This week a ceremony will be held in
Azerbaijan to mark the actual operational
phase of the Baku-Tblisi-Ceyhan pipeline. The pipeline will be the main route
for export of the Caspian Sea oil to world markets. The decision
to build the controversial pipeline was first made by
Azerbaijan,
Turkey,
Kazakhstan and
Georgia in 18 Nov.
1999. At
that time they singed a document called “Istanbul Declaration”. The United
States President, Bill Clinton was then in
Turkey for a formal visit and he signed
the Istanbul Declaration as a witness. They agreed that Baku-Tbilisi-Ceyhan (it
is in fact read as Jeyhan because the letter “C” in Turkish stand for “j”) would
be the main export pipeline for oil produced in the
Caspian Basin.
The pipeline had something for
everyone. As far as Turkey was concerned it
meant:
1-
A great role in export of oil from
the Caspian region.
2-
Transportation of the Caspian oil to
the Turkish port of Ceyhan, therefore avoiding the pollution
sensitive area in the other side of Bosphors and
Dardanelle.
3-
Expansion of
Turkey’s political and economic ties with
the concerned countries in the Caucasus and Central Asian countries,
especially with Azerbaijan in pursuance of pan-Turkish
ideas.
4-
Transit rights and a good source of
financial gain.
5-
A step to set aside
Iran as a regional rival. In this
rivalry, besides other ideas, Turkey plays the role of secular western
style government as opposed to the radical Islamic formula of
Iran.
As far as the
Republic of Azerbaijan was concerned, it
meant:
1-
A great achievement in pipeline
diplomacy of the Caspian Sea.
2-
Financial gains out of export of
Azeri oil to the western markets.
3-
Establishment of Azerbaijan as a
reliable source of energy for the western countries, and therefore helping
Azerbaijan in its struggle to get more involved in international scene as a
European country, and possible step to acceptance of Azerbaijan as a full member
of the EU and NATO.
4-
Possible gains out of export of
other Caspian Sea states.
As far as
Kazakhstan was concerned, it
meant:
1-
A possible way for oil exports from
this landlocked state.
2-
Better relations with the western
countries. Less criticizes of the undemocratic system in
Kazakhstan.
3-
A step towards its long declared
policy of “Multiple pipelines” with its special
interpretation.
Georgia was looking
to:
1-
Transit rights for export of oil
from other countries.
2-
Becoming more important for the
regional peace, especially taking into consideration the role of Chechen rebels
and the Russians plans for them.
As far as the
USA was concerned, it
meant:
1-
A step towards export of oil from
the Caspian resources to the Western markets in order to decrease the degree of
dependence on the Persian Gulf oil.
2-
A step in line with the policy of
the US government for denying both Iran and Russian Federation from benefiting
oil and gas pipelines of the Caspian region in order to block the expansion of
their influence and also denying any financial gains for them (which gives these
countries more foreign exchange to follow the policies and buy things that the
US did not like them).
3-
Reduction of the degree of
dependence of Caspian countries on the existing network of Russian
pipelines.
4-
Helping the countries close to the
US
(Azerbaijan,
Turkey and
Georgia).
However, the
Baku-Ceyhan pipeline had still many problems. Some of them were as
follows:
1-
The expenses of Baku-Ceyhan pipeline
were very high. It was originally estimated to cost 3 to 4 billion dollars.
2-
Some sources claimed that
Baku-Ceyhan pipeline was a political pipeline and it would crash eventually
under the pressure from economics. Some people thought that the political
barriers in relations between Iran and the
USA might be removed by developments in
Iran. In that case the Americans might
stop opposing the Iranian route, which was the most economical way to export the
Caspian oil and gas products. For the same reason, the Iranian officials in
charge of Caspian affairs declared decisively after the conclusion of the
Istanbul Declaration that the Baku-Ceyhan would never be built and it was going
to stay on paper forever.
