Radical Noesis - Thinking outside the box

Picture is from the EIA Azerbaijan Country Analysis

There are a number of companies involved in the pipeline project. The following is taken from the Baku - Ceyhan Campaign:

Baku-Tbilisi-Ceyhan oil pipeline (BTC)
The Baku-Tbilisi-Ceyhan was planned and is being built by the BTC Pipeline Company (BTC Co), a consortium led and operated by British oil major BP. Shares in the consortium are distributed as follows:

BP (UK) – 30.1%, operator
State Oil Company of Azerbaijan (SOCAR) – 25%
Unocal (US) – 8.9%
Statoil (Norway) – 8.71%
Turkish Petroleum (TPAO) – 6.53%
ENI (Italy) – 5%
TotalFinaElf (France) – 5%
Itochu (Japan) – 3.4%
ConocoPhillips (US) – 2.5%
Inpex (Japan) - 2.5%
Delta Hess (joint venture of Delta Oil (Saudi Arabia) with Amerada Hess (US)) – 2.36%

Then we have the linking South Caucasus Pipeline (SCP):
Partners:
BP – 25.5%
Statoil – 25.5% operator
State Oil Company of Azerbaijan (SOCAR) – 10%
TotalFinaElf – 10%
LUKAgip (joint venture of Lukoil (Russia) with Agip (Italy)) – 10%
OIEC (Iran) – 10%
Turkish Petroleum (TPAO) – 9%

Azeri-Chirag-Guneshli oil fields : controlled by the Azerbaijan International Operating Company (AIOC), comprising:

BP – 34.1%, operator
Unocal – 10.3%
State Oil Company of Azerbaijan (SOCAR) – 10%
Inpex (Japan) – 10%
Statoil – 8.6%
ExxonMobil (US) – 8%
TPAO – 6.8%
Pennzoil (US) – 5.6%
Itochu – 3.9%
Delta Hess – 2.7%
(Not all these companies support the BTC pipeline route).

Shah Deniz gas field

The Shah Deniz consortium is the same as that which controls the SCP:

BP – 25.5%
Statoil – 25.5% operator
State Oil Company of Azerbaijan (SOCAR) – 10%
TotalFinaElf – 10%
LUKAgip (joint venture of Lukoil (Russia) with Agip (Italy)) – 10%
OIEC (Iran) – 10%
Turkish Petroleum (TPAO) – 9%

An article by Yigal Schleifer in the 12/30/05 Christian Science Monitor asks whether oil is a mixed blessing for Azerbaijan? He essentially decides that it is unlikely that the people of Azerbaijan are unlikely to benefit because they are not a "democratic state." An interesting comment, democracy may have little to do with who benefits. British Petroleum does not have a good track record of bringing prosperity with its projects.

"... BP's practice in other countries casts doubt on the extent to which the host governments would benefit from the BTC pipeline.

Head of BP John Browne made his name on the Forties Pipeline System in the North Sea, coming to prominence in the1980s by skillfully enabling BP to avoid paying tax to the UK government. Throughout the last 30 years of the Forties pipeline, BP has continually lobbied UK governments to lower the tax on North Sea oil extraction. Today, the North Sea has the lowest taxation of any oil province in the world: royalties and petroleum revenue tax were abolished for fields developed after 1982 and 1993 respectively.

BP followed the same pattern of driving down taxes, and thereby depriving the host states of revenue, in Alaska and Colombia. In the Trans-Alaska Pipeline System, BP was found several times (including in two court cases where BP settled out of court) to have overcharged transport fees and underpaid royalties through inaccurate accounting. In the OCENSA pipeline in Colombia, BP has repeatedly threatened to disinvest from the country so as to improve its contract terms, and it succeeded in obtaining a reduction of the state share of production from 50% to 30%." Lessons from BP's past

William Engdahl argues that the Caspian Pipeline opens a Pandora's Box of problems for the region. Energy companies are not the only ones interested in controlling the resources of the region. Behind them stand governments and other big money interests. The complex of "interests" in the face of a booming Asia and a peak oil and gas dependent world do not bode well for the area. If the U.S. invasion of Iraq had anything to do with oil and the entrenching of U.S. forces in the geo-political strike zone (and I think it did) then that base of operations will be used to "nudge" governments to follow U.S. economic interests. However, the China-Russia-Iran coalition is also moving into an equally powerful and influential position. Asia may very well be "ground zero" of World War III, and there will be no doubt that it is a resource war.

Engdahl's article addresses parts of this as does an even earlier on by George Anjaparidze and Cory Welt at EurAsiaNet titled A Georgian-Russian Pipeline: For Peace or Profit? They seem to argue that despite conflicts of interest, that the BTC will bring both peace and profit as it is in everybody's interest. I do not share that perspective.

Assuming that the pipelines bring the wealth that many seem to expect, it is unlikely to evenly improve the economic or living conditions of populations who live largely in abject poverty. As with the oil fields in Africa, the pipeline will become symbolic of exploitation - not simply of resources, but of the people. Exclusion from the economic benefits flowing into the hands of a few, will increase unrest for those left out almost entirely. This has the possibility of creating a high degree of unrest which can be exploited by a variety of groups ... and nations.

The Washington Institute for Near East Policy predicts that the BTC will make Ceyhan the "nexus of global energy lines." Does anyone think that Azerbaijan has the political stability to be a "global nexus" for an increasingly scarce resource? Will Azerbaijan even stand a chance in the collision of forces that will be fighting for position and control? It seems highly unlikely to me. Particularly as China lays down gauntlet in energy war with its sponsoring of a separate pipeline from Kazakhstan to China - a pipeline that is in direct competition with the U.S. backed BTC pipeline.

How complex can all of this get? Very complex indeed.