WHAT TREASURE IS BURIED IN BAKU

EKA LOMIDZE

On 1 August an important step was made towards transportation of crude oil from Azerbaijan and Caspian region to the Turkish port Jeikhan in the Mediterranean coast through the territory of Georgia.

Companies – investors of the pipeline “Baku-Tbilisi-Jeikhan” project signed the document in London. According to the document, “Company of oil pipeline Baku-Tbilisi-Jeikhan” (BTC company) was officially established. Representatives of countries where this pipeline would pass were present at the signing ceremony.
Each owner of “Baku-Tbilisi-Jeikhan” pipeline has already become a shareholder of “BTC Co”. This company will build a pipeline. It will be its owner and operator. The establishment of “BTC Co” will, supposedly, make it possible for owners of the pipeline enter the phase of large-scale construction after company’s board of directors makes sure that other preliminary works have been completed.
David Tvaleibishvili: manager of oil company, strategic planning.
– Establishment of “BTC Co” made relations with banks and other financial operations much easier. Negotiations with seven companies and conclusion of contracts with them is one thing, but it is a different thing when you co-operate with one company that includes several other companies on the basis of agreement.
– In the given stage, “BTC Co” has the following shareholders: “B-P” (38,21%), “Sokar” (25,00%), “Unokal” (8,90%), “Tfao” (7,55%), “Annie” (5%), “Itochu” (3,40%) and “Amerada Gas” (2,36%). At the same time, “Totalfinale” obtained the right to buy 5% shares of “BTC Co”.
– Other foreign companies are supposed to join the project.
– Of course, it is not ruled out provided terms of agreements with other companies are agreeable.
By the decision of the “BTC Board” a contract on pipelaying in Azerbaijan was signed with the “International company of united contractors” (Greece). The joint enterprise of “Spi Kapag” (France) and “Petrofak” (USA) obtained the right to lay pipeline and perform construction works. Tender list was approved in the end of 2001 by all partners of “BTC Co”, and summing-up was performed by the project group “P-P”. The signing of the contract is based on one-time transfer of the whole sum. Company “Bekhtel” will proceed with its work as a contractor making purchases and supervising construction works. The Turkish company “Botash” will act as a Turkish contractor. This company will lay pipeline in the territory of Turkey after receiving the whole sum. Pipeline construction is a historical event for the Caucasian region. Construction of pipeline will take 30 months. The total length of the pipeline is 1760 km. of which 1770 will pass through the territory of Turkey, 482 km. will go through Azerbaijan, and 248 – through Georgia. The project value of the pipeline is 2,95 billion dollars.
The pipeline will cross 1500 rivers. The highest point it will pass is 2700 meters. Construction works will begin in the first quarter of 2003 and finish by the end of 2004. The pipeline will be ready for pipage of oil in spring 2005. Company “Impex” in Kazakhstan joined shareholders of the Baku-Tbilisi-Jeikhan project. 12,5% of the total value of oil passing through our territory will be transferred to oil companies of Kazakhstan. As soon as construction of pipeline is completed, the riches of the world will pass through our territory. True, it belongs to others, but still we will be able to benefit from it, and not only from the viewpoint of safety.
Construction works will provide jobs for many people. Up to 10 000 landowners will receive 100 million dollars’ compensation. After this pipeline is put in operation, we will have funds for budget and natural gas. This will, certainly, happen in an ideal case, i.e. when serious and organisational issues are settled. The campaign against the Baku-Tbilisi-Jeikhan pipeline has not yet come full circle. Opponents have become active especially after the plans to construct the pipeline have turned into reality. As expected, Russia faces a serious problem of losing control over Caspian Sea region countries.
Washington gives much thought to Russia’s aggression.
Steven Man, councillor of the President and the US State secretary on energetic diplomacy in the Caspian region, was present at the opening ceremony of the Baku-Tbilisi-Jeikhan pipeline construction. Man expressed the position of Bush’s administration. The US government attaches much priority to environmental protection and safety, he said. Man also stressed that the US supported plans of laying energetic corridor. “Nothing should stop it”, he said.
Yet Russia does its best to obstruct the plan. We think that this is the reason of the informational war against Georgia. Thus, Russia tries to deteriorate its relations with Georgia artificially trying to prove vulnerability of the pipeline.
Russia hoped that the Baku-Tbilisi-Jeikhan project would fail. It resorts to “decisive” measures now that the project became a reality. Russia does not seem to be satisfied with its part of the Caspian Sea that is not so rich in resources.
It is noteworthy that Azerbaijan resorts to transit of oil to exert its pressure on Russia in the settlement of Azerbaijani and Armenian conflict. If the pipeline passed through the territory of Russia, Russia’s budget would additionally gain 150 million dollars that might increase by 1/3 by 2005. Logically enough, Russia’s position about the Armenian and Azerbaijani conflict will influence the decision of Azerbaijan with regards to the pipeline route. Now export is possible in both Poti and Batumi ports.
While the official Baku considers the golden route of oil to be the only way of settling Armenian and Azerbaijani conflict, Armenia, in its turn, plans construction of Baku-Tbilisi-Jeikhan, too.
Involvement of the representatives of Armenian Diaspora has caused much controversy. One part of Azerbaijani opposition demands that Aliev’s government should explain the involvement of such disreputable company in the project. The “amalgamated company of shareholders” is registered in Greece. Its board of directors consists of Libanians and Palestinians who have close ties with Armenians.
Devnil Woodword tells that during the search for partner the national background of the company was not taken into consideration. Ukraine tries to find ways of extracting oil in Caucasus and countries of Caspian pool. Thus, Odessa gets ready for the construction of pipeline through which Caspian oil will pass.
What can you say about co-operation with “Ukranian transoil”?
David Tvalabeishvili:
The international oil company of Georgia and Ukrainian firm “Ukr transoil” signed protocol of the agreement providing for joint measures designed to expand corridor of oil transportation through the territory of Georgia. The protocol was signed during the visit of George Chanturia, corporation’s president.
Similar to Georgia, Ukrainian depends on Russia as far as deliveries of gas and oil are concerned. It wishes to be free from Russia and to export Caspian oil by railroad and sea through Georgia.
Negotiations are held now about the restoration of sites built during the USSR as well as inoperative pipelines.
– The main thing is what directions should be put in operation. The further actions depend on this. According to the protocol, the Ukrainian Company will send its experts to Georgia for the examination of oil pipelines and the volume of investments for their rehabilitation.
– According to the recently spread information, one half of the oil volume necessary for the effective work of oil pipeline – about 3 million tons has already been found.
– This statement was made by the Georgian party. The matter is that foreigners have allegedly reached agreement with the Azerbaijani party. This information has still to be checked.
– What does the Russian party think about it?
– It is still a perspective. Russia does not yet see any danger in Ukrainian’s attempts to import Caspian oil past its territory. Ukrainian will not, certainly, depend only on the Caspian oil. It will import some part of oil from Europe and the Black Sea region countries.
– Joint projects of “BTC” and “Ukr transoil” will enable Georgia to appear before the world community as a transit country. However, taking into consideration the data of American Oil Company “Anadarko Georgia Company” about the existence of oil fields in the Black Sea region countries, Georgia will, probably, be numbered with oil-producing countries in the future.