The capital of Azerbaijan, Baku is located on the western shore of the Caspian Sea and is one of Azerbaijan's largest cities. The center of Baku is the old town, which is also a fortress. Most of the walls, strengthened afterthe Russian conquest in 1806, survive. This section is picturesque, with its maze of narrow alleys and ancient buildings. Part of a palace, a mosque, and a minaret date from the 11th century. Modern Baku spreads out from the walls, its streets and buildings rising up hills that rim the Bay of Baku. Greater Baku is divided into 11 districts and 48 townships. Among these are townships on islands in the bay and one island built on stilts in the Caspian Sea, 60 miles (100 kilometers) from Baku proper.
Baku is a major cultural and educational center, with a university and other institutions of higher education. One of these specializes in the petroleum and chemical industries. The basis of Baku's economy is petroleum. The existence of petroleum has been known since the 8th century. By the 15th century oil for lamps was obtained from surface wells. Commercial exploitation began in 1872, and by the beginning of the 20th century the Baku oil field was the largest in the world. Toward the end of the 20th century much of the land's petroleum had been exhausted, and drilling had extended into the sea. Baku ranks as one of the largest centers for the production of oil-industry equipment. Other industries are shipbuilding and repair and the manufacture of electrical machinery. Chemicals, cement, textiles, footwear, and foodstuffs are also produced. Archaeological evidence indicates that Baku was an ancient settlement. Persia controlled the site by the 11th century, though for a time during the 13th and 14th centuries it was captured and possessed by the Mongols. In 1723 Peter I the Great, czar of Russia, captured Baku, but it was returned to Persia in 1735. Russia captured the town in 1806, and in 1920 it became the Azerbaijan capital. Population (1991 estimate), 1,713,300