about the way that our relations are unfolding.

Much may be said about the relations between Russia and Azerbaijan. Today, we concentrated on few points of our overall bilateral agenda and reached some important agreements. Naturally, we discussed issues regarding the Nagorno Karabakh conflict settlement and Azerbaijan is grateful to Russia, and to President Medvedev personally, for such active involvement in the settlement process.

I feel certain that the meeting held early this month in St Petersburg between the Presidents of Armenia and Azerbaijan with participation of the President of Russia has created a good atmosphere for the talks progress. We count on Russia’s continued involvement as a mediator, as Azerbaijan’s neighbour in the settlement of this difficult issue.

I would like to say again that I am satisfied with today’s talks and the documents we signed, as well as the overall level of relations between our countries. I am certain that in the future, they will continue to evolve positively.

Thank you.

President of Russia Dmitry Medvedev: Mr Aliyev, ladies and gentlemen,

Our talks with the President of Azerbaijan were very fruitful indeed. I would like to say that the frequency, momentum, and atmosphere of our meetings make us very happy, because this may very well be an example of how talks should be held, and how to come to an agreement on a variety of economic and political issues. And it is true that we meet often. This ensures that the strategic bonds between the Russian Federation and Azerbaijan will further strengthen to the benefit of our peoples, developing in a progressive and mutually beneficial way.

Today, in this lovely place, we held talks addressing multiple matters. Clearly, our delegations worked beforehand, so we did not just meet to discuss internal and foreign topics, but in order to finalise work on several documents. My colleague, the President of Azerbaijan, spoke about these documents just now. I too would like to refer to the agreement on gas, a benchmark in our relations, because it gives start to our cooperation in the gas sector.

Our nations are major suppliers of energy resources. We have cooperated, and continue to cooperate in oil sector while our cooperation in gas sector is being launched at this particular moment. It is just a beginning, but in my view, this is a good beginning, one that will lead to improving contacts and expanding a mutually beneficial cooperation in the gas sector.

I think that we will be able to promote such cooperation in the future aiming to make full use of the great opportunities and to increase the volumes of supplies. In any event, the fact that we signed a document on this matter is a good start.

As for other areas of our cooperation, it is true that we have done a lot in recent years. Last year, we signed a new strategic document, the Declaration on Friendship and Strategic Partnership. This document is currently being implemented, and indeed, the agreements signed today are practical results of that initial document implementation.

I would also like to note that Mr Aliyev and I meet regularly, and whenever new suggestions are made, we look into them rapidly and constructively, which is why I said that this aspect of our relations serves as an excellent example of foreign policy.

The documents signed today included an agreement on the Caspian Sea; in fact, we are on its seashore right now, so this is the right place for signing such documents. There is much to be done in this respect, and we have made another step in dealing with the Caspian Sea matters.

The documents also included an agreement on diplomatic issues and real estate, a matter we started discussing long ago and which we needed to finalise. Today, we have finalised it, and it really is an important matter for our diplomats.

There was also a memorandum on completion of our border demarcation; here, too, we did a lot of work and compromised. Naturally, we will continue our efforts to conclude this process soon. Overall, everything we did today reflects the multifaceted nature of our relations, both economic and humanitarian.

The economy was progressing quite well in recent years, and last year, trade turnover was 2.4 billion dollars. This year, of course, we are seeing a decline. Still, I would like to note that within the context of the relations between Russia and Azerbaijan, this is not a dramatic decline. Unfortunately, in some cases, we see rapid drops, but this is not the case here, and we would like to maintain the level we had attained.

Given the documents signed today, I fully agree with what was said by Mr Aliyev. Most likely, we will even have an opportunity to make up some of these losses.

As for humanitarian matters – the friendly relations between our nations and our peoples – they have traditionally been very important. I would like to particularly thank the President of Azerbaijan for his attention toward humanitarian aspects, perhaps more so than in any other area. The decisions we made – including the one to open branch campuses of Russian universities – are mutually beneficial, and we are very happy that our cooperation is progressing rapidly and, we believe, quite efficiently.

