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Georgia: Fighting Raises Concerns Over Pipelines

Fighting in Georgia has led to calls for greater security measures to protect Caspian pipelines. As fighting continues in the separatist region of Abkhazia, oil industry officials say that security will be needed for the operations that are set to take place next year.

Boston, 12 October 2001 (RFE/RL) -- Fighting in Georgia has raised concerns for developers of Caspian pipelines, but officials said this week that they are pressing ahead in spite of the risks.

Speaking on 10 October in Washington, officials of the British-based BP oil company indicated that the high risks of instability in Georgia have already been taken into account in their plans to build oil and gas pipelines to Turkey from Azerbaijan.

Surprisingly, the BP officials had little to say about the current clashes in Georgia's separatist Abkhazia region, according to analysts who attended the briefing. But the officials, who spoke at the Center for Strategic and International Studies, raised specific concerns on the problem of providing the security that will be required beginning next year for the huge operation.

BP is heading the consortium to build the Baku-Tbilisi-Ceyhan oil pipeline from the Caspian to the Mediterranean, as well as the group that is planning to lay a $1 billion natural-gas line along the same route.

Michael Townshend, general manager of the Baku-Ceyhan project, said that a massive security operation will be needed, just for the delivery of equipment and pipe.

Twenty-two ships are expected to arrive at Georgian ports, with each vessel carrying 2,800 sections of pipe. Townshend said it will take six months to move the pipe into place in Georgia and Azerbaijan. The security situation may be key to development in the Caspian, where the Azerbaijan International Operating Company remains the only venture producing major amounts of offshore oil.

David Woodward, president of BP Azerbaijan, said that if construction does not start in June or July of next year, it could push back plans to expand production at the offshore oil fields. Plans to exploit the giant Shah Deniz gas field in the Caspian could also be affected, Woodward said.

While the current fighting in Abkhazia seemed to be less of a worry for the oil companies than the security situation next year, the two may become linked unless the conflict is brought under control. Russia reportedly moved forces toward its border with Abkhazia this week after trading accusations with Georgia over responsibility for a series of guerilla attacks, bombardments, and the downing of a helicopter carrying UN observers in the Kodori gorge. The crisis began last week during Georgian President Eduard Shevardnadze's trip to the United States, although no connection has so far been shown.

Only days before his trip, Shevardnadze also signed an intergovernmental agreement with Azerbaijan, clearing the way for the gas pipeline after negotiations that lasted over nine months. Years of pipeline planning have already taken place against the backdrop of two conflicts in Chechnya, to the north of the Caucasus energy route, and the uneasy cease-fire in Nagorno-Karabakh to the south. But development plans do not seem to have included the possibility that Abkhazia could re-emerge as a new front in the months before construction begins.

In testimony 10 October before a U.S. congressional panel of the House International Relations Committee, a Georgia expert from the Center for Strategic and International Studies called on the United States to provide additional training to Georgian forces for rapid reaction against terrorist activities.

Zeyno Baran, director of the Georgia Forum at the Washington think tank, said that "given that the oil and gas pipelines are U.S.-backed, especially in light of the recent terrorist attacks against the United States, greater security measures need to be taken to protect these critical infrastructure projects in Georgia and the rest of the Caucasus."