Caspian Oil Pipeline Deal
In a policy victory for the Clinton administration, Turkey, Azerbaijan and Georgia signed a deal Thursday to build a pipeline that would send the oil riches of the Caspian Sea to international markets without going through Russia or Iran.
President Clinton looked on as leaders of the three nations signed a series of accords to build a pipeline for gas and oil from the rich fields of Azerbaijan to Turkey's Mediterranean port of Ceyhan.
Â"These pipelines will be an insurance policy for the entire world by helping to ensure our energy resources pass through multiple routes instead of a single chokepoint,Â" Mr. Clinton said.
The agreement was signed in the former Ottoman Ciragan Palace on the shores of the Bosporus Strait.
The 1,080-mile oil pipeline, which is expected to cost at least $2.4 billion, would cross through the former Soviet Republic of Georgia to Turkey.
Georgian President Eduard Shevardnadze said the accord heralded new cooperation between Â"reliable partnersÂ" in the Caspian region.
Russia has been a chief competitor for the proposed deal and had been trying to persuade Azerbaijan to agree to a pipeline through Russia.
Iran had favored an oil swap deal in which Azerbaijani oil would be sold in northern Iran and oil from fields in southern Iran would be sold on Azerbaijan's behalf. That deal would have saved transportation costs for both countries.
Earlier, Sandy Berger, Mr. Clinton's national security adviser, denied that the United States is supporting the pipeline because it objects to Russia's stand in Chechnya.
Â"This (the pipeline) is not directed against Russia in any way,Â" Berger said. Â"I think not only the United States but, more importantly, the countries in the region and the international oil companies have believed that it's importantÂ" to create other routes for transporting oil.
The signing came at the sidelines of a summit of the Organization for Security and Cooperation in Europe, where Russia faced sharp criticism for its brutal fight against Chechen rebels.
There are still questions as to whether the deal is economically viable.
Officials at BP-Amoco, the main Western oil company working in the Caspian oil fields, have said that early estimates of massive oil reserves in the region may have been overstated.
Azerbaijan is currently producing about 100,000 barrels of oil a day, about one-tenth of the 1 millions barrels a day that would make the project viable, experts say.
Israfil Mamedova of the Azerbaijani state oil company was optimistic, saying that Â"as soon as investments are made, production will increase.Â"
But some experts point out that it could cost billions of dollars in infrastructure to bring Azerbaijan's oil industry up to the level where it could fully utilize the proposed pipeline.
Critics also note that once the accords are signed, the hard negotiations between govrnments and oil companies over financing will only begin.
Written by Louis Meixler
©1999 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed