User Guide

Azerbaijan’s Oil to Flow
Publication Foreign Report
Date
1996 Sep 26
Volume/Issue 000/2417
The so-called “Contract of the Century,” a $10-billion scheme to bring oil from
beneath Azerbaijan’s bit of the Caspian Sea to western markets, will start soon.
When going at full speed, it will alter the world’s energy map and help to make
Azerbaijan and Georgia financially independent of Russia.
The idea is to start to pump “early oil,” which is easy to exploit, by next summer. It
will take two routes. One will be north by pipeline to the Russian Black Sea oil
terminal at Novorossiysk and thence, via the Bosporus, to overseas markets. On
its way to Novorossiysk, it will pass through Grozny, capital of war-torn Chechnya,
where installations have been damaged but not put out of action. Since the
pipeline already exists, it should be possible to use it as soon as oil is pumped in
fairly large quantities; the maximum for “early oil” is about 100,000 barrels a day.
The second route will be through Georgia to the Black Sea terminal of Poti. An old
pipeline along part of the route needs to be refurbished, and a new pipeline has to
be built along the rest of the route. It should be ready by 1998. The oil pumped to
Poti may be shipped across the Black Sea to Romania (for countries on the
Danube-Rhine waterway by barge), Bulgaria (for Greece), Ukraine and through
the Bosporus. This oil is now being marketed for long-term buyers.
The Big One
When the oil is produced at full speed at more than 700,000 barrels a day,
however, a bigger pipeline and terminal will be needed. These have not yet been
chosen by the BP-led consortium. However, we predict that it will choose a route
from Baku, Azerbaijan’s capital, through Georgia and Turkey to the Mediterranean
port of Ceyhan (where a terminal already exists for Iraqi oil). This would take up to
two years to build.
6: CAMPAIGNS
6.15