AZERBAIJAN IRKED BY CONSORTIUM’S PROCRASTINATION ON EXPORT PIPELINE.

IlhanAliev, first vice president of the State Oil Company of Azerbaijan (SOCAR)and son of President Haidar Aliev, has warned that SOCAR may resort tointernational arbitration to resolve differences with the AzerbaijanInternational Operating Company (AIOC). Ilhan Aliev issued this warning intwo press interviews in recent days. AIOC is the consortium involved in the”deal of the century” project to develop the Azeri-Chirag-Guneshli offshoreoilfields.

Differences between SOCAR and AIOC concern financing the cost overruns ofthe project to overhaul the Baku-Supsa pipeline. It has recently transpiredthat the project will cost some US$6 million, approximately double the costprojected initially. AIOC wants SOCAR to finance the additional expenses.Ilhan Aliev for his part is cited as blaming the overruns on initialmiscalculations by AIOC.

The controversy affects the planned Baku-Ceyhan export pipeline for the”big” oil. Azerbaijan wants to double the diameter of the Baku-Supsa lineand use a segment of it as part of the Baku-Ceyhan line. According to IlhanAliev, AIOC’s apparent resistance raises doubts about the consortium’s realintentions with regard to Baku-Ceyhan, as the deadline for a final decisionapproaches. (Turan, Russian agencies, June 9 and 11)

MOSCOW MEDIATION PROLONGS GEORGIAN-ABKHAZ STALEMATE.