Azerbaijan State Economic University,

Elshan M. Hajizadeh

In a new geopolitic situationAzerbaijanagain has turned to a place of collision of economic interests of great powers. The rich natural resources, favorable base conditions for successful development and, on the other hand, an arrangement near to the perspective markets of the world economy, and also a presence on a transit axis Europe-Russia the Near East Southeast Asia causes his geoeconomic appeal. The given conditions allowAzerbaijanbe even more a conducting part of macroregion, and to capitalBakuto become a metropolis this space. Undoubtedly, rather adequate conditions are in others Southern republics Kavkazkih. But the difference in that that in this cut to the greater measure plays a role its oil riches and oil is the best seller ofAzerbaijan. Presence of the rich natural resources, more favourable geographical position and adequate economic potential predetermine a significant place of republic in hierarchy of strategic interests of the conducting countries of the world in Transcaucasian and прикаспийском region [3,8,9].

Developed traditions oil gas of extraction, a classical branch infrastructure in aggregate with opening large hydrocarbonic deposits in water area ofCaspian seagave a new pulse to development to national economy and the oil industry of the country. As a result of progressive tendencies the well-known contract including in an oil history under the name «Contract of the age» on September, 20, 1994 has been signed. The beginning of development of perspective hydrocarbonic resources ofCaspian seahas put in pawn a basis of a new era in revival of national economy and has led to to development of oil strategy of republic.

The investments enclosed in oil branch, being accompanied by effect of the animator have captured also others sector of economy. «Contract of the age» became a strong push for the conclusion of a lot of the subsequent contracts. The number of similar contracts by present time has reached 22. 14 states and 32 authoritative oil companies participate in these contracts. Within the nearest 20-25 years in a national economy the investment of large investments for the sum of 50-60 billion US dollars from which at present more than 15% it is already realized is planned [1,2,6].

But not all plans stipulated in contracts have crowned success. Because of the factor of unprofitableness revealed during prospecting drilling actually the activity was stopped with 6 Caspian consortia. In republic this situation did not count a trouble. The most important in a wide spectrum «parade» of the conducting world transnational oil companies with participation of the parent states has taken place. Left the contract area have left in republican oil sector 500 one million dollars beforehand the dollars of investments stipulated from 12 billion. Having fixed it his infrastructural formation and a geologist -economic information database the block of structures, which potential of stocks makes 480 million tons of oil [15,16].

Despite of the conceptual deviations, spent national oil strategy now is carried out in wider range. Today confidently it is possible to tell, that in republic the structures providing high volumes of extraction and its economic life are generated has entered a new active stage of development. The richest hydrocarbonic resources became a basis of creation of the State Oil Fund of Azerbaijan in which it is already accumulated about billions US dollars that will allow to develop oil sector of economy, to promote increase of growth of a standard of living of citizens. Turn to realities and a lot of alternativeness of an output on the world markets of oil and gas. Today's successes give the basis to believe, that the nearest years the republic actually will turn in the major economic zone through which power resources of Caspian sea will be transportation the markets of Europe in summary real revival of the Great Silk wayAzerbaijanbegins transit re-export by space for all region.

At all notability of the listed facts at all it is impossible to believe completely about the found decisions of the problems connected to oil of the country. To republic, rich hydrocarbonic resources in structure of economic automatically allocate a place of the country - exporter of crude oil and, not in a smaller measure, mineral oil. And in the long term, in case of favorable development of the script, as well the exporter of natural gas. At present a priority direction of its economic policy and oil strategy is «The big transportation» oil of republic on the world markets. But construction of a new oil transport corridor for swapping the big oil is not limited to one interest of theAzerbaijanparty. Dynamically growing potential of hydrocarbonic stocks ofCaspian seadictates new communication decisions on transportation of oil the world market. Realization of these intentions undoubtedly will need construction of a lot of export pipelines.