There are many events coming up. By the way, today marks the beginning of the Days of Azerbaijan in Russia, and there will be a number of cultural events, musical performances, and other great events. So, everything is going well on the humanitarian front, and we would like for everything to continue developing as successfully and productively as our economic and foreign policy affairs.

Naturally, we also discussed the Nagorno Karabakh settlement. We talked about what had been done in St Petersburg. I was happy to hear that the President of Azerbaijan felt that round of consultations was quite productive. Russia is willing to further contribute to this process and to provide opportunities and mediation in order for this process to progress and move toward a final settlement of this problem.

Thus, I would like to say that we are fully satisfied with today’s results, and I would like to thank the President of Azerbaijan for the invitation extended to myself and our delegation to visit Azerbaijan on a working visit.

Thank you, Mr Aliyev.

Question: I have a question for both Presidents. You mentioned an agreement on gas in your opening remarks. In your opinion is this another step forward in the development of cooperation between the two countries and evidence of further progress in that regard, or is it a response to contemporary global trends and the current crisis?

Ilham Aliyev: First of all I think that the agreement stems from these talks and the agreements that we have worked out here in this palace. During Mr Medvedev’s official visit a year ago the topic was discussed. Prior to that CEO of Gazprom Mr Miller paid us a visit. Thus the two companies have been negotiating for at least a year, and there have been agreements on principles and on commercial aspects. The talks were very constructive and conducted in good faith. The fact that we came to an agreement is of course a very positive sign because, as was pointed out earlier today, the export of Azerbaijani gas to Russia opens up a whole new dimension in our relationship,

Azerbaijan has recently become an exporter of natural gas. Azerbaijani gas is currently being sold in 4 countries and starting next year it will also be sold to Russia. Our country’s gas reserves are substantial: this year the level of gas production will be approximately 27 billion cubic metres, and by next year we plan to produce more than 30 billion.

For us the possibility of cooperation with Russia in the gas sector is also an opportunity to get into a new market, an opportunity to diversify gas supplies. Usually when we hear the word diversification it basically means diversification for consumers. But as the examples of Russia and increasingly Azerbaijan show, a diversification of supply, diversification of the sources of supply, is as important for producers as it is for consumers.

This agreement fully suits our purposes and, discussing this subject today, I would say it is in Russia’s interests as well.

It is an agreement that has great potential. We plan in the future to increase the supply of natural gas as gas production in Azerbaijan grows. This is a commercial agreement. That is very important because unfortunately the natural gas issue has been artificially and unjustifiably politicised. In other words, this agreement shows what relations in the gas sphere can be when they are not politicised. When they serve the interests of both nations and embody the spirit of free competition and the market economy, then no unpleasant questions arise.

I would admit that in order to reach this agreement we did not have to engage in elaborate consultations and talks with transit countries, as there are no transit countries between Russia and Azerbaijan. We also did not have to seek funds to build a gas pipeline, since there already is one in working condition. All we had to do was come up with an agreement on technical and commercial matters and in line with the Declaration on Friendship and Strategic Partnership we signed a year ago to ensure our countries’ national interests.

That is how I would answer your question.

Dmitry Medvedev: I have almost nothing to add to what Mr Aliyev has said because I agree with every word the President of Azerbaijan has pronounced concerning the treaties that were signed and the agreements that were reached, both for what they contain and for how they point to new areas in which we propose to develop our cooperation. The only thing that I would like to say is that Russia has a lot of gas too, and we are working hard to sell it in different markets. But this sort of agreement allows us to look to the future. Why? Because our two countries, both of which view energy resources as an essential part of our national wealth, were able not only to agree in a civilised manner but also to calculate for the long-term. Thus it seems absolutely right to say that we have done this for our mutual benefit rather than political reasons. This is a situation in which nothing can get in the way of our cooperation. On the contrary, this agreement has in fact created more opportunities.

