18 February, 2008

Kosovo protects US pipeline

A Discreet Deal in the Pipeline

Nato Mocked Those Who Claimed There was a Plan for Caspian Oil

by George Monbiot

Gordon Brown knows precisely what he should do about BP. The company's £10bn profits are crying out for a windfall tax. Royalties and petroleum revenue tax, both lifted when the oil price was low, are in urgent need of reinstatement. These measures would be popular and fair. But, as all political leaders are aware, you don't mess with Big Oil.

During the 1999 Balkans war, some of the critics of Nato's intervention alleged that the western powers were seeking to secure a passage for oil from the Caspian sea. This claim was widely mocked. The foreign secretary Robin Cook observed that "there is no oil in Kosovo". This was, of course, true but irrelevant. An eminent commentator for this paper clinched his argument by recording that the Caspian sea is "half a continent away, lodged between Iran and Turkmenistan".

For the past few weeks, a freelance researcher called Keith Fisher has been doggedly documenting a project which has, as far as I can discover, has been little-reported in any British, European or American newspaper. It is called the Trans-Balkan pipeline, and it's due for approval at the end of next month. Its purpose is to secure a passage for oil from the Caspian sea.

The line will run from the Black sea port of Burgas to the Adriatic at Vlore, passing through Bulgaria, Macedonia and Albania. It is likely to become the main route to the west for the oil and gas now being extracted in central Asia. It will carry 750,000 barrels a day: a throughput, at current prices, of some $600m a month.

The project is necessary, according to a paper published by the US Trade and Development Agency last May, because the oil coming from the Caspian sea "will quickly surpass the safe capacity of the Bosphorus as a shipping lane". The scheme, the agency notes, will "provide a consistent source of crude oil to American refineries", "provide American companies with a key role in developing the vital east-west corridor", "advance the privatisation aspirations of the US government in the region" and "facilitate rapid integration" of the Balkans "with western Europe".

In November 1998, Bill Richardson, then US energy secretary, spelt out his policy on the extraction and transport of Caspian oil. "This is about America's energy security," he explained. "It's also about preventing strategic inroads by those who don't share our values. We're trying to move these newly independent countries toward the west.

"We would like to see them reliant on western commercial and political interests rather than going another way. We've made a substantial political investment in the Caspian, and it's very important to us that both the pipeline map and the politics come out right."

The project has been discussed for years. The US trade agency notes that the Trans-Balkan pipeline "will become a part of the region's critical east-west Corridor 8 infrastructure ... This transportation corridor was approved by the transport ministers of the European Union in April 1994". The pipeline itself, the agency says, has also been formally supported "since 1994". The first feasibility study, backed by the US, was conducted in 1996.

The pipeline does not pass through the former Yugoslavia, but there's no question that it featured prominently in Balkan war politics. On December 9 1998, the Albanian president attended a meeting about the scheme in Sofia, and linked it inextricably to Kosovo. "It is my personal opinion," he noted, "that no solution confined within Serbian borders will bring lasting peace." The message could scarcely have been blunter: if you want Albanian consent for the Trans-Balkan pipeline, you had better wrest Kosovo out of the hands of the Serbs.

In July 1993, a few months before the corridor project was first formally approved, the US sent peacekeeping troops to the Balkans. They were stationed not in the conflict zones in which civilians were being rounded up and killed, but on the northern borders of Macedonia. There were several good reasons for seeking to contain Serb expansionism, but we would be foolish to imagine that a putative $600m-a-month commercial operation did not number among them. The pipeline would have been impossible to finance while the Balkans were in turmoil.

I can't tell you that the war in the former Yugoslavia was fought solely in order to secure access to oil from new and biddable states in central Asia. But in the light of these findings, can anyone now claim that it was not?



from http://www.skyscrapercity.com/showthread.php?t=281493&page=15


AMBO Trans-Balkan Pipeline Agreement Finally Signed
December 30, 2004

Posted on Wednesday, December 29 @ 10:00:00 EST by CDeliso

Top representatives of Macedonia, Bulgaria and Albania met on Tuesday in Sofia to ink a memorandum of understanding with Ted Ferguson, president of the AMBO (Albania-Macedonia-Bulgaria Oil) pipeline project. The American-based corporation has been struggling since 1994 to get the attention of key political and industrial backers, in order to begin construction.