The Caspian pool and power potential of Azerbaijan

Opening of large-scale hydrocarbonic riches on Caspian sea before disorder ofSoviet Unionand in the following epoch-making period the beginning of operation of these deposits has strictly changed balance of energy and a power raw-material base of a planet. Despite of a difference in an estimation of an energy potential ofCaspian seathe majority of opinions are joined. Geological and geophysical calculations show, that here cumulative the forecast stocks make tone about 25-30 billion. By estimation of department of power theUSA, stocks of oil of region are estimated in 200 billion barrels [16]. Basically optimistic the forecast stocks of all hydrocarbonic resource ofCaspian seain an equivalent of oil change from 7-8 up to 13-22 billion and some sources even up to 50 billion tons. But these factors do not transform region into theNear East. The majority of experts in the field of oil extracting agree that oil stocks ofCaspian seamake not less than 10 percent from Near-Eastern. Together regions of Persian gulf andCaspian seahave approximately 800 billion barrels of oil. For comparison, oil stocks Northern and South America andEuropemake less than 160 billion barrels. According to long-term power forecasts, by 2050 Persian gulf andCaspian seawill allow more than 80 percent of global oil recovery and natural gas. Separately the Caspian region during 50 years becomes the largest supplier of hydrocarbonic resources toEurope. Since 2005 year here daily extraction will reach 5 billion barrels. In 2015 oil extracting in region will make 250-300 million tons. These forecasts if will be recognized true, in the near future the Caspian oil can make the one fifth world reserves and the Caspian region becomes the largest supplier of oil not only to Europe, but also all over the world [4,11,14].

Predicted hydrocarbonic stocks on Caspian sea in a conditional fuel equivalent are distributed between the regional states in a cut: to Kazakhstan - 13-14 billion tone, to Azerbaijan - 7-8 billion tone, to Turkmenistan - 5 billion tone, Russia - 1 billion tone, and to Iran - 2 billion tone.

The Azerbaijansector exhausting in 78,8 thousand км² which makes 20,8% of all water area is most investigated by the area. Almost half of initial potential resources of republic is concentrated in a shelf zone of the Azerbaijan sector of Caspian sea. Here domestic experts reveal 145 perspective structures. Natural resources of oil and gas in the Azerbaijan sector of Caspian sea proceeds will be specified by local sources and the foreign companies. It is supposed, that oil resources in this sector make volume twice more told. This optimism undoubtedly changes representation about oil of Azerbaijan. Geologists of republic specify, that there is more than half of oil,³/₄ gas resources still remain not open and the degree investigation of a shelf by geologist - geophysical methods is made only, with only 34 percent.

In the Azerbaijansector of Caspian seaalongside with oil resources the big extraction of natural gas which stocks make, approximately, 5 billion cubic metre is expected also. Not so long ago at southeast coast of Caspian sea not far from city Baku was the structure under name «Shah Deniz», having world value is open unique a gascondensate. Deposits of gas of this block - structure are estimated in 1 billion in m³ and a condensate in 150 million tons. Opening «Shah Deniz», has changed a power situation in a regional and global orbit. We shall note, that on a common opinion of the western experts after1978 in the world space it was not open deposits of natural gas of similar scale [5,10].

Quantity of power resources ofAzerbaijanon land and on the sea are various. By calculations scientific there is more than half ofterritoryofAzerbaijancontains oil. By experts it is calculated, that now in territory of republic stocks of hydrocarbons on land make approximately 300-500 million tons, and predicted about 1 billion tons.Azerbaijanon a parameter of extraction per capita adjoins to such big exporters of oil asNigeria,AlgeriaandMalaysia. She also enters in first ten conducting countries of the world on a level the forecast of stocks per capita [6,9].

The oil recovery in Azerbaijanhas a centuries-old history. Here already more than 2,5 thousand years extract oil. Proceeding from this the name of the state personifies power toponymics and Azerbaijanis interpreted as «Edge of fires». Azerbaijanalso is considered one of two birthplaces of an oil civilization and hydrocarbonic an era. The Bakuoil the industrial character has got at the beginning XIX centuries. From the beginning of an industrial oil recovery and gas from bowels of Azerbaijanit has been taken 1,847 billion tons of hydrocarbonic raw material which 1.388 billion tons oil and gascondensate. 452 million tons of oil and 330 billion in m³ natural gas it has been extracted in the high sea, and 936 million tone of oil and 130 billion in m³ natural gas on land. At present time in republic is extracted every year 15-16 million tone of oil, from them 6-7 million tone falls on share АIOC /The Azerbaijan International Operational Company/, based during the conclusion «Contract of the age». On the old areas which are at full disposal SOCAR /the state Oil Company of the Azerbaijan Republic/ a mid-annual oil recovery makes 8-9 million tons, and natural gas 5-5,2 billion cubic metre. In distribution of extraction to the old areas, the sea borrows volumes 7-7,5 million tons, sheer 1,4-1,6 tons of oil. Gas is distributed accordingly, 4,2-4,3 and 0,2-0,3 billion cubic metre. By «Contract of the age» it is stipulated, that АIOC gives republic natural gas gratuitously. Last three years volumes of this gas have made 0,7-0,9 million cubic meters [7,12].

