The Baku-Ceyhan Oil Pipeline—Whether There’s Oil or Not—or Bust

By Andrew I. Killgore

Over two years ago the presidents of Turkey, Georgia and Azerbaijan met in Istanbul to sign an earnest document that an oil pipeline would be built from Baku (Azerbaijan) to Ceyhan (Turkey). To prove their seriousness, then-President Bill Clinton, who flew to Istanbul for the ceremony, signed the document as a witness.

On Sept. 18, 2002, the latest symbolic “let’s-build-the-pipeline” ceremony took place in Baku. The same three regional presidents took part—not to sign another document, but to lay the first pipe section of Baku-Ceyhan, the actual construction of which does not begin until 2003. According to the Associated Press, Secretary of Energy Spencer Abraham attended the Baku ceremony, at which he read a laudatory message from President George W. Bush.

The question, however, remains: from where is the oil to come—it being reckoned that a million barrels a day will be required to make Baku-Ceyhan economically feasible.

Azerbaijan’s own limited oil is exported via a recently expanded pipeline to Supsa, on Georgia’s Black Sea coast. Kazakhstan is studying a pipeline which would run through Iran. Not only would this be a shorter and cheaper route to get its oil to a salt water port, but it would negate the need for an under-Caspian Sea pipeline that Iran and Russia obviously would oppose on environmental and other grounds.

When Secretary of State Colin Powell was in Astara, Kazakhstan’s new capital, earlier this year, President Nursultan Nazarbayev told him that he favored an oil pipeline that would run through Iran to salt water on the Persian Gulf. Powell replied that the United States preferred Turkish and Russian (i.e., non-Iranian) routes.

Everything depends upon Kazakhstan. While another recently expanded pipeline carries oil from Kazakhstan’s huge Tengiz field to Novorossiysk on Russia’s Black Sea coast, the offshore (Caspian) Kashagan field is even larger than Tengiz. A representative in Washington of just-merged Conoco Phillips, however, told the Washington Report that Kashagan will not go into production for another six to ten years.

Originally, all countries with oil interests in the Caspian opposed Baku-Ceyhan. Britain, however, has since joined the U.S. and Israel in supporting the longer, more expensive route. It is Israel, of course, that is behind it all, trying to prove that Turkey’s alliance with the Jewish state pays off in Washington.

The United States has invested a lot in symbolism. Now it is time actually to build Baku-Ceyhan, which is scheduled to take two years to complete—i.e., in 2005. According to Conoco Phillips, however, production from Kashagan will not begin before 2008, and possibly not until 2010.

We may have the Baku-Ceyhan pipeline in 2005, then, but what will be running through it?

Andrew I. Killgore is publisher of the Washington Report on Middle East Affairs.