Tweet
RFE/RL Caucasus/Central Asia: Analysts Expect Security, Economic Gains
From BTC Pipeline
Wednesday, 25 May 2005
By Jean-Christophe Peuch
The leaders of Azerbaijan, Georgia, Turkey, and Kazakhstan gathered near
Baku today to inaugurate the $4 billion Baku-Tbilisi-Ceyhan (BTC)
pipeline. The project is generally viewed as the key element of an
overall plan to turn the Caucasus region into a transport corridor
connecting Central Asia to Western Europe. From the onset, BTC was
designed by its American sponsors as a way to reduce Russia's energy
grip on its former southern satellites. But regional experts say that by
helping make the region safer, the project's expected economic benefits
might eventually outweigh its geostrategic importance. [For coverage of
the ceremony, see "Caspian-Mediterranean Oil Pipeline Launched In Baku".]
Prague, 25 May 2005 (RFE/RL) -- The inauguration represents the final
touch on the "deal of the century" -- as the 1994 contract that for the
first time grants Western oil majors the right to produce oil in newly
independent Azerbaijan is known.
Provided revenues from the shipping of crude oil to western markets are
redistributed to local populations, both projects are expected to bring
the Southern Caucasus region substantial economic benefits.
Economist Sandro Tvalchrelidze of Georgia's Academy of Natural Sciences
said that even before the first Azerbaijani oil is pumped, BTC -- once
former President Eduard Shevardnadze's pet economic project -- has
already brought substantial revenues.
"With regard to [BTC's] economic aspect, it must be noted that its
construction alone has -- directly, or indirectly -- contributed to 2
percent of Georgia's gross domestic product," Tvalchrelidze said.
"Therefore, one can say that already the project is economically very
profitable for Georgia and the rest of the region."
Tbilisi, which depends heavily on Russia for its energy imports, hopes
both pipelines will help loosen Moscow's grip on its economy. As a
transit country, Georgia will also get part of its new energy supplies
for free.
Despite its enormous cost, BTC is considered to be of vital importance
for Azerbaijan, as it will help turn the country into a major energy
exporter.
Important New Option
Early oil produced by the BP-led consortium had been until today
transiting through two smaller pipelines -- to the Georgian port of
Supsa and the Russian Black Sea terminal of Novorossiisk, from where it
was put on tankers heading to the clogged Turkish straits.
Even though Baku's contribution to world energy supplies will be lower
than originally expected, the United States sees Azerbaijan as an
alternative supplier to Middle Eastern countries. Washington has also
made no secret that BTC and its sister natural-gas pipeline were
primarily targeting Russia and Iran.
Vafa Quluzade, a former foreign policy adviser to late Azerbaijani
President Heidar Aliyev, told the Baku-based Trend news agency on 23 May
that by paving the way for U.S. predominance in the Caucasus, BTC
"carries a special geopolitical and geostrategic importance."
Iran remains strongly critical of the U.S.-sponsored project. But that's
no longer the case for Russia.
Moscow -- which has a 10 percent stake in the Baku-Tbilisi-Erzurum
project -- now says that BTC is economically viable, and last year it
even floated the idea of connecting its own pipeline network to
Azerbaijan's main export conduit.
Tofiq Zulfuqarov, who was Azerbaijan's foreign minister in the late
1990s, told RFE/RL that he believes BTC's geopolitical aspect, while
remaining important, will eventually become secondary to its economic
impact.
"Starting from today's inauguration, I believe, the political aspect of
BTC is becoming of secondary importance," Zulfuqarov said. "During the
initial phase of the project, when its layout and plans were still being
discussed, the political aspect was of primary importance. But now this
pipeline is becoming more and more a full-fledged economic project. I
don't think the difficulties -- be they [real] or potential -- Russia
once created with regard to the pipeline's layout are still a very
important element. All the more so that I do not rule out that Russia
will one day be interested in injecting both foreign and domestic
capital into the development of its own sector of the Caspian shelf. In
that case, [BTC] could well become a transit route for Russian oil as well."