The quantity of made oil in Azerbaijanin 1894 was made even to extraction in the USAand, in 1899-1901 having outstripped has won first place in the world. In 1901 from 20 million tons of extracted oil on a planet more than half were made with the Azerbaijanoil received on Absheron. With the beginning of the second world war, in one 1941-year manufacture of oil in Azerbaijan has raised up to a record level and has made 23541 thousand tons. Within war Azerbaijanhas provided the country 75 million tons with oil. It made 73,4% of the oil made in the USSR. The highest manufacture of gas is marked in 1981 - 15 billion in m³. The peak of extraction in republic is expected in 2009-2012: oil - 55 million tons, natural gas 20 billion in m³ [16].

Scripts of transportation: the factorial analysis

The idea of transportation of the big Azerbaijanoil and all Caspian region on the world market for the first time has been sounded in some months after disintegration of the USSR. Then in Baku for the first time there came the western companies - Amoco, BP and Unocal to develop sea deposits «Azeri», «Chirag» and «Guneshli» /АCG/ from which it is possible to take up to 560-640 million tons of oil.Azerbaijan has been at that time practically isolated from the external oil markets. However causal did not serve only created by the Soviet system integration the mechanism of economic relations. On a number with it absence of the sufficient corresponding ramified communication network was also. A way out became a question on creation new mobile a transport infrastructure. Maintenance of reliability and alternativeness of transportation it was defined by a choice of a vector of routes in a context of early and big oil.

Scale works above the concept of export pipelines have begun after two years after the conclusion of «Contract of the age». 11 variants have been considered. Among considered variants were hypothetical: a route throughArmeniaand the Iranian Islamic Republic. On the lead researches commercially viable three routes are determined:

1. To Black sea throughGeorgia;
2. To Black sea throughRussia;
3. To Mediterranean sea throughGeorgiaandTurkey.

For transportation of the working oil potential and early oil the rate on reconstruction of pipeline Tihoretsk-Groznyj-Baku which pumped over oil from theBakufactories for the further processing earlier has been made. Having made a reverser, having changed a direction and stretching it up toBlack seathe new petro-route has got the name Baku-Novorossisk which on October, 27, 1997 has been entered into operation. The developed astable political situation onNorthern Caucasusplaced under a threat safety of work of a highway. The decision on construction of one more oil pipeline on earlier working route to the Baku-Batumi therefore was accepted. In a consequence interritoryofGeorgiathe oil pipeline to the Baku-Batumi was reconstruction and is changed around Аdjari in a direction of Georgian port Supsa. The new route is handed over in operation in April, 17, 1999 and began to refer to to the Baku-Supsa. During too time, because of analogy a route Baku-Novorossisk also has been corrected interritoryofRussia, bypassing theChechenRepublic.

The conclusion of new oil contracts and results of the lead further prospecting works on the contract areas have led to to increase in scales before the stipulated extraction. The increase in stocks only on АCG has made about 100 million tons and its resource potential growth up to 740 million tons. On result of growing dynamics of hydrocarbonic stocks obvious became, that throughputs reconstruction of theBakuexport pipelines is not enough even for maintenance of needs of consortium АIOC by which in 2012-2024 than 50 million tons of oil one year will be extracted not less. Therefore the question of construction of a new large oil pipeline providing an output of theAzerbaijanoil on the world markets has got irreversible character [1,13].

The primary estimation of a choice of a direction of routes for construction of the basic export pipeline /BEP/ has been lead on the basis of lines of factors: communication stability, ecological safety, economic efficiency, commercial advantage, quality of oil, a technical opportunity, presence of corresponding capacities on processing, affinity to export terminals, an opportunity of service of tankers of the greater capacity. A prominent aspect here became a question of detour of turkish passages.

Studying of prospects forecast extractions in the Caspian pool has allowed to estimate potential volumes BEP which were based on three large sources of crude oil:

• Ø extraction under «Contract of the age» /40-50 million tons one year/;
• Ø the expected extraction stipulated by contracts, signed by Azerbaijanwith the foreign companies./15-20 million tons one year/;
• Ø the extracted oil in others Caspian the countries with possible deliveries to the world markets transit through territory of Azerbaijan./20-25 million tons one year/;

Marketing researches showed, that standard item of the Caspian oil for coast of Black sea and need adjoining to it of the countries by 2010 will increase, on the average twice and begin about 48,5 million tons one year at daily consumption in Turkey 35, Ukraine 28, Romania 42, Bulgaria of 21 thousand tons. In aggregate oil Caspian the states which it will be necessary to take out through turkish a passages will reach in 2010 170-190 million tons. This volume in 3-4 times is more nowadays than norm. Becomes clear, that approximately 125 million tons one year will be necessary for taking out from Black sea on other routes around of passages.

