DATE=2/15/2000
TYPE=BACKGROUND REPORT
TITLE=ALIYEV AND CASPIAN OIL
NUMBER=5-45465
BYLINE=ED WARNER
DATELINE=WASHINGTON
CONTENT=
VOICED AT:
INTRO: In a major Washington address (Monday),
Azerbaijan President Heydar Aliyev gave a buoyant,
optimistic appraisal of his country and its energy
prospects. But he made allowance for continuing
problems with Russia and Armenia. V-O-A's Ed Warner
reports his remarks and a response by a Washington
economist.
TEXT: Azerbaijan President Heydar Aliyev showed
unexpected vigor in his hour and a half speech, says
Mark Katzman, an economist who was in the audience at
the Johns Hopkins School of Advanced International
Studies.
The 75-year old President, perhaps reflecting his
Politburo experience, appeared to be enjoying himself
the more he talked:
/// FIRST KATZMAN ACT ///
One of the most important factors of the entire
speech was its duration. I think that [Mr.]
Aliyev was trying to show that following his
(heart) bypass operation, he is still a healthy
and energetic individual and very much in
control of his faculties and of Azerbaijan.
/// END ACT ///
In his speech, President Aliyev stressed the
importance of Azeri oil. His country has now signed
19 contracts with 30 major oil companies representing
15 different countries. That adds up to close to a 60-
billion dollar investment in Azerbaijan oil. And this
is just a beginning, said President Aliyev.
He added he is often accused of exaggerating:
/// FIRST ALIYEV ACT WITH TRANSLATION ///
It is true that since we started this work,
press reports from many countries, including the
United States, claim we have exaggerated our oil
and gas potential. They are wrong. Our critics
either do not know the real situation or are
deliberately misstating. Some may be our
enemies. But we do not need to exaggerate. We
have what we have.
/// END ACT //
In fact, many oil analysts say Caspian Sea oil does
not approach the amount in the Persian Gulf, as was
once expected. It is about the equivalent of North Sea
reserves.
President Aliyev noted Azeri oil has a geopolitical
significance. Where it flows is crucial. So he favors
the proposed pipeline that will run from the Caspian
to Ceyhan on the Turkish Mediterranean coast. This
would bypass both Russia and Iran, as the United
States wishes:
/// SECOND ALIYEV ACT WITH TRANSLATION ///
The main challenge is to construct a Ceyhan
export pipeline. We have been engaged in
negotiations for the last five years, though a
lot of forces would like to stop the pipeline. I
would like to emphasize that U-S President Bill
Clinton has always been supportive of this
project. Without this support, we could not have
begun.
/// END ACT ///
"This is not just another pipeline," says U-S Energy
Secretary Bill Richardson. In his words --"It is a
strategic framework that advances America's national
security interests and a strategic vision for the
future of the Caspian region."
Others remain skeptical. Mr. Katzman, who works for
PlanEcon, an economic research and consulting firm,
doubts there is enough oil to justify the high cost of
the pipeline.
/// SECOND KATZMAN ACT ///
The Ceyhan line is certainly a darling not only
of [Mr.] Aliyev but the U-S Government, which
wants to see pipelines moving away from Iran and
Russian options. It still remains uncertain
whether there is sufficient oil in the time
frame that most people see for completing the
pipeline. It seems that Azerbaijan production
would not be sufficient to allow that pipeline
to be viable economically.
/// END ACT ///
Mr. Katzman says supporters of the Ceyhan pipeline
think additional oil coming from Kazakhstan will make
the project viable. We shall see, says Mr. Katzman.
There is also the Russian strategic interest in the
Caucasus, which can hardly be dismissed. President
Putin has emphasized the importance of the pipeline
through Chechnya and wants to maintain control of it.
That is one of the reasons for the current war there.
Moscow is accused of fomenting a rebellion against
President Aliyev in the past and could do so again in
the future. With military bases in Armenia and
Georgia, it remains a threatening presence.
Azerbaijan is the prize in a great oil struggle, say
observers, who will not predict the outcome in the
ever-turbulent Caucasus. (Signed)
NEB/ew/gm
15-Feb-2000 17:39 PM EDT (15-Feb-2000 2239 UTC)
NNNN
Source: Voice of America
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