The first obstacle was the preoccupation of relevant parties during the Clinton Administration with the massive Baku-Tbilisi-Ceyhan pipeline in Anatolia. Then came the wars in Kosovo and Macedonia in 1999 and 2001, which left investors jittery. Now that the situation seems to have stabilized, however, the future looks bright for AMBO.

This week's gala event in Sofia brought together the major leaders of the countries involved: the Macedonian, Bulgarian and Albanian Prime Ministers, Vlado Buckovski, Simeon Saxe-Coburg-Gotha and Fatos Nano respectively. On Monday they signed a political declaration confirming their countries'

support for the pipeline. At the same time, reports the Macedonian Information Agency (MIA), Macedonian Minister of Economy Fatmir Besimi, Bulgarian Minister of Regional Development and Public Works Valentin Cerovski, Albanian Minister of Industry and Energy Viktor Doda and AMBO's Ferguson signed a memorandum of understanding.

".The construction of [the] AMBO oil pipeline is of strategic interest for Macedonia, the region and beyond, while the project is concrete proof that the climate of solidarity and understanding exists in this region, and I believe that it will improve the citizens' living," declared Buckovski. For his part, Nano called the project ".an excellent example for partnership" as well as "more than exchange of material energy."

But is the signing merely symbolic? After all, a rival pipeline that looked good to go until recently - the Burgas-Alexandropolis deal between Russia, Bulgaria and Greece - appears to have stalled due to internal disagreements.

However, AMBO president Ted Ferguson (erroneously named as "Pat" by the BBC) claims that his project has received $900 million of investor funds ".from the Overseas Private Investment Corporation (OPIC) - a US development agency - the Eximbank and Credit Suisse First Boston, among others." A big mystery until now had been whether the AMBO project actually had any solid backers. While the cash now appears to be there, an announcement has yet to be made regarding the committing parties among the oil industry.

The construction of the pipeline should take three or four years and when finished will transport 750,000 barrels of oil per day. According to the Sofia News Agency, some 25 percent of the oil to be used has already been supplied.

As could be expected, the Greek government is pushing for the Burgas-Alexandropolis alternative, citing its relative cost-effectiveness and time-saving qualities. However, as backers of AMBO have long pointed out, the Greek project does not really take care of the prevailing environmental concern (that is, avoiding the congested Bosporus shipping lanes), as it merely transfers the problem to the island-congested Aegean.

An oil spill in the Aegean would be devastating for Greece's vital tourism industry.

The AMBO project, on the other hand, avoids the sea entirely, crossing the Balkan Peninsula overland and terminating at the Adriatic port of Vlore.



Analytics: Europe’s response to Russia - Constanza-Trieste project

[ 05 Feb 2008 16:56 ]

Before Russia completed the attack on South-Eastern Europe through South Stream gas pipeline, there is something new emerging in the region. This time European Union intends to strike on weak spot of Russia.

The ink had hardly dried on the agreements signed with participation of President Vladimir Putin, when Bulgarian President Georgi Pyrvanov stated that his country still gives political support to Nabucco gas pipeline. Prime Minister Sergey Stanyshev even claimed that South Stream and Nabucco pipelines supplement each other.
“Some say Bulgaria betrayed European Union and supported Russia’s interests and this project is the alternative of Nabucco. It’s nonsense.” It is interesting that this statement coincided with the statements of Sofia-accredited U.S. diplomats that Russia’s strengthening positions in the Balkans worry them. Prime Minister of Bulgaria refused these accusations and assured that relations with Russia will not change official Sofia’s geopolitical direction towards the West.

