Azerbaijan: Baku-Novorossiisk pipeline taken out of the game

The company operates the Baku-Novorossiisk oil pipeline’s Azerbaijani sector, and therefore has priority rights for using this pipeline in its own interests. The newspaper comments that Baku may only be putting up a trial balloon to test Moscow’s reaction, but Russia might be ousted from the regional oil market by late 2005 if it reacts too weakly.

The Baku-Tbilisi-Ceyhan pipeline will start exporting oil shortly, and is expected to pump more than 50 million tons/yr of oil after completion, although it will be hard to fill it to capacity during the initial stage. Consequently, Baku has decided to find additional oil for the new pipeline, which means Novorossiisk will stop receiving Azerbaijani oil. Reverse oil flows are, at best, possible.

Sergei Markov, the director of the Institute of Political Studies, believes that Azerbaijan is not simply suspending sending oil through the pipeline to the north, but now attaches priority to Mediterranean oil exports. The Baku-Tbilisi-Ceyhan pipeline heralds the diversification of the entire pipeline network. The Russian route will gradually be frozen out. He went on to say that Russia must, first of all, try to enhance its influence in other CIS countries, the former Communist bloc, and Turkey, if it wants to prevent this.

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