As is known the unique closed pool with huge potential stocks of hydrocarbonsCaspian seahas no direct output on the world markets. Three oil pipelines existing on today in a direction of Europe leave in half-closed midland Black sea having communication with World ocean by means of turkish passages. Severe climatic conditions of Black sea, which basic ports because of gales more than hundred days in one year are in a non-working condition and, the main thing, limitation of an opportunity of the given passages negatively influence efficiency of transportation of the Caspian oil on the world markets. Through a passage Bosporus dividing 15-millionIstanbulon two parts now there passes in one year 50 thousand cargo courts. 5,2-5,5 thousand makes of them the tanker which transport about every year, approximately, 50-70 million tons of oil and mineral oil.

Carrying capacity of the tankers which are taking place through a passage makes from 50 up to 100 and is rare up to 150 thousand tons. On the statistical data last decade in Bosporushas taken place more than 200 appreciable failures. Turkish officials assert, that Bosporus and Dardanelleshardly maintain already existing annual loading and will not pull additional volumes of the Caspian oil. Proceeding from this adverse situations Turkeyat support of the International Sea Organization has toughened requirements under the safety precautions of pass of courts through Bosporus. This motivation together with other important strategic and economy-ecological reasons caused a choice of new reference points for safe delivery of the big Caspian oil on the world markets through Georgiaaround of Black sea. Concrete object of construction of the terminal became turkish deep-water port Ceyhan on Mediterranean sea. In result SOCAR and АIOC have prepared joint commercial-technical agreements on construction of an oil pipeline to the Baku-Tbilisi-Ceyhan /BTC/ which on October, 17, 2000 are signed in Baku, on October,18 in Tbilisi, on October,19 in Ankara. Thus BTC has taken the central place in power projects «East-West» and became the basic main oil pipeline for the countries of the Great Silk way and it is recognized as the strategic project for all Caspian region as the major factor of maintenance of power independence of all of his states [4,17].

Preparation and initial stage of realization BTC have passed under the direction of the late ex-president of Azerbaijan Hejdar Aliev. Thanking his personal will this project has sustained intervention of all opponents and has received the mandate on to carry out. It is logical, that in opinion of all participants of the project the pipeline to the Baku-Tbilisi-Ceyhan is named in his honour.

Technical and economic parameters of oil pipeline BTC

At the analysis of economic advantage of any project the important place is allocated to its technics-technological potential. In the big cut this aspect expresses an investment orientation and economic to the importance of the project. Therefore proving economic efficiency of the project technical and economic parameters of pipeline BTC are lower interpretation the main thing

.The oil pipeline in the extent of 1768 kms will allow to deliver the Baku-Tbilisi-Ceyhan 50-60 million tons of the Caspian oil one year up to Mediterranean seaport Ceyhan. On a share ofAzerbaijan it is necessary 443 kms. The pipeline, 249 kms.Georgia and 1076 kms.Turkey. Passing above sea level it will cross the most maximum point of2830 meters more than 1500 rivers and 1 million barrels of oil will allow in economic every day.

Start in 2003 is given to construction of the pipeline and it will proceed only 30 months. In 2006 the first tanker with the shippedAzerbaijanoil in marker status «Azerlayt» will leave port Ceyhan.

Participants of consortium BTC are: the operator - BP of /32,6 %/, the State oil company of Azerbaijan of /25%/, Statoil /8,71%/, Unocal /8,9%/, TPAO /6,53%/, Total-Fina-Elf /5%/, Agip /5,0%/, Itochu /3,4%/, Inpex /2,5%/ and Amerada Hess /2,36%/ [16].

On all line of the pipeline it will be constructed 8 pump and 98 the gate stations. His filling will need 1,5 million tons of oil. The pipeline will be provided corrosion by protection.

Diameter of an oil pipeline changes in the following limits: in territory of Azerbaijan -42 inch, Georgia -46 inches, in Turkey diameter of a pipe will make 42-34 inches. Thickness of a wall of pipes, depending on seismic activity of sites will vary from8,74 mm. Up to23,8 mm. Speed of an oil stream in pipes at full throughput of an oil pipeline will make2 ma second that will provide prorolling oil from Sangachal /Baku/ up to Ceyhan terminals within 10 day. Ceyhan the terminal will be simultaneously capable to load two tankers displacement on 300 thousand tons everyone. Speed of loading of tankers - 60 thousand barrels of oil at one o'clock. For loading tankers by oil in 2,5 kms. From coast in the sea will be constructed bulk platform and a pier. In itself Ceyhan the terminal construction of seven tanks is stipulated. Each tank is designed for storage of 150,8 thousand in m3 of oil. In comparison by all it technics-technological in parameter the given project on the capacity, vanguard and new to infrastructural accessories in many respects outstrips similar working Caspian pipelines.

