BAKU (Reuters)–French oil company Total is considering pumping crude oil from its Caspian basin projects in Azerbaijan to world markets through Iran–a senior company official said on Monday.
Patrick Lantigner–Total’s resident representative in Azerbaijan–told a news conference in Baku that Total was considering forming a consortium to fund and build a possible pipeline through Iran.
"The prospective structures in Azerbaijan being worked on by Total as part of international consortiums are close to Iran–and it might be profitable for us to export crude oil along this route and to form a pipeline company," he said.
Lantigner said Total was interested first and foremost in finding the cheapest possible export route for oil from its Caspian projects and so was considering the Iranian option.
The United States–worried about energy security and estranged diplomatically from Tehran for two decades–has tried to isolate Iran as a possible export route for Caspian Sea oil.
The US–Turkish and Azeri governmen’s are lobbying instead for an expensive 1200 mile pipeline to be built from Baku to Turkey’s Mediterranean port of Ceyhan to carry future Caspian output.
But European companies have increasingly expressed interest in Iran–a cheap alternative made more attractive while world crude prices remain at rock-bottom.
British Monument Oil and Gas already exports crude through Iran in a location swap arrangement. Under this agreement–Monument supplies crude to northern Iran to be refined and consumed locally.
Iran in return supplies crude to Monument at a Gulf port–so effectively allowing crude to transit Iran without the need for a pipeline at all.
US companies are prohibited from entering such arrangemen’s–but a western diplomatic source told Reuters in Baku last week that European governmen’s were committed to seeing oil exported through a number of routes–including Iran.
Iran’s ambassador to Baku–Alireza Bikdeli–told Reuters in an interview last week that he was certain the Iranian export route would become "unavoidable."
"Transport of oil across Iran will be something that actually happens," he said.
Total is involved in two projects in Azerbaijan–the $2 billion Elf Aquitane-led Lenkoran-Deniz/Talysh-Deniz consortium–and the $2.5 billion Chevron-led Apsheron consortium developing deep water Caspian fields.
The Lenkoran-Deniz/Talysh-Deniz fields are located in the far southern section of Azerbaijan’s self-declared sector of the Caspian–not far from the Iranian coast.
In the same interview–Bikadeli warned that Azerbaijan was politicizing the oil transport issue–in favor of the West. The Iranian envoy urged Azerbaijan to end this misleading practice.