But it seems this assuredness does not suffice everybody. Happenings in Bulgaria’s Burgas city prove it. The residents of the city, which is the outfall of Burgas-Alexandroupolis oil pipeline, the second giant energy project between Moscow and Sofia, held mass rally and protested against the project. "Our rulers sold Bulgaria", "Don’t turn Burgas into a second Chernobyl," read the posters of the protestors, who even staged an auction and sold parts of the pipeline. The agreement signed by Bulgaria, Russia and Greece with participation of Russian president envisages transportation of Russian oil to Aegean Sea bypassing Turkey’s Bosphorus and Dardanelles. Question arises how “Borjomi scenario” is realized around the project, which is considered as the alternative to Baku-Tbilisi-Ceyhan pipeline. But the referendum in Burgas on February 17, which will decide the fate of the pipeline, shows seriousness of the situation. 51% of the city residents are to participate in the voting, so that the referendum can be considered valid. President Georgi Pyrvanov stated that local referendums will not influence the fate of the project.

On the other hand, Romanian President Traian Basescu’s speech about Constanza-Trieste before foreign diplomats accredited in Bucharest shows that the happenings in Burgas are no of local character.
“Nabucco pipeline is of strategic character for Romania and European Union. Direct, effective and safe delivery of the Caspian oil is possible through Constanza-Trieste pipeline,” he said.
President Basescu expressed his hope that European Union in its new policy on Central Asia will apply more suitable approach to this strategic region.
“Romania will try to achieve the goals of this policy through the relations with its strategic partners Azerbaijan and Kazakhstan,” he said. 1.400 kilometer- Constanza-Trieste pipeline or Pan-European Oil Pipeline which is a competitor of Burgas-Alexandroupolis and Bulgas-Vlore pipelines will link the Black and Adriatic Seas. Pan-European is a proposed oil pipeline from Constant,a in Romania via Serbia and Croatia to a point near Rijeka and from there through Slovenia to Trieste in Italy. It would carry around 60 million tonnes of oil per year. The feasibility study for the project has estimated that the pipeline will commence operations in 2012.
Viorel Palashka, Romanian deputy Minister of Economy stated in the middle of January that, the government supports the joining of “Gaz de France “Company and Kazakhstan to Constanza-Triesta pipeline project. This project was the focus of attention of Bucharest along January. This issue was debated during the visit of Romanian President Traian Basescu to Belgrade on January 29.Serbia is a key country for this project and Constanza-Triesta pipeline became insolvent because of Kosovo crisis in 1999.Official Bucharest assured Belgrade that its position will be close to Serbian positions.
“We debated this project with Boris Tadic I am sure that, our political and economical partnership will successfully develop,” he said. Serbian President Boris Tadic noted that they are interested in the necessity of Constanza port and in the development of cooperation on implementation of above-said project.
Against the back drop of South stream gas pipeline Romanian-Serbian dialogue was drawn more attention last month. Most parts of the pipeline are already built except for a connection between the city of Pitesti, Romania and the city of Pancevo, Serbia, and a section between Croatia’s northern Adriatic region through Slovenia to Trieste. Compared to the Burgas-Alexandroupolis and AMBO pipelines, a pipeline which runs entirely across land and directly joins the central European pipeline network carries smaller risks associated with oil spills. There is a threat that the number of tankers passing through the Turkish straits will not fall significantly and that oil pipelines would increase the total amount of oil being transported rather than replacing tanker traffic. Bucharest and Sofia, candidates to EU competes for Pan-European pipeline and South stream gas pipeline and these countries depend on Serbia. Serbian President Boris Tadic stated that the country intends to make investment in oil infrastructure of Constanza port. It is interesting, is Gazprom which bought Serbian Oil Company last month behind the investments? /APA Analytics /



Feb. 17, 2008, 2:23PM -- Iran Opens Its 1st Oil Products Bourse

TEHRAN, Iran — Iran established its first oil products bourse Sunday in a free trade zone on the Persian Gulf Island of Kish, the country's oil ministry said.

A statement posted on the ministry's Web site said 100 tons of polyethylene consignment was traded at the market's opening on the island, which houses the offices of about 100 Iranian and foreign oil companies.