Initial design cost BTC is designed on 2,95 billion US dollars. From them 600 million dollars is allocated toAzerbaijan, 565 million dollars ofGeorgiaand 1 billion 400 million dollars ofTurkey. Every day 4 million US dollars is on the average spent for realization of the project. Now in construction BTC in three countries - participants of the project are involved 12 thousand person.

The international bank syndicate has made the decision on allocation more than 1 billion dollars on construction BTC by members which 15 banks are, including Mizuho /Japan/, Societe General /France/, ABN Amro /Holland/, Citicorp the /USA/, West LB /Scotland/ and others. For this purpose with representatives of the governments ofAzerbaijan,Georgia,Turkey and group of creditors inBaku on February, 03 2004-year the agreement covering 208 financial documents with 17 thousand of signatures of 78 various parties has been signed. The documents regulating the attitudes between creditors and three transit countries are considered as the important step on financing connected with the pipeline which construction will cost as a whole of 3,6 billion US dollars. /design cost 2,95 $ billions + 0,65 $ billions on dutys./ About one third of expenses shareholders finance filling of the pipeline and percent due to the means, and other part is provided in the form of financing from the third party.

The beginning of operation of pipeline BTC will change segmentations of the market of oil in the countries ofEurope. Annual deliveries 50 million tons of the Azerbaijan oil together with project Caspian Pipeline the Consortium /CPC/ and possible growth of volumes of the Russian Caspian export will give additional «emission» of oil of the order 100 million tons one year. It more than 2,5 % of world consumption of oil and about 13 % from the general consumption by the West-European countries [16].

As it is marked, experts consider, that only the project «Contract of the age» allows to fill in pipeline BTC. To this it is possible to add potential and other oil contracts signed in Azerbaijan. On the other hand, by full development of oil giant Kashaganskogo of a deposit extraction of Kazakhstanwill cardinally increase. Such situation actually will lead to to inevitability of transportation of the Kazakhstanoil on route BTC. Foreign oil companies Eni already participate in construction BTC with 15%-s' share capital, TotalFinaElf, ConocoPhilips and Inpex, deposits «Kashkhan» working in development. At the first stageKazakhstan is going to pump over on pipe BTC up to 7,5 million tons of the oil, in the subsequent up to 20 million tons of oil one year. It is necessary to note still, that in theAzerbaijan sector ofCaspian sea alongside with large oil resources the big extraction of natural gas, the forecast which stocks is expected also makes approximately, 4-5 billion cubic metre. Opening gascondensate deposits «Shah Deniz», has changed value of the Caspian region as the future source of energy carriers arisen basically for an oil recovery. It means, thatAzerbaijan in the nearest time in the concrete image will turn and in the gas exporter. Gas the pipeline to the Baku-Tbilisi-Erzurm /BTE - the South Caucasus Gas Pipeline/ which originates from «Shah Deniz», in a direction to the European market throughTurkey has left a design framework and has turned to a commercial reality. This pipeline in the extent of 690 kms. Up to border ofTurkey, in the basic part will be under construction паралельно with route BTC. Such the validity will lower risk and will affect economic cost of both pipelines. Produplication BTC by gas main BТE will lead in region to to creation of a double power corridor. All these circumstances, in aggregate will reduce a degree of risk of route BTC and will increase its strategic appeal [5].

The Caspian oil pipelines: the comparative analysis of efficiency

Now the Caspian oil acts on the world markets on five routes:

q  Baku- Novorossisk;

q  Baku- Supsa;

q   Tengiz-Novorossisk;

q   Atirau-Samara;

q   Neka-Teheran.

General throughput of pipelines in an annual cut makes 57,7 million tons, and perspective 134,5 million tons. When by 2015 oil extracting in the Caspian pool will reach up to 250-300 million tons one the year, the given set of a pipeline network cannot provide to the full a limiting export potential and shipping system will be necessary to expand.

Below in the table are resulted technics-technological parameters of these pipelines:

Table 1

Technics-technological parameters the caspian pipelines

Now SOCAR pumps over oil on the markets of Europe throughCaspian-BlackSeatransport a corridor on two directions:

q Northern route - Baku-Novorossisk /extent of the pipeline in territory of Azerbaijan 224-км./;

q The western route - to the Baku-Supsa /extent of the pipeline in territory of Azerbaijan 480-км./;

Looks ofAzerbaijanon above mentioned other routes while are relative limited. But in the long term development of integration east and southern direction is possible. Here dominating interest it is possible to allocate Neka-Teheran to a route.

