Azerbaijan, Turkey & Georgia Agree to BTC Pipeline Security

The governments of Azerbaijan, Turkey and Georgia are to sign a protocol ensuring the security of the Baku-Tbilisi-Ceyhan pipeline, Natik Aliyev, president of SOCAR, said on Tuesday.

"The protocol will show that we do not violate the rights of any peoples on this route, which are protected by international conventions. On the contrary, we are again declaring the protection of the rights of the local population," he said. Aliyev stressed "the signing of this protocol is aimed at putting an end to campaigns by international non-profit organizations against the pipeline."

He also noted that at the moment the document has been submitted to the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development.

A number of international organizations have set up a campaign against the pipeline and have appealed to the governments of leading countries and management at international financial institutions not to finance the construction of the pipeline. These organizations claim that the pipeline violates the interests of a number of peoples along the route of the pipeline and represents an ecological threat.

The future pipeline will stretch 1,767 kilometers (443 km through Azerbaijan, 248 km through Georgia and 1,076 km through Turkey) and will have a capacity of 50 million tons of oil per annum and will require 1.5 million tons of oil to fill it. The cost of the project is estimated at $2.95 billion. It is planned to complete construction work in the fourth quarter 2004 and to start exporting Azerbaijani oil from the port of Ceyhan in May 2005. Participants in the BC project are: British Petroleum (30.1%), SOCAR (25%), Unocal (8.9%), Statoil (8.71%), TPAO (6.53%), Eni (5%), Itochu (3.4%), ConocoPhillips (2.5%), Inpex (2.5%), TotalFinaElf (5%), and Amerada Hess (2.36%).

The cost of the Baku-Ceyhan project is estimated at $2.95 billion. According to the concept for the financing of the project, the participating companies will cover 30% of the cost, and 70% will be borrowed. The IFC and the EBRD are currently considering granting credits of $150 million each. It is planned to receive the remaining funds from private banks, export and insurance agencies and other financial institutions.