Turkey to Lobby for Oil Pipeline

ANKARA (Reuter)–Two senior Turkish ministers will visit Azerbaijan next month to lobby for an oil pipeline to be built from Baku to Turkey to carry the bulk of the future oil output from the Caspian Sea.

"Foreign Minister Ismail Cem and I will visit Baku on September 5-7 for talks on the pipeline and other bilateral matters," said State Minister Ahat Andican.

He said they would meet Azeri President Gaidar Aliyev and other officials to promote the Turkish view that a pipeline from Baku to the Turkish Mediterranean port of Ceyhan was essential to transport the huge expected oil output from the region.

"Turkey will emphasize the inevitability of the Baku-Ceyhan pipeline for the Caspian oil transportation," he told Reuters.

"The pipeline is the jugular vein for Azerbaijan’s oil and its independence from Russia."

Andican said Aliyev’s talks with US officials earlier this month in favor of the Baku-Ceyhan pipeline had earned points for the Turkish pipeline proposal–masterminded by Turkey as early as 1993–rather than the Russian alternatives.

"Aliyev’s support for the Turkish proposal during his US talks has increased chances for the pipeline option," he said.

Azerbaijan’s Caspian offshore oil fields will be developed over a 30-year period by the Azeri International Operating Company–an $8 billion venture led by British Petroleum Co Plc and Norway’s Statoil.

The initial output from the project–which will develop Caspian fields off the Azeri coast–was planned to come on stream this year if it had not been hampered by the oil transport dispute between Russia and Chechnya.

The other two alternatives considered by AIOC are to carry the oil to the Black Sea ports of Supsa or Novorossiisk after some repair work on the existing pipeline networks passing Georgia or war-ravaged Chechnya–respectively. The oil would later be shipped through Turkey’s busy Bosphorus strait.

Turkey has proposed the pipeline–expected to cost about $2 to $2.5 billion and carry 45 million tonnes of oil a year–to avoid more traffic through the already congested Bosphorus and Dardanelles.

If the pipeline is built–the Caspian oil will arrive at Ceyhan–terminus of a twin pipeline from Iraq’s Kirkuk oil fields–via Georgia or Armenia and eastern Turkey.

The pipeline will be designed to handle further oil output from Kazakhstan in future–Andican said.

"With new oil field development project under discussion–the total output from the Caspian and Central Asia will eventually be 50 to 60 million tonnes a year," he said.

"But the Baku-Novorossiisk and Baku-Supsa routes have a combined capacity for 16 million tonnes (a year). Therefore Baku-Ceyhan pipeline is the most inevitable and stable option to carry the oil."

Industry sources have said the AIOC will decide on the export route or routes in late 1998.

Turkey said earlier it was having talks with oil companies Royal/Dutch Shell–ENI–Chevron and Unocal to form a joint venture to build the pipeline.

Turkish state pipeline company Botas is having a World Bank-financed study done by a German company–PLE–on the feasibility of the Baku-Ceyhan proposal. The study will be completed in February– 1998.

AIOC will initially produce 40,000 to 50,000 tonnes in 1997 and 1.5 million tonnes–or 30,000 barrels per day (bpd) in 1998 from the development of the Chirag–Azeri and Gyuneshli fields.

Full production is scheduled to reach 700,000 to 800,000 bpd by 2007-2010.


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