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.
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.
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
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
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
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
"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."
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
In his words, "BTC will certainly make the [Caucasus] region
"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."