Product a wire Neka-Teheran is formed in the middle of the eightieth years of the last century. Now it is used for swapping the Caspian oil on the Teheran oil refining factory. In the same purposes in 1996 oil port Neka has been constructed also. After reconstruction the route will be used both for oil, and for mineral oil. It is a unique Caspian oil pipeline which belongs only to one state - to the Iranian Islamic Republic.

The route Neka-Teheran is comprehensible for delivery of theAzerbaijanoil in blockade Nakhchivan, and also prospect for an output to the Near East markets. Use of a route for barter transactions, processing theAzerbaijanoil in oil factory Teheran and Tebriz is possible.

The oil pipeline Atirau-Samara can be named especially русско-kazakh. It is a unique output of Kazakhstanon Russian system «Transneft». It is constructed 30 years ago, as a part of the ramified network of republican oil pipelines of «The Western branch» Atirau-Samara which has been intended for transportation of heavier grades of crude oil close deposits. As a result of use of anti-turbulent additives its throughput is raised up to 15 million tons one year.

Entered in operation on March, 26, 2003 oil pipeline CPC is constructed for transportation of oil the unique deposit Тенгиз which is taking place on east coast of Caspian sea in theKazakhstanRepublicand connects it toBlack seain Novorossisk to port. Controllable by joint-stock alliance CPC grows and it is considered the basic oil pipeline for an output of the Kazakh oil on the European markets. Use CPC for transportation of the bigAzerbaijanoil is considered not economic. To the first item noticed limited efficiency the factor absence direct pipeline connections with port terminals is allocated. This the reality concerns and to a route Neka-Teheran.

Absence reliable tanker fleet on Caspian sea to compel intention in full to a measure to use these pipelines also imperfect for theAzerbaijanoil. As for transportationCaspian seaa serious problem is lack of transportation means. Are now used the tanker by deadweight from 3 up to 5 thousand tons which can approach to available ports of all Caspian the states, and also to pass up to the Black and Baltic seas on Volga-Don and Volga-Baltic channels. However these of the tanker do not approach for realization of large-scale commercial operations. Except for that sea transportations are complicated especially during the autumn - winter period when gales on the sea accompanying in heights of waves up to6 metersare frequent. The problem of depths of the Caspian ports too is considered important and some from them requires the further deepening. Therefore superfluous the Kazakh oil it is planned to transport throughAzerbaijanfrom port Aktau inBakuwith the help construction the pipeline in a bottom of the sea Caspian. In the long term and the Russian companies also can export the oil on the West on this route

Below in to the table advantages and lacks of the Caspian pipelines of a context swappings theAzerbaijanoil are resulted:

Table 2

advantages and lacks of the caspian pipelines

It is predicted that BTC further becomes the strong contender and deliveries of the Russian oil fromBlack sea. In this competition communication usefulness, instead of standard item will play the important role. On economic reasons it is much easier to importers to buy oil in Mediterranean Ceyhan, rather than in Novorossisk. For easing this competition construction of a connecting oil pipeline from Novorossisk in Georgian port Supsa with the further connection to pipeline BTC is offered. On a new branch the idea to transport the Siberian oil acting to Novorossisk on pipeline CPC, and also the oil delivered to Novorossisk by rail from Makhachkala is put forward, and then to direct her on BTC around of Bosporus and Dardanelles. In opinion of authors of this idea the opportunity to avoid many problems connected to delays in passages because of toughening on the part ofTurkeyof security measures turns out. And the Russian party counts realization of this idea impossible. As to lead a pipe on theBlack Searesort coast will cause others economic and environmental problems which can damage tourism in region. On the other hand, a problem of passages inRussiacounts far-fetched and connects her with necessity of searches of oil for BTC [15,16,17].

Delivery of the Caspian oil to the European markets does not come to an end one problems ofBlack seaas other potential consumers are located as well inside continent. Therefore oil-producing countries of the Caspian region in are interested to deliver her on central market. It is supposed different variants, basically, on the part ofBulgaria,RomaniaandUkraine.

Under project Trance of the Balkans of an oil pipeline it is offered to transport oil tankers from Novorossisk in the Bulgarian port Burgas and then on an oil pipeline in length from 320 up to 400 kms. Up to Greek port Aleksandropulis onAegean sea. Realization of the project assumes active participation of all interested oil-extracting companies and does the pipeline economic only in the event that on it there will be both Russian, and a Caspian oil.

