The FINANCIAL — “NATO is ready to provide security for the Baku-Tbilisi-Ceyhan (BTC) oil pipeline,” Patrick Gordowin, Deputy Secretary General of the Alliance on reg¬ion told journalists on February 3.
According to Gor¬dowin, the alliance is rea¬dy to provide the secur¬ity of BTC, by the com¬mon agreement of the participant countries. He noted that, during the 2 day regional seminar on Economy, Security and Defen¬se, held in Baku, the possibilities of dan¬ger on BTC were discussed.
The alliance is also ready to provide technical support to the participant count¬ries of the BTC project and protect the pipeline from any possible dangers.
The BTC pipeline, which was one of the key topics discussed at the 7th Georgian International Oil, Gas, Energy and Infrastructure Conference and Showcase (GIOGIE) held in Tbilisi, Georgia on 3-4 April 2008, began operating in June 2006. With a total construction cost of USD 4 billion, the BTC pipeline is the first direct transportation link between the Caspian and the Mediterranean seas. At full capacity, it can deliver one million barrels of oil to market, generating important revenues for the Georgian government for decades to come.
“I had not seen this information, it is a report of what Gordowin is supposed to have said, and therefore I can't comment on it. The NATO public affairs office in Brussels or Gordowin himself would better clarify what NATO is and is not willing to do for the BTC. As for the US interests in Georgia’s oil sector, there are already two successful American players in the field: Anadarko and Frontera,” Robert Kiene, Deputy Chief, Political/ Economic Section of the US Embassy to Georgia, told The FINANCIAL.
Anadarko is the operator of the consortium holding the 8,900 sq.km exploration licence, offshore Georgia (JKX: 4% net profit interest). Following extensive seismic and geological data acquisition, a preferred location for the first exploration well has been identified. This commitment well is dependent on Anadarko attracting additional farm-in partners, following the recent withdrawal of BP and Chevron from the consortium, and securing a suitable drilling rig.
Frontera Resources Corporation is an independent Houston, Texas, U.S.A. – based international oil and gas exploration and production company whose strategy is to identify opportunities and operate in emerging markets around the world. Frontera has operated in Georgia since 1997 where it holds a 100 percent working interest in a production sharing agreement with the Government of Georgia. This gives Frontera the exclusive right to explore for, develop and produce oil and gas from a 5,060 square kilometre area in Eastern Georgia known as Block 12.
“According to the Host Government Agreements that govern the BTC project, provision of security services on the pipelines and its facilities is the responsibility of the Government of Georgia. The Georgian government is responsible for securing the pipelines – as it does any strategic asset inside its borders. Therefore there is not much more we can say on the topic. The question is really one for the government to respond to,” Matt Taylor, Communications and External Affairs Manager of British Petroleum (BP), told The FINANCIAL.
As for NATO’s reasons for hesitation on providing security for the BTC pipeline, Turkish Weekly writes in April 3, 2008 publication that, Geopolitics assumes that every action, even a seemingly irrational one, must have an agenda. Having said that, the decision to lay the Trans-Caucasian pipeline via potentially unstable regions in Azerbaijan, Georgia suffering from separatist conflicts, and Turkey, where the threat of Kurdish PKK terrorist attacks persists, could indirectly facilitate allocation of NATO troops to the conflict zones to secure the stability and protect the pipeline.
“Fears were sounded repeatedly that security of the BTC is in danger from international terrorist organizations and from instability in rural communities. The United States as one of the biggest investors and a promoter of the regional pipeline projects, also an influential NATO member, has reasonable concerns about pipeline security and wishes to protect its investment”.
Some suggest that America wants to ensure its military presence in this geo-strategic territory. Clearly, passing through a turbulent region, the pipelines need special protection from possible terrorist attacks. NATO might see this as its duty to allocate special units in the region, which would strengthen its presence and influence in the South Caucasus and the Caspian. Although, so far NATO officials state there are no plans to get directly involved in the protection of the pipeline, they have offered their assistance in providing “NATO’s military expertise to local security forces.”
“An Antiterrorism Centre was established in Georgia and radar antenna granted to Azerbaijan. Local security corps have already been granted training from NATO-member countries: Georgian Special State Protection Service and Azerbaijani Pipeline Security Service have been trained by American Security Company “Equity International”, whereas the Turkish Gendarmerie received training from Northern Ireland security forces. In addition to this, the three governments jointly with BP Field Security teams have established a special area patrolling force along the route of BTC and BTE from the local population”.