Oil and petrochemical products will be traded in Iranian Rials, as well as all other hard currencies, the statement quoted Iranian Oil Minister Gholam Hossein Nozari as saying. About 20 brokers are already active in the market, it said.

"The bourse provides an economic opportunity for Iranians, other countries and foreign customers," Nozari was quoted as saying.

Iran produces more than 20 million tons of petrochemical products per year.

Iran has already registered for another oil bourse, in which it has said it hopes to trade oil in Euros instead of dollars, to reduce any American influence over the Islamic Republic's economy.

A bourse official, Mahdi Karbasian, told the IRNA official news agency that such an oil market would begin operating within the next year.

While most oil markets are traded in U.S. dollars, Iran first floated the idea of trading oil in Euros in the early 2000s during the tenure of reformist president Mohammad Khatami. It gained new life after the nationalist Mahmoud Ahmadinejad was elected in 2005.

As the fourth-largest oil producer in the world, Iran has a measure of influence over international oil markets. The country ranks second for output among OPEC Countries, and controls about 5 percent of the global oil supply.

Tehran also partially controls the Persian Gulf's Strait of Hormuz, through which much of the world's oil supply must pass.

Iran has sought to wield its oil resources as a bargaining tool in its ongoing standoff with the West over its nuclear program.

The U.N. Security Council is considering imposing a third set of sanctions on Iran for defying a request to halt uranium enrichment. But Tehran has expressed doubt that the world body would impose sanctions on the country's oil sector, because such a move would likely drive global oil prices higher.



AMBO Pipeline Moves Forward: Interview with Gligor Tashkovich -- 1/9/2005 (Balkanalysis.com)

In this exclusive interview with Gligor Tashkovich, the Executive Vice President for Government & Media Relations for the AMBO (Albania-Macedonia-Bulgaria Oil) pipeline project, Balkanalysis.com readers are treated to the inside story on the pipeline’s progress from one of the project’s leaders. Mr. Tashkovich, contacted last week soon after the Sofia summit on AMBO, shares the following insights with Balkanalysis.com director Christopher Deliso.

Christopher Deliso: First of all, congratulations. You have been working on this for a long time, since 1994, and it must feel great to finally be getting official agreement on the AMBO project.

Gligor Tashkovich: Thanks. Well, it certainly isn’t the first agreement.?There was the initiative signed in July 2003 by the three presidents [Alfred Moisiou of Albania, Gjorgi Parvanov of Bulgaria, and the late Boris Trajkovski], for example, and there are several others.

CD: Yes, but can you tell us what is the precise significance of this current signing? Is it simply an agreement towards a common initiative, or does it hold any leaders or countries responsible for anything, establish a time line, etc?

GT: There were two trilateral signings that took place, one at the Prime Ministerial level and one at the Ministerial level.?The collective significance was that AMBO moved into the FEED stage with these signed agreements. FEED is an acronym for Front-End Engineering and Design. Typically once you enter the FEED stage, the project will be built ? a 95 percent-plus likelihood. The signed agreements also trigger commitments from some of the larger interested vendors to join our efforts.

CD: Can you name any of these interested parties?

GT: No, I can’t name them at this time - sorry.?Check back in 4-8 weeks.

CD: Looking back over the past year, can you say if there were any individuals, either from?the US side or from the Balkan governments who really made a difference in getting things moving?

GT: Yes, Dr. Peter Watson, President of OPIC has been a?terrific cheerleader for us within the Bush Administration. Also Albanian Prime Minister Nano, former Macedonian Minister of Economy Boris Rikalovski, and several high-level?people in the Bulgarian government.

CD: Along the same lines, was there any particular “breakthrough” point, action?or decision?that you can point out as having been vital for things to get to where they are today?

GT: Yes, the public withdrawal of support for the Bourgas-Alexandroupolis [pipeline project] by both the President of Transneft (the Russian oil pipeline operator) Simeon Vainshtok and LUKoil Vice President Leonid Fedun.? There was another breakthrough point too, but I will be able to speak on that at a future time.

CD: We all know that Balkan governments change with the weather. Have you sought any specific institutional safeguards, either from them, the EU or other bodies to make sure that the project goes ahead efficiently no matter who or what parties are in power over the next 2 years?

