ECONOMY


MOST SERIOUS AND EXPENSIVE OIL PROJECT IN THE WORLD

This is the title of an article in the Financial Times Deutschland telling on importance of the main export pipeline Baku-Tbilisi-Ceyhan.

Construction of strategically significant Baku-Ceyhan pipeline has recently started under the supervision of the British energy concern BP. Beginning with spring of 2005, oil from an Azerbaijani city of Baku will be supplied by this 1760 km pipeline to the port of Ceyhan, situated in the Mediterranean shore of Turkey via Tbilisi in Georgia (BTC), Olaf Proice writes.

A major part of oil is meant for European market. German companies, such as Salzgitter and Siemens, are also taking part in construction of the pipeline.

According to the author, BTC pipeline is the most serious and expensive oil project in the world. Many-year political negotiations and work on technical documents that costs much, preceded the start of construction. The future operational capacity of the pipeline comes to one million barrels a day. This volume of oil will be transported from Azerbaijani offshore fields to the Mediterranean Sea.

The pipeline’s cost comes to 3 billion US dollars, 1.3 billion US dollars out of which are invested by the BTC Consortium; the rest is outer financing, particularly, by the World Bank and the European Bank for Reconstruction and Development. The BP, world third oil production concern, owns the biggest in this project, 30 percent of BTC share and operates the project. Besides, according to the latest news, BP invests 5 billion US dollars to Azerbaijan - it produces oil and natural gas at off-shores of the country.

Azerbaijan is going to increase oil production five times in the near time, starting with 308 000 barrels of oil, produced currently a day. Officials of BTC Consortium believe it improves oil supply to Europe. “Political tension in Middle East does not influence the implementation of our project, but it increases the importance of oil, supplied from non-member-states of OPEC, senior manager of BP, Andrew McOyslin said. For Europe it is positive, if extra oil sources will be at its disposal in the future It increase safety of supply”.

The oil pipeline connecting Baku and Ceyhan, gives opportunities, in conditions of increasing export of Azeri oil, to transport it bypassing the Bosporus in the junction between the Black and Aegean Seas.

Olaf Proice analyses the process, preceding construction of Baku-Tbilisi-Ceyhan. There were long disputes where the new pipeline should go from Azerbaijan. Russia was insisting on Azerbaijan’s joining the operational oil pipeline in Kazakhstan, crossing the Russian territory to the West. Concerns participating in construction discussed the opportunity of implementation of a cheaper project, via Iran. The USA was against these two options and rendered strong behind-curtains pressure.

In conclusion, the author informs on figures and the volume of orders got by German companies. The cost of orders, implementation of which was assigned to German companies, come to 300 million US dollars, according to BP. The concern Salzgitter will supply pipes for the pipeline. The government of Germany is a warrant of fulfillment.

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