An 1100-mile pipeline opened up today and will pump a million barrels of oil a day when it reaches capacity. A consortium led by BP and funded heavily by the U.S. hopes this new pipeline will help reduce western dependence on middle-eastern oil.
The presidents of Georgia, Kazakhstan Azerbaijan, and Turkey switched on $3.2 billion venture, which should be at full flow by the fall. This is the first time Caspian Sea oil has moved without the help of Moscow too.
The Russian government is perturbed over the situation and tried to talk Azerbaijan out of the deal but Baku wanted to see the money. Traditionally, the oil flowed through Russian pipes to the Black Sea. The profits for the venture will be split between Azerbaijan, Turkey and Georgia on the BTC or Baku/Tblisi/Ceyhan pipeline.
The major issue in the pipeline for this new venture has been and will be security. The pipe runs through some particularly volatile areas in the Caucasus region as civil strife constantly plagues the area. The participants see this project as worth the risk.
Georgia and Azerbaijan for centuries have relied on the goodwill or in some cases the not-so-good will of Moscow for its fortunes. They hope this pipeline will bring money and with the money, investment and stability in the region.
Or as David Woodward, the head of BP’s operations in Azerbaijan, said in the BBC story, that the opening marked the former Soviet republics’, “rebirth as an important country for the oil industry, just as it was more than a century ago”.
“This pipeline first of all will help solve economic and social problems,” said Azerbaijan’s President Ilham Aliev and it will be vital in “strengthening peace and security in the region”.
The oil from the Azeri-Chirag-Guneshli oil field will flow to the Turkish ports on the Mediterranean Sea through the pipeline which has a capacity of 16 million barrels when full and will crank out 1 million barrels a day.
John Stith is a staff writer for Murdok covering technology and business.
