Publication: Monitor Volume: 4 Issue: 206

The multinational Azerbaijan International Operating Company (AIOC), holder of the US$8 billion “contract of the century” in Caspian oilfields, seems to be developing internal disagreements regarding the choice of the Main Export Pipeline (MEP) for Caspian oil. Although AIOC envisioned from the outset the Baku-Georgia-Ceyhan (Turkey) route as the leading option, the consortium–most notably, its leader British Petroleum–recently developed strong reservations against that route. Yet the assumption remained that the MEP, whatever the route, would be an AIOC project.

Yesterday, however, Amoco Eurasia President and CEO Charles Pitman urged that the effort to lay the MEP must “go forward independently from AIOC.” Pitman called for setting up a separate MEP company as soon as possible, “so that a truly regional solution to a truly regional problem can be found.” He also urged “anyone with a stake in getting Caspian oil to the market to sign up.” Pitman further announced that AIOC has yet again postponed a formal decision on the choice of route for the MEP. Significantly, he played down the importance of AIOC’s decision-in-waiting, which is expected to be adverse to Baku-Ceyhan. Pitman describes that situation as “only a recommendation” (FWN Energy Reporter (London), November 5).

The suggestion seems to respond to the interests and proposals of the United States, Azerbaijan, Georgia and Turkey–advocates of the Baku-Ceyhan project precisely in the regional framework referred to by the Amoco chief. Those four countries, plus Kazakhstan and Uzbekistan, recently signed the Ankara declaration expressing readiness to lay the MEP on that route. Baku-Ceyhan need no longer be an AIOC project, but–as yesterday’s statement suggests–some AIOC members are prepared to team up with the region’s countries and move forward on Baku-Ceyhan.