Romania sees the partial decision of a problem of passages within the framework of the general transport programs Caucasian corridor TRASECA and agreement INOGATE, suggesting to lay the pipeline from port Constanta through Romania, Serbia, Slovenia and Croatia to the Italian port Trieste taking place in Adriatic sea. By this variant the Caspian oil will act on oil a factory the transit countries; its way also can be continued to other European consumers - by the sea fromTriesteor fromConstantaacrossDanubeand Rhein.

In to beat problems of turkish passages and transit of the Caspian oil Ukraine is more real and is active, having started construction of the pipeline in length of674 kilometersOdessa-fords which will provide prorolling million tons of the Caspian oil from ports Supsa and Novorossisk on oil a factory Poland, Hungary and Slovakia. It is expected, that capacity of an oil pipeline will be expanded to 40-45 million tons one year. The second stage assumes connection with northern thread of an oil pipeline «Friendship», increase in capacity up to 40 million tons of oil year, its transportation the Polish portGdanskand German Rostock and further on the markets ofGermany,France, theGreat Britain, other countries ofNorthwest Europe.

There is one more joint project of Ukraine, Russia, Belarus, Hungary, Croatia and Slovenia on reconstruction and use of free capacities of pipeline systems «Friendship» and «Adria» for export of oil from the countries CIS through Croatian tanker port Omishal in volume up to 25-30 million tons. The Russian companies are interested in opportunities of this route first of all. Participation and theKazakhstanparty in this project is not excluded [15].

Thus, set of the listed variants guarantees an output of the big Caspian oil from water area of Black sea, passing Bosporus andDardanelles. Here again the basic loading takes oil pipeline BTC.

Strategic aspects and geopolitic priorities

Oil and policy in a modern society very much interconnected concepts. To deny such factor it would be naive. And in pipeline diplomacy this validity is not excluded. For 10 years of existence of project BTC his success many times because of balance of political-economical balance was put under doubt.

BTC it is actually considered most expensive of all projects of transportation of the Caspian oil. It is necessary to agree with a reality as at a choice of routes of transportation the world marketsAzerbaijanhad the limited influence as the majority of deposits of oil in its territories today own TNC the western countries. Therefore a priority of high profitability not only his problem.

Having agreed with development oil the script of the world the factor of optimum profitability of the project can be allocated on a background. In this aspiration is also other political and strategic aspects. From this point of view lobbying of construction of pipeline BTC from the party theUSA, undoubtedly pursues the geopolitic purposes. There is an opinion, that BTC was not lost only due to political support from the party theUSA, wishing to reduce the dependence on the Arabian oil. To increase sources of energy carriers, reduction of dependence on Near-Eastern oil, involving of the countries of the Caspian region in an orbit of the West and economic, makes a spectrum of the similar purposes ofAmerica. Therefore and some experts under project BTC count even her not European, and in big to a measure only American. Such assumption also is proved by that in Ceyhan supertankers with deadweight in 300-500 thousand tons with which it is favourable to transport oil only in theUSAwill be exclusively filled, and it is enough for Europe and deliveries fromBlack seatankers size up to 150 thousand tons [15,17].

In construction BTC dissatisfiedRussiashows. Earlier taking place under its full control oil for him at present even on transit levers becomes inaccessible.Russiaalso to prevent to construction of an oil pipeline near Caspian sea on which it was assumed to transport the Kazakh oil inBakuand through BTC on the European markets. To realization of such project prevents not the law the status ofCaspian sea. But despite lacking similar communications the Kazakh oil acts toAzerbaijanwith the help of tankers.

In new regional geopolitics of Washington the purpose to adhere to itself left of under the Russian trusteeship Azerbaijan and Georgia, strengthening the ally with Turkey, having second-largest army among the countries of the NATO, together with, not in smaller to a measure, isolation of Iran is undoubtedly pursued. On the western coast ofAtlanticcount this regional association as a counterbalance of an axis Russia-Armenia-Iran.

Carrying out of route BEP onterritoryofGeorgiaputs this small state in an epicentre of the given strategic project. Meanwhile to the country, about two thirds of territory which are not supervised by the central authority the wave of disintegration threatens. She and in the strategic plan being on coast ofBlack seain regional space looks a weak part. Therefore proceeding in these geopolitic realities sharply there is also a question of NATO presence onCaucasus. The alliance extends and in it the basic accent is given to Caucasus and theCentral Asia.

The geostrategic consensus has a third - an ecological side. The rights the defender and ecologists in the beginning of construction have launched a protest campaign against realization of oil pipeline BTC. Ecologists from organizations «Friends to the Earth» assert, about causing irreparable damage of oil pipeline BTC to an environment and the population of areas through which it will pass [17].

