UKRAINE PINS HOPE ON CASPIAN OIL VIA GEORGIA.

Visiting Georgia on December 7-8, Ukrainian Prime Minister Valery Pustovoytenko called for assigning priority to the Baku-Supsa (Georgia) pipeline, rather than the Baku-Ceyhan (Turkey) route, for the export of Caspian oil. Pustovoytenko urged prompt action to form an international consortium which would create and operate an oil transport system from Georgia across the Black Sea to Ukraine and further into Poland to the Baltic Sea. The route, by tanker from Supsa to Odessa and by pipeline from Odessa to Brody and Adamowa Zastawa and further to Gdansk, is the shortest route from the Caspian Sea to Central Europe and the Baltic Sea. Under this project, Ukraine would process part of the Caspian crude oil for its internal needs and would transit another part to the promising Polish, German and Baltic markets. Anxious to reduce its dependence on Russian oil, Kyiv would like to begin importing up to 15 million tons of Caspian oil annually by the year 2000 (Ukrainian agencies, December 8).

Until recently, Ukraine had supported the Baku-Ceyhan route with a possible branch-off to Samsun on Turkey’s Black Sea coast, whence a portion of the oil could have been tanked to Ukraine. Kyiv had described the trans-Ukraine pipeline project as complementary, not competitive, to the Baku-Ceyhan route. Ukraine’s apparent shift of emphasis reflects two recent changes in the Caspian oil picture: first, the Western companies’ growing hesitations about Baku-Ceyhan, and, second, the tentative revision downward of the earlier estimates of Azerbaijani oil reserves. That revision in turn undermines the thesis that there is “enough Caspian oil [both] to go around” and to enable multiple pipelines to co-exist on commercially profitable terms.

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