Incidentally in my view this is an example of the energy security which we all want so much, about which there has been so much talk, and for which we are offering a special energy package, that is, an agreement concerning how we will cooperate in the energy sector in the near future. So I think that our relations in this regard are exemplary – to use that term once again – and they just might serve as models for others seeking to establish energy relations or other relations in this area.

So I think that the agreement we just signed has a bright future. This is only the beginning. Let us hope that our cooperation will yield the fruits that we are all counting on, as there is every prerequisite for that and for our cooperation to further expand. We can come up with other joint projects in this area and in other areas, but the most important thing is to have something to build on. Today is just the beginning of this cooperation. For Russian-Azerbaijani natural gas relations this is a very important day.

I hope we will all remember this day.

Question: I have a question for both Presidents. The Moscow Declaration clearly states that the settlement of the Armenian-Azerbaijani Nagorno Karabakh conflict must be based on the principles of international law and the decisions of international organisations. This provision is consistent with the fundamental position of the international community. How do you see the further implementation of these provisions?

Ilham Aliyev: Yes, you're right: the agreement that was signed in Moscow clearly lays out the principles according to which the Armenian-Azerbaijani Nagorno Karabakh conflict must be resolved. The principles of international law are well known. As for the decisions of international organisations, in this case of course we consider the basis of these decisions to be those taken by the most authoritative international organisation, the United Nations. The UN Security Council adopted four resolutions demanding the immediate withdrawal of Armenian forces from occupied Azerbaijani territories. Similar resolutions have been adopted by other organisations, international and otherwise, as well as by the OSCE [Organisation for Security and Cooperation in Europe]. And the resolutions adopted at the OSCE Lisbon summit are still in force. Naturally this conflict must be resolved according to these principles.

The principle of territorial integrity is an inviolable one.

With regard to the principle of self-determination of peoples, it can be successfully implemented within the framework of the territorial integrity of a single Azerbaijani state.

Today I would say that the negotiation process is entering its final phase. As Mr Medvedev and I pointed out earlier, the round of talks in St Petersburg this month has been quite productive, and we have been able to make some progress. Of course there are great expectations in Azerbaijan and no doubt in Armenia and the rest of the world that the conflict will soon be resolved. But we are moving forward, which is encouraging, because that strengthens the negotiating process. Despite the fact that since 1994, when a ceasefire was agreed to, the conflict has not been resolved, there is certainly more hope for a settlement now than there was a few years ago.

Therefore, in the spirit of constructive cooperation and a willingness to acknowledge the priorities and interests of all parties, I think that we will be able to reach a settlement. We want a solution, we yearn for a solution, and for our part will do everything we can to achieve one as quickly as possible.

Dmitry Medvedev: I completely agree that such problems can be resolved only within a strong international legal framework.

The nature of this framework is well-known – Mr Aliyev has just laid it out. In effect we are talking about the general principles of international law that were developed by what used to be called the civilised nations. Of course we are talking about the decisions of major international organisations and above all those of the United Nations, and of the resolutions that were adopted concerning the Nagorno Karabakh conflict. I think the most important thing is not even that these principles are available, as nobody challenges them, but that all parties be ready to consider all the issues in this spirit and resolve the conflict on the basis of these fundamental principles, without trying to invent something completely different. In my opinion this is what will make possible the resolution of this very long and difficult conflict.

In any case our view, that is, the view of the Russian Federation, the country hosting the talks, is that at various points in the last meeting in St Petersburg, the negotiating parties – and here I mean Azerbaijan and Armenia – were ready to deal systematically with the disparities that exist in their positions on specific issues and make progress in precisely the way that the President of Azerbaijan just described, by moving forward. There is every chance that this conflict will be resolved in fairly short order. And Russia is ready to do everything it can along with other nations (this is no place for petty jealousy) so that this conflict can be settled as efficiently as possible. Thank you.