Publication: Monitor Volume: 3 Issue: 200

Azerbaijan’s State Oil Company (SOCAR) yesterday began pumping oil through the Russian section of the Baku-Novorossiisk pipeline. An initial, experimental charge of 2,500 tons crossed the Azerbaijan-Russia border into Dagestan on its way to the Chechen section of the pipeline. The main buyer of the oil at this stage is Russia’s LUKoil company, which apparently plans to reexport it from Novorossiisk. SOCAR now plans to export 120,000 tons of oil until the end of 1997 if the condition of the pipeline, particularly of its Chechen section, so permits. Oil transport on this route had been scheduled to begin last March, and Azerbaijan had filled its section of the pipeline with oil back in February. However, the poor condition of the pipeline’s Russian sections — particularly but not only the Chechen section — caused repeated delays. While welcoming the opening of the route, Baku regards it mainly as a stop-gap solution until other pipelines become operational.

The pipeline to Novorossiisk is mainly destined to carry the "early" oil of the Azerbaijan International Operating Company (AIOC). The first early oil is due on stream on November 12. The amounts to be routed to Novorossiisk are projected to rise to 5 million tons annually by the year 2002. (Turan, Russian agencies, October 25) That amount, however, is meager compared to the "main oil" which is due on stream after 2002.

Even as the Novorossiisk route is opening, Azerbaijan and its foreign partners are confirming their preference for transporting most of the "early" and "main" oil on routes that circumvent Russia. Azerbaijani president Haidar Aliev and UNOCAL president John Imle discussed yesterday in Baku the planned opening of the Baku-Supsa (Georgia) pipeline for early oil, and the projected Baku-Ceyhan (Turkey) pipeline for the bulk of main oil. The Supsa route is due to become operational next year. And Turkish foreign minister Ismail Cem stated after talks with his Azerbaijani counterpart, Hasan Hasanov, that financial and political backing for the Baku-Ceyhan project, estimated to cost $2.5 billion, is no longer in any doubt. (Anatolia News Agency, Turan, October 23-25)

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