· Mr Bryza, the year 2006 will be remembered by the frequent bilateral trips of Azerbaijani and American officials, the highest level of which was the President of Azerbaijan Mr. Ilham Aliyev’s visit to Washington in April, and, later, in December, the visit of our first lady. If you could summarize for us, what 2006 brought to Azerbaijani-American relations and what kind of expectations you have for 2007 in this regard.

For me, personally, it brought an enormous amount of interactions with Azerbaijani senior officials. I think, I saw Foreign Minister Mammedyarov more than any member of my family. But in a broader more strategic and significant sense, this was a great year for US-Azerbaijani relations. President Aliyev’s visit was a watershed in US-Azerbaijani relations He was extremely effective, as always, communicating Azerbaijan’s priorities for its own development, its own desire to freshen the political air, to open up and liberate the political system, to bring Azerbaijan onto the same path as the rest of us in the Euro Atlantic community in terms of strengthening the democratic institutions with the full recognition that this takes time and is not easy. I think, he did a good job in demonstrating to our senior leadership that his objective is one that we share, which is to move Azerbaijan closer and deeper to the democratic sphere. We have to keep working at that. Madam Aliyeva’s visit to Washington was quite a success as well. She impressed everybody she met with. I was at the dinner in her honor and was so impressed by her speech recited from memory, which reflected shared strategic objectives and the vision for the development of Azerbaijan, its people and its culture, which is only something we welcome.

It was a big year on energy cooperation as well with Azerbaijan making some significant strategic decisions: one, to work with Euro Atlantic community to expand Azerbaijan’s own gas production and secure major markets in Europe, and two, as we just saw in SOCAR ‘s announcement, Azerbaijan will meet its gas demands and its electricity generation demands strictly through energy produced in Azerbaijan. That’s a tremendous achievement for Azerbaijan’s independence and for all of us in the Euro Atlantic community, who look at Azerbaijan as a key short term supplier to help diversify Europe’s energy sources. Big positive year. I haven’t even talked about Nagorno-Karabakh. We’ll get into that in a moment. But the year ended with the sense of optimism and the sense of momentum.

· Starting Januray 1st, we are looking at a different gas market in Eurasia. After President Aliyev turned down Gazprom’s offer, which he called a “commercial blackmail” Azerbaijan has ceased importing gas from Russia and trying to pull Gergia out if the crises as well. How does the US government feel about it?

The way Azerbaijan and Georgia has worked during this winter- I risk sounding overly positive in my assesment here- but what happened in the last few weeks is a powerful example of how both public and private partnerships, meaning companies and governments can work together, neighbors like Azerbaijan and Georgia can work together to strengthen their own independence. At the same time advance the interestes of private companies whose investemtns are crtitical to help Azerbaijan’s energy sector and maintain balanced economic growth. One thing, I’d like to emphasize here- this cooperation with Azerbaijan isn’t done for the United States. We don’t look at it as someohow satisfying our demand. We will never consume gas produced in Azerbaijan. But we care about gas production in Azerbaijan, by bolstering the energy independence of Azerbaijan and Georgia the efficiency of markets in Europe is improved.

· Due to the technical porbelms the production at Shah-Deniz field is being delayed and complicates the gas supply for Azerbaijan and Georgia this winter Эs it something you are concerned about?

Not really concerned. I have maintained normal contacts with BP comsortium and Statoil. What I understand, it is the typical technical challenge, that faces drillers all the time. The timing of this was quite unfotunate. It came just at a critical moment when the countires were trying to pull together a deal for gas supplies this winter. But that’s the nature of the oil and gas business. Shah-Deniz structure is complex, but extremely promising. I have full anticipation that world’s greatest technologists that are present at Shah-Deniz consortium are going to be able to reolsve this matter quickly. What we are hearing from BP, within the next couple of weeks they hope to have this problems fixed.

· 2006 also brought changes to Turkmenistan. With upcoming presidential elections on February 11 what kind of Administration in Turkmenistan would the US want to work with?

We would like to see whatever administration the people of Turkmenistan elect. The acting president of Turkmenistan has announced that there’ll be presidential elections. May these elections be free and fair, reflective of international standards. Because like so many countries in the region the politics of Turkmenistan is extremely complex, based on clan differences and all sorts of other political differences that have been pushed beneath the surface from 1991 and even before that, during the Soviet period. So, the way politics played out in Turkmenistan is highly unpredictable and from our own historical experience the way to maximize the likelihood of political stability is to let political forces to compete in a fair and transparent process, by rules that everybody understands. We hope that’s what’s going to happen. We also look forward to building cooperation between Turkmenistan and Azerbaijan on a range of energy issues.

