( CNN ) -- What I first noticed when arriving in Baku , beyond the world 's tallest free-standing flag pole , was the oil derricks in the Caspian Sea , visible from western hotels steadily rising along the coast . Where other cities might dress the skyline to lure visitors to the beach , or to take a boat cruise , Azerbaijan is all about its energy wealth . The country of eight million people benefits from having started early in the oil game -- in 1846 the country drilled the first oil well in the world -- but all that is well known , as is the country 's push to extract more oil off shore in the Caspian . Country profile : Azerbaijan . What should become more well-known is the country 's attempt to diversify away from oil and focus more on natural gas . To the ever expanding gratitude of Western Europe , Azerbaijan is close to tripling the amount of natural gas processed through its BP facility south of Baku . Soon the owners of the Shah Deniz natural gas lease in the Caspian will choose from a host of competing pipeline consortiums to bring more natural gas to Western Europe . Most importantly , it means more gas heating rooms in Romania and Germany that does not come from Russia . As one of the most potent symbols to me of the rising energy wealth , seaside luxury homes are being built directly across the street from the vast BP oil and gas refinery south of Baku . From the front bedroom the new owners will overlook ever more derricks . From the back yard , it is the refinery . Still , I saw more than a dozen of these little palaces under construction . So , what else can Azerbaijan do to move away from oil ? Information technology is one of the bigger pushes . If you look at a map of the country , you can see why IT , software and social media companies are reputably looking to set up regional hubs there . Firstly , students are learning English , which is the international language of technology . Secondly , many still speak Russian . The legacy of the former Soviet Union means workers can not only communicate easily with neighboring Russia , but also with potential customers in Kazakhstan and Uzbekistan -- two fast growing countries in the region . Add to that two obvious connections : language with Turkey and ethnicity with Iran . If you are setting up a regional company , Baku would be one of the first places you would have to study . Azerbaijan 's economy does of course suffer from some of the leftovers of the Communist era . The roads outside Baku are terrible . There are also simmering tensions with neighbor Armenia ( not seen on maps whenever I looked at one around the city ) and the region is not stable when you add in Georgia , Southern Russia and Chechnya . Azerbaijan is also using its money to reinvigorate the fishing industry , once it has cleaned up the Caspian . It is also building a vast complex , the size of Monaco , of new housing , shops and hotels near the port called White City . It 's a tip of the hat to what Baku used to be known as when it produced half the world 's oil -- the Black City . One day , Baku might even become a tourist attraction . Thousands of people will be flocking here next year when the country 's hosts the European Song Contest finals . Test your knowledge of Azerbaijan . These fans will see a brand new convention center , a new museum in the shape of a rolled up carpet to capture the country 's love of making carpets and exporting them around the world , a massive new embankment ringing the Caspian giving people a chance to walk nearly the length of the city , and explore the amazing Old City -- one of the finest in the world and mostly unknown outside the Caucasus . Then , if , and it 's a big if , the International Olympic Committee chooses Baku over Istanbul , Doha , Madrid and Tokyo to host the 2020 Summer Games , the world will awake to the rise of Azerbaijan . Baku must be seen as a long shot , but it was put to me by several people , that like the Games themselves , it is more important to take part in the process than to necessarily win . Baku wants to be seen on a world stage and is learning what steps to take for its growing economy and wealth to be noticed far and wide .
Baku , capital city of Azerbaijan is reveling in its energy wealth . Concerted efforts made to diversify national economy away from oil . Is tripling amount of natural gas produced and moving to encourage IT sector . City is bidding to host Olympic Games in 2020 .