Main news in Georgia especially during the last couple of months has been the April 2008 Bucharest summit of the transatlantic alliance whether the country and its neighbour Ukraine would get to the so-called Membership Action Plan, or MAP. Though, eventually, due to the strong opposition from Germany and France, the two countries’ route to MAP has been postponed till the end of 2008. Germany and France were said to have been blackmailed by Russia and urged to deliver negative voting.
During the Bucharest summit representatives of the 26 legislatures of NATO agreed to the accession of Croatia, Republic of Macedonia, and Albania and invited them to join NATO.
Speaking jubilantly to Georgian journalists in Bucharest, President Saakashvili said that the NATO summit’s eventual outcome was much better than receiving the Membership Action Plan, which Tbilisi was denied at this stage.
“I am sure that we will become NATO member much sooner than my presidential term expires,” declared the President.
Apart from the BTC pipeline issue, unlike Russia, Germany and France, the U.S.A has a rather positive outlook about Georgia joining NATO. The U.S President Bush said he would like to see Georgia become a NATO member at some point.
In the analysis of 2007, JOHN C.K. DALY, UPI International Correspondent claims that The Azeri, Georgian and Turkish governments may not have to go it alone in providing BTC protection, as NATO is already considering the issue of the BTC pipeline security. Speaking after a recent NATO summit in Riga, Robert Simmons, the NATO secretary general’s special representative for the Caucasus and Central Asia, said the issue of protecting energy infrastructure belonging both to NATO members and their partners was on the agenda.
The Baku-Tbilisi-Ceyhan (BTC) pipeline, which carries Caspian oil to world markets via the Haydar Aliyev terminal in Ceyhan, keeps earning Turkey significant amounts of revenue. As of March the BTC pipeline had transported 333 million barrels, earning revenue of USD 1.5 billion.
BTC transported 750,000 barrels of crude oil per day during the first quarter of 2008, adding that their goal is to increase the daily capacity to 840,000 barrels by the end of this year.
Approximately USD 3.4 billion was invested in the BTC project, which carries crude oil from Azerbaijan to the port in Ceyhan via Georgia and onwards to the rest of the world. The 1,776-kilometer-long BTC, of which 1,076 kilometres pass through Turkey, has a full transport capacity of 1 million barrels per day and 50 million tonnes per year.
As Turkish Daily News reported on January 17, an economically and socially healthy Georgia, cooperating with its new allies on all aspects of security, will stabilize the Black Sea and provide a solid beachhead for the East-West corridor. In sum, Georgia in NATO is the best way to maximize the potential of that first train engine that will make its way from Kars to Baku in 2010, and Turkey should lead its NATO partners to this realization.
GIOGE key topics
GIOGIE has become the traditional annual forum attracting over 250 delegates from 15 countries. The conference was officially supported by the Prime Minister of Georgia, Ministry of Energy of Georgia, Ministry of Economic Development, and Georgian Oil & Gas Corporation (GOGC). Senior level delegations from USA, UK, Turkey, Kazakhstan and Azerbaijan attended GIOGIE.
“Georgia’s role as a transit state and principal regional player is hard to underestimate. Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzrum and Baku-Supsa represent projects of regional importance. Within the framework of these projects GOGC acts as a monitor of the process thus representing the state’s interest during the operation/implementation phase of the “contracts of the century”, Zurab Janjgava, the General Director of GOGC, told The FINANCIAL.
In Janjgava’s words, GOGC together with foreign investors participating in oil production totalled 56,630.72 tonnes of crude oil and 24,606,251 cubic metres of gas production in the year 2007. An entire volume of crude oil has been exported from Georgia.
“With the financial support of the US government, GOGC is in the second stage of an energy infrastructure rehabilitation project financed under the Millennium Challenge Compact,” stated Janjgava.
The South Caucasus gas pipeline and the BTC (Baku-Tbilisi-Ceyhan) pipeline allow oil and gas to flow from Azerbaijan through Georgia to Europe. Over the last decade, USD 5 billion has been invested by BP and its partners into development of the major oil and gas pipelines that cross Georgia.
Reconstruction work on the Batumi Oil Terminal is now complete and reconstruction of the Poti port is currently underway. Construction of a new, Kulevi Oil Terminal, operated by SOCAR, will be completed this year.
“Nowadays a quarter of the Georgian market is controlled by SOCAR products, that’s 200 thousand tonnes and in 2008 the figure will reach 300 thousand. We plan to invest USD 100 million in Georgia in 2008. The aggressive retail approach development in the country has been reflected in SOCAR turnover – USD 400 million. Since April 25 we’ll exploit the very first complex including 15 filling stations and by the end of 2009 I assume the number will reach 32-33,” Elshad Nassirov, Vice President of SOCAR, Azeri State owned company, told The FINANCIAL.
Written by Kate Tabatadze
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