· Would you like to see the Trans-Caspian Gas Pipeline negations restored?

We would love to see the Trans-Caspian Gas Pipeline put in place. We would like to see Azerbaijan and Turkmenistan to come to an agreement in demarcation of the boundary. So, this is yes to your question- we would like to go beyond the restart of the negotiations. They key, of course, is to make sure that whatever investments are considered will be commercially viable and commercially attractive. I have a sense, that it may be even easier today to come up with an investment scheme that is commercially viable, because the infrastructure required to move gas from Azerbaijan to European markets is already in place. So, an incremental investment to build the Trans-Caspian Gas Pipeline is easier to do.

· Mr Bryza, it’s been reported that Azerbaijan, Georgia and Turkey plan to start construction of Kars-Akhalkalaki-Tbilisi-Baku railroad in May, 2007. This is a grand project that will connect China to Europe along the ancient Silk Road route. However, we’ve witnessed a very strong opposition to this project both in Congress and White House. President George Bush signed a bill prohibiting financing of this railroad. Not that the participating countries were expecting any money from US, but still, can you explain the lack of US interest in this case?

Sure I can. I can’t speak on behalf of the president, but I would caution our friends in Azerbaijan as well as in Armenia not to misinterpret his signing whatever bill that this provision contained in as s sign of active US opposition to Kars-Akhalkalaki-Tbilsi-Baku railroad. We are all in favor of maximizing the transportation links among all, and I emphasize, all of the countries along the East-West corridor, that we’ve been trying to develop for some time. We’d love to get to that point when railroad from Turkey to Baku could transit Armenia, because, first of all, it’s part of our inclusive vision, second of all, we simply assumed that using existing infrastructure from Turkish border through Armenia into Georgia would make more commercial sense. But that’s not our decision. We are not investors. It’s up to the investors to come up with whatever investment scheme that makes sense. If Azerbaijan, Turkey and Georgia decide to go ahead with this railroad we are not opposing it at all, but we are not promoting it actively. We hope there’ll be time soon when the transit scheme will embrace all of the countries.

· The year 2006 in the Nagorno-Karabakh process- what are you thought on that?

A year of an up and a down and an up again. Like on two humps of the camel, but ending year on the top of the hump, rather than in between. Beginning of the year there was great anticipation with Rambouillet meeting in February, leading to the meeting in June in Bucharest of the presidents. Neither of them played out to our hopes. I made some statements with my fellow co-chairs about our disappointments, in which we called upon president to show bold leadership and improve the basic principles that the co-chairs had proposed. I am happy to report that the presidents did do just that. So, we can back up from that low of June 22nd up to the hump of the camel where was a genuine momentum at the end of the year with solid meeting between Presidents Aliyev and Kocharian in Minsk in early December. Neither of the Foreign Ministers is soft. They are both competing for their countries national interests, as is absolutely appropriate. But they are respectful to each other. And we just hope that this mutual respect will begin to resonate in the societies in Armenia and Azerbaijan day after day as this process continues. We end the year on a positive note. Adding to the positive elements is the fact finding mission that took place in fire-affected areas near the line of contact. That was an example of how potentially controversial issue was transformed by the leadership shown by Azerbaijan, Foreign Minister Mammedyarov, by your former Ambassador in UN, now in Washington and by Foreign Minister Oskanian into positive and significant cooperative endeavor, that clears the way hopefully for more confidence building measures and more than a confidence building measures – genuine trust that will stimulate momentum in the settlement process.

· Is there any update on the report prepared by the OSCE fact finding mission on the situation on the burned occupied Azerbaijani lands?

Since the holiday season I haven’t spoken to Mr. Soir who prepared the report on behalf of the OSCE chairman in office. But when e we were together at the OSCE ministerial early December, he told me the report was just about finalized. I haven’t seen the final version yet. But, I can tell you, I fully anticipate report containing a road map to build on the cooperation to date, follow up with specific measures to manage the consequences and prevent fires in the future. That mere act of working together to perform those two acts is important in changing the psychological climate that governs the settlement of negations in a positive way. My fellow co-chairs and myself hope to travel to the region may be end of this month or February – it all depends on the availability of Presidents Aliyev and Kocharian. But, we would like to make one more push over the next couple of month to sustain the momentum that we felt at the end of the year before the election campaign in Armenia really starts heating up.

· Thank you for talking to us.