ExxonMobil and ChevronTexaco Consider Underwriting Pipeline

ExxonMobil and ChevronTexaco are exploring the possibility of building a $1.13 billion trans-Balkan pipeline to ship oil west from the Caspian and Black Seas. The Albanian, Macedonian and Bulgarian Oil Corporation (AMBO) company officials are in regular discussions with ChevronTexaco and ExxonMobil to examine various aspects of the project.

The project has been on the table since 1996 and envisages carrying Caspian oil from Bulgaria to Albania via Macedonia, bypassing the heavily used Bosphorus Straits through Turkey. AMBO, registered in the U.S., has letters of acceptance from the governments of the three Balkan countries for the 560 mile underground pipeline linking Bulgaria's Black Sea port of Bourgas to the Albanian port of Vlora. The pipeline would have a daily capacity of 750,000 barrels.

The project would be fully financed by Western companies and the three Balkan countries just had to provide institutional support. The main consumers of the oil carried through the trans-Balkan pipeline would be northwestern Europe and the United States rather than the Mediterranean region.

America's own crude resources are declining rapidly and it already imports over 50 percent of its annual needs. Europe enters in a similar situation - reserves in the north are declining and it will start running out of oil supplies around 2010. AMBO was confident that another planned 700 million euro ($607 million) pipeline sending crude from Russia to Greece via Bulgaria would not threaten its own project as the two had targeted different investors and consumers. The second project envisages carrying 35 million tons of crude per year from Russian port of Novorossiisk by tanker to Bourgas in Bulgaria, from where the 256 km underground pipeline will transfer the oil to Alexandroupulis in northeastern Greece. Bourgas-Alexandroupulis is going to be decided by Russia, Bulgaria and Greece with the help of Russian oil companies. The decision for Bourgas-Vlora will be made by Western firms supported by the U.S. and Europe.