3-
Some experts argued that there was
not enough oil in the concerned areas to justify the Baku-Ceyhan pipeline.
4-
The 1760 kilometers pipeline was too
long and crossed politically volatile areas such as Georgian territory which was
an unstable territory.
5-
The Baku-Ceyhan pipeline crossed too
many countries in its way.
After several years
of discussions and meeting in various political and technical levels the
Baku-Ceyhan pipeline was built. The
pipeline is 996 millimeters in diameter, and 1760 Kilometers long.
What eventually led
to the construction of the pipeline were:
1-
Position of
US government in denying
Iran and the
Russian
Federation the benefits of passing oil and gas
routes from those countries is more strategic than was thought. It seems that
even in case of a fundamental change in the regime of
Iran or
Russia, still US prefers the main
pipelines do not pass through Iran or
Russia.
2-
Iran has already lost the chance for a
fundamental change in its relations with the West. The pipelines have to be built and when
they are in place, no body is going to change them.
3-
The Western countries, especially
the USA, following the 9/11 terrorist
attacks in US, are more determined to find alternative oil resources for the oil
from Arab countries that may be endangered because of special relations of the
USA with
Israel.
4-
Kazakhstan has concluded a strategic oil and
gas treaty with the USA. According to this treaty they have
agreed to try connecting Kazakhstan’s oil to the Baku-Ceyhan route.
This meant a great breakthrough in answering the question of enviable oil for
exports through the Baku-Ceyhan pipeline and it had a considerable role in
making Western oil companies interested in following the Baku-Ceyhan project.
Kazakhstan was originally one of the
signatories of the Istanbul Declaration. During the negotiations for Istanbul
Declaration, the Kazakh president had presented a separate statement in support
of Baku-Ceyhan pipeline, which was then attached to the Istanbul Declaration.
However, following the Istanbul summit meeting, the Kazakh
officials showed some doubts in going along with the planned pipeline. They even
made it clear in several occasions that Kazakh interpretation of “Multiple Pipelines Idea” was different
from the US interpretation. The main difference
was that Kazakhstan considered the Iranian route as a
possible way that should be considered. It seems that several points changed the
Kazakh position in this regard:
A-
The new expansion of
Kazakhstan relations with the
USA. In addition to previous ties,
during the US operations in the region against
the terrorism, which included the operation in
Afghanistan,
Kazakhstan proved to be a good ally. They
offered facilities to the US authorities that even long time
US allies were reluctant in offering
them.
B-
Conclusion of agreements between
Kazakhstan and the
Russian
Federation, and also between
Kazakhstan and
Azerbaijan Republic regarding division of the
Caspian
Sea’s
seabed according to the “Modified
Median Line”. This gives the
Kazakhstan the biggest share of the
Caspian
Sea’s
seabed (about 28 %). Now, Kazakhstan is more focused on the issue of
getting its oil to the world markets in any possible way.
C-
No progress was achieved in the
option of Iranian route.
D-
Discovering of new oil and gas
fields in Kazakhstan.
5-
The
Russian
Federation has reduced the degree of its
opposition to the Baku-Ceyhan pipeline. This is partly due
to:
A-
The new policy of
Russia in establishment of closer
relations with Azerbaijan. Russians may even get themselves
involved in building or investing of the pipeline (for example, through buying a
small part of the SOCAR’s shares).
B-
Persuasion of Azerbaijan Republic to
finalize the agreement between Russian Federation and Azeri officials regarding
the division of the Caspian Sea’s seabed according to Russian formula of
“Modified Median Line”.
C-
Discovery of new oil fields in the
Russian section of the Caspian Sea.
D-
New Russian cooperation with the
Western countries, especially the
USA in getting the Caspian oil and gas
to the world markets.
It seems that
Iran is the biggest loser here.
About the author:
Dr. Bahman Aghai
Diba is a consultant on international law affairs for several
US companies in
Washington DC area.