Energy experts said they believe BTC might be attractive to other
oil-producing countries -- especially those of Central Asia.
On 24 May, Kazakhstan -- which expects to produce 150 million tons of
oil every year by 2015 -- officially announced plans to export part of
its output through BTC after an underwater connection linking the city
port of Aktau to Baku is built.
It remains unclear whether or when these plans -- unveiled in Baku by
visiting Kazakh President Nursultan Nazarbaev -- will be implemented.
Kazakhstan's participation in BTC had long remained an object of
speculation, if only because of Nazarbaev's insistence on maintaining
energy ties Russia, China, and Iran.
Yet Zulfuqarov said he believes that, whatever practical effect it might
have, Nazarbaev's Baku announcement is a sign of the times.
"My opinion is that because of [BTC], the weight of geopolitics -- or,
say, the clash of diverging geopolitical interests -- is no longer of
primary importance," Zulfuqarov said. "It's no longer the hot topic it
used to be."
Georgian economist Tvalchrelidze said he believes the more countries
join BTC, the better it is for regional security.
"I believe that the idea of regional security is what prevails here,"
Tvalchrelidze said. "Had this pipeline been under construction in the
years 1991 to 1992, for example, Georgia would never have gone into
trouble with [its separatist republics] of South Ossetia and Abkhazia.
The reactions of the world community to these conflicts would have been
totally different -- maybe even similar to that we've seen [recently] in
Iraq."
Tvalchrelidze also said he believes BTC might even have a positive
impact of the war in Chechnya, since the pipeline could help cut many
potential channels of oil contraband -- one of the main sources of
revenues for both Russian army generals and Chechen fighters.
In his words, "BTC will certainly make the [Caucasus] region safer."
"Some 38 countries are implicated -- directly or indirectly -- in those
energy projects," Tvalchrelidze said, "so the world community will be
interested in making the region safe."
http://www.rferl.org/featuresarticle/2005/05/f86368e4-b2ed-4996-8ca1-5684ca8516ad.html
From BTC Pipeline
Wednesday, 25 May 2005
By Jean-Christophe Peuch
The leaders of Azerbaijan, Georgia, Turkey, and Kazakhstan gathered near
Baku today to inaugurate the $4 billion Baku-Tbilisi-Ceyhan (BTC)
pipeline. The project is generally viewed as the key element of an
overall plan to turn the Caucasus region into a transport corridor
connecting Central Asia to Western Europe. From the onset, BTC was
designed by its American sponsors as a way to reduce Russia's energy
grip on its former southern satellites. But regional experts say that by
helping make the region safer, the project's expected economic benefits
might eventually outweigh its geostrategic importance. [For coverage of
the ceremony, see "Caspian-Mediterranean Oil Pipeline Launched In Baku".]
Prague, 25 May 2005 (RFE/RL) -- The inauguration represents the final
touch on the "deal of the century" -- as the 1994 contract that for the
first time grants Western oil majors the right to produce oil in newly
independent Azerbaijan is known.
Provided revenues from the shipping of crude oil to western markets are
redistributed to local populations, both projects are expected to bring
the Southern Caucasus region substantial economic benefits.
Economist Sandro Tvalchrelidze of Georgia's Academy of Natural Sciences
said that even before the first Azerbaijani oil is pumped, BTC -- once
former President Eduard Shevardnadze's pet economic project -- has
already brought substantial revenues.
"With regard to [BTC's] economic aspect, it must be noted that its
construction alone has -- directly, or indirectly -- contributed to 2
percent of Georgia's gross domestic product," Tvalchrelidze said.
"Therefore, one can say that already the project is economically very
profitable for Georgia and the rest of the region."
Tbilisi, which depends heavily on Russia for its energy imports, hopes
both pipelines will help loosen Moscow's grip on its economy. As a
transit country, Georgia will also get part of its new energy supplies
for free.
Despite its enormous cost, BTC is considered to be of vital importance
for Azerbaijan, as it will help turn the country into a major energy
exporter.
