Aliyev Offers Armenia Pipeline in Return for “Territories”

BAKU (Reuter)–Azerbaijan’s President Gaidar Aliyev said Thursday he was prepared to consider building an oil pipeline through Armenia if Yerevan agreed to the return the so-called occupied territories.

Armenia has so far ruled out a deal involving territory for a pipeline–which could win it big transiting fees for taking millions of tons of Azeri oil to world markets.

Aliyev had also rejected the involvement of a pipeline in a peace settlement over the Nagorno-Karabakh enclave–but when asked about it on Thursday at a briefing for foreign journalists in Baku he said: "Such a variant could be considered."

No comment was immediately available from Yerevan.

If a pipeline were to be built–it would probably be funded by a 13-member international consortium led by British Petroleum and Norway’s Statoil Den norske state oljeselskap.

The consortium signed an $8 billion deal with Azeri government in 1994 to develop three offshore fields and first crude oil from the project is scheduled to come on stream later this year.

The consortium–the Azerbaijan International Operating Company–plans to use two existing pipelines to get early oil to Black Sea outlets but the pipelines do not have the capacity to handle later peak production from the project.

AIOC–which is considering various options–says it will announce where it will build a new pipeline needed to accommodate full production later this year.

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