To not take into account today economic forces, means to block itself from the world economic communications.Azerbaijanat present time does not possess sufficient forces independently to leave on the world market. But, however project BTC becomes a reality and a leitmotif of ours researches the analysis of geopolitic and economic overweight of it powerful the project which in actual realization actually will change an oil situation of region and all world market is.

Dominants economic efficiency

Attributes of structure of business and proceeding from this reality they should add risk and profitability each other forming uniform system. Leaving in the party questions of an estimation of risk we shall lead the analysis of two major parameters of economic efficiency: tariffs of prorolling and capital investments of the given project.

BTC in a counterbalance c other Caspian oil pipelines, gets huge strategic value. Calculations show high efficiency of oil pipeline BTC which even at reduction of price of crude oil in the world market up to 12 US dollars for barrel will still remain commercial favourable and economic profitable.

Below in the table technical and economic parameters of the Caspian oil pipelines directed asideEuropeare resulted.

Diagram

Tariffs for prorolling of oil on pipelines

\s

Apparently from the diagram in this configuration the lowest prices at a route to the Baku-Supsa. In comparison with other routes this difference far uneconomical which makes in each one million tons size of the order 13-15 million dollars. In the certain measure such phenomenon can be counted logical, as the smallest economic cost at the Baku-Supsa and she not enough the carrying pipeline in this direction. At increase in scale of business and speed of commodity circulation it will concede on свей profitability to routes Baku-Novorossisk, CPC and in future BTC/

The economic substantiation of the given projects causes at the minimal capital investments maintenance of the maximal throughput of system of export pipelines and comprehensible for the companies working in region the tariff for transportation of the extracted oil. At these realities costs of oil should not exceed existing, and also a predicted level of the world prices. We shall note, that at a high level of the tariff there are no guarantees of filling of a pipe, at low - profitability of the project sharply worsens. In turn, reduction of prices on oil in the world market will lead to to sharp lengthening of times of recovery of outlay of all projects, down to unacceptable on economic reasons.

Realization of project BTC will obviously lead to to formation in region of significant surplus of free transport capacities. Calculations show, that both on volume of required investments, and on prospective size of tariff BTC it appears far behind of competitors. As to necessary investments for construction and modernization of all pipelines the following picture here is observed. As a whole across Caspian sea they will make on the average, $6,5 billion, including on: construction of pipeline BTC - $2,95 billion, CPC - $2,8 billion; modernization of a line to the Baku-Supsa - $0,6 billion; a roundabout branch of pipelines Baku-Novorossisk around of the Chechen Republic - $0,15 billion [16].

Below calculations of a recoupment and profitability of route BTC are resulted at optimum costs of operation of the pipeline.

Table 3

Calculations on profitability of the oil pipeline to the Baku-Ceyhan

(At the tariff 16,5 $ and average annual sending 50 million tone in one year.)

Apparently from table №3 at favorable development of the script in the world oil market and adhering to strict tariff strategy project BTC even on the highest threshold of profitability is less than her than in 5 years will pay back itself and will leave on a profitable basis. For realization of the project in such scale this cut of time is optimum. If to consider, that only under the project «Contract of the age» the nearest 20-25 years it will be put on the world market 500-600 million tone of oil, and also half of this oil is realized on the given pipeline then it becomes clear as far as the route to the Baku-Ceyhan economic is effective.

Conclusions

Our modern world is arranged so, that any macroregional the project alone cannot has success without the patronage of the global political centers. The lead researches are shown also not with an opportunity of denying limited it is politized oil pipeline BTC. But the having data and visual political underlying reason not dominating reference point in project BTC. It is supported with economic substantiations which are reflected in below-mentioned concrete factors, is a result made the certain analysis of profitability:

• Ø sufficient resources on the oil areas developed by consortium AIOC;
• Ø transportation of the oil raw material received by other contracts in theAzerbaijansector ofCaspian sea;
• Ø transportationkazakhstanoil on the given route;
• Ø reliability of a local oil infrastructure;
• Ø favorable tariff strategy of the prices of crude oil swapping on the pipeline;
• Ø a recoupment of the project at full capacity during five years;
• Ø needs of the world market;
• Ø creation of a double power corridor parallel construction of gas main BTE;

In each project the place of a situation of force-majeur is allocated. Project BTC too is not guaranteed against cataclysms and similar negative circumstances. Here actually there is a risk of economic character and to exclude it it is impossible. In project BTC in a reality from the point of view of economic efficiency the place to the certain geopolitic painting is allocated also. In synthesis of these two factors: Eco+Geo are under construction knowledge and hopes of its realization and optimum efficiency.

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