WASHINGTON (Noyan Tapan)–US financial institutions pledged to finance the construction of a proposed Baku-Ceyhan pipeline only if proposed plans are deemed financially profitable and all sides can agree to share in the realization of the project.
This conclusion was articulated by a US official–following meeting with Turkish and Azeri officials in Washington on the future of the proposed pipeline which aims to connect Baku to the Turkish Mediterranean port city of Ceyhan for the transport of Azeri oil to the West.
The focal point of the discussions was a plan introduced to OPIC–Eximbank and IMF representatives by Turkey.
Sources said that according to the Turkish plan–the construction of the Baku-Ceyhan pipeline would cost Turkey $2.4 billion–which that country said would be able to pay and cover extra costs.
However–independent sources told OPIC–Eximbank and IMF officials that the recent earthquake in Turkey would make it difficult for Turkey to guarantee paymen’s of loans from these institutions–which were willing to put up some $1 billion.
Turkey would have a difficult time to become a guarantor of loans–as it is stipulated by the international consortium of oil companies operating in Azerbaijan.
The damage of the earthquake is estimate at $30 billion and the government of Turkey was advised to focus most of its resources toward the reconstruction of the earthquake zone.
"Turkish officials have assessed the earthquake damage at $30 billion… At this rate Ankara may barely be able to make its $2.4 billion payment share in the pipeline construction," an Amoco official said Tuesday.
In the past the consortium of Western oil companies in Azerbaijan has called into question the feasibility of the pipeline–given the costs associated with the construction and maintenance of the pipeline. The governmen’s of Turkey–Azerbaijan and the US have all advocated for the construction of the pipeline.
The Amoco representative also pointed out that discussions in Washington by Turkish and Azeri groups promoting the Baku-Ceyhan idea were held "in an atmosphere of inertia."