Important New Option
Early oil produced by the BP-led consortium had been until today
transiting through two smaller pipelines -- to the Georgian port of
Supsa and the Russian Black Sea terminal of Novorossiisk, from where it
was put on tankers heading to the clogged Turkish straits.
Even though Baku's contribution to world energy supplies will be lower
than originally expected, the United States sees Azerbaijan as an
alternative supplier to Middle Eastern countries. Washington has also
made no secret that BTC and its sister natural-gas pipeline were
primarily targeting Russia and Iran.
Vafa Quluzade, a former foreign policy adviser to late Azerbaijani
President Heidar Aliyev, told the Baku-based Trend news agency on 23 May
that by paving the way for U.S. predominance in the Caucasus, BTC
"carries a special geopolitical and geostrategic importance."
Iran remains strongly critical of the U.S.-sponsored project. But that's
no longer the case for Russia.
Moscow -- which has a 10 percent stake in the Baku-Tbilisi-Erzurum
project -- now says that BTC is economically viable, and last year it
even floated the idea of connecting its own pipeline network to
Azerbaijan's main export conduit.
Tofiq Zulfuqarov, who was Azerbaijan's foreign minister in the late
1990s, told RFE/RL that he believes BTC's geopolitical aspect, while
remaining important, will eventually become secondary to its economic
impact.
"Starting from today's inauguration, I believe, the political aspect of
BTC is becoming of secondary importance," Zulfuqarov said. "During the
initial phase of the project, when its layout and plans were still being
discussed, the political aspect was of primary importance. But now this
pipeline is becoming more and more a full-fledged economic project. I
don't think the difficulties -- be they [real] or potential -- Russia
once created with regard to the pipeline's layout are still a very
important element. All the more so that I do not rule out that Russia
will one day be interested in injecting both foreign and domestic
capital into the development of its own sector of the Caspian shelf. In
that case, [BTC] could well become a transit route for Russian oil as well."
Energy experts said they believe BTC might be attractive to other
oil-producing countries -- especially those of Central Asia.
On 24 May, Kazakhstan -- which expects to produce 150 million tons of
oil every year by 2015 -- officially announced plans to export part of
its output through BTC after an underwater connection linking the city
port of Aktau to Baku is built.
It remains unclear whether or when these plans -- unveiled in Baku by
visiting Kazakh President Nursultan Nazarbaev -- will be implemented.
Kazakhstan's participation in BTC had long remained an object of
speculation, if only because of Nazarbaev's insistence on maintaining
energy ties Russia, China, and Iran.
Yet Zulfuqarov said he believes that, whatever practical effect it might
have, Nazarbaev's Baku announcement is a sign of the times.
"My opinion is that because of [BTC], the weight of geopolitics -- or,
say, the clash of diverging geopolitical interests -- is no longer of
primary importance," Zulfuqarov said. "It's no longer the hot topic it
used to be."
Georgian economist Tvalchrelidze said he believes the more countries
join BTC, the better it is for regional security.
"I believe that the idea of regional security is what prevails here,"
Tvalchrelidze said. "Had this pipeline been under construction in the
years 1991 to 1992, for example, Georgia would never have gone into
trouble with [its separatist republics] of South Ossetia and Abkhazia.
The reactions of the world community to these conflicts would have been
totally different -- maybe even similar to that we've seen [recently] in
Iraq."
Tvalchrelidze also said he believes BTC might even have a positive
impact of the war in Chechnya, since the pipeline could help cut many
potential channels of oil contraband -- one of the main sources of
revenues for both Russian army generals and Chechen fighters.
In his words, "BTC will certainly make the [Caucasus] region safer."
"Some 38 countries are implicated -- directly or indirectly -- in those
energy projects," Tvalchrelidze said, "so the world community will be
interested in making the region safe."
http://www.rferl.org/featuresarticle/2005/05/f86368e4-b2ed-4996-8ca1-5684ca8516ad.html