GT: All three governments are party to the Energy Charter Treaty?which regulates the construction of oil pipelines across national and supra-national territories. We also have multiple agreements from each county over the past 11 years - so no matter which party comes to power in which country, a previous government affiliated with Party X has already given support for the project.

CD: What is the current state of play with Burgas-Alexandroupolis? They can’t be overjoyed to see you surge ahead.

GT: All I can tell you is that the Russians withdrew their support.?The Greeks keep acting like nothing is happening - but all of their lobbying efforts are falling on deaf ears.?The Greek media continue to illustrate one side of the story, and the Greek Government Ministers keep putting up a brave face. Bourgas-Alexandroupolis was always a reactive project to AMBO.?Therefore, we must always set the pace.

CD: Bulgaria is EU-bound and stable. Albania is poor and somewhat chaotic, but has no enemies either. Macedonia on the other hand is in danger from Kosovo Albanians who wish to break the country apart. In this light, how will the pipeline project be affected if unrest in Kosovo continues to seep across the border - especially in 2005, the year when “final status” is supposed to be negotiated in the increasingly volatile province?

GT: I predict that the 2005 deadline you cite will slide based on what I have been reading over the last several months. The most important thing to keep in mind is that oil companies work in considerably more unstable parts of the world than the Balkans. The Balkans are reasonably peaceful in comparison.?So it is a matter of relativity.

CD: Have you sought any specific guarantees regarding Macedonia’s stability? If so, who or what will vouch for the country? Will US policy change if mischief-makers start causing trouble in a pipelined Macedonia?

GT: You could make the case, somewhat easily I suspect,?that America will care what happens to Macedonia if an oil pipeline carrying oil supplying America runs through it.?Gosh knows there has been plenty of commentary on the web about the intersection of oil and international politics in general.

CD: What view do international pipeline insurers take about working in this part of the world? Do they have reservations? What is the cost comparison compared with other European regions?

GT: You can probably go to the websites of the Overseas Private Investment Corporation (OPIC) and the Multilateral Investment Guarantee Agency (MIGA) and look up this information. I don’t have it handy, sorry.?These entities (and also the U.S. Export-Import Bank) have what are called County Limitation Schedules that discuss the level of coverage, if any, that they have for certain countries or certain types, i.e., public or private projects within countries.

CD: The BBC cited AMBO President Ted Ferguson as saying some $900 million has already been guaranteed for financing. Is this correct, and is there a higher target goal to be reached? Can you give more details?

GT: This is debt financing.?We have also raised some equity and we need to raise more. The debt-equity ratio is approximately 75 percent/ 25 percent.?The year 2000 construction estimate for the pipeline was $1.13 billion within a margin of error of -10 percent and +20 percent.

CD: I know you have said many times in the past that all the major oil companies are potential players. But now that the initial inter-governmental signing is done, you have some cash and are talking about completing the pipeline in the foreseeable future, do you have any updates on prospective oil companies to work with?

GT: Nope, sorry!? You are a subscriber to the AMBO News Service.?You know which companies are exporting oil from the Caspian region into the Black Sea.?Ask them.?We will put out a press release when we have news that we can share on this.?I can’t tell you when that will occur - except to say that I expect it to be in 2005 - and hopefully sooner rather than later.

CD: Finally, on the environment. I know the point of AMBO is partially to avoid the environmental dangers of the Bosporus, and that your pipeline construction and valve structure makes leaks rare and, even if occurring, localized. Nevertheless have you run into any opposition from local environmentalists, the way BTC was hampered by people in Georgia over Borjomi? And has the re-planned route caused any more concerns?

GT: No - no objections of any kind.?And if you should be in touch with any local environmentalists, please tell them that we would like to engage them sooner rather than later in a constructive conversation where we can address any fears they have up front and be confident of our pledges concerning the environment.?The Macedonian government did change the route to move it away from Lake Ohrid.?A Microsoft Powerpoint map shows the before/after changes between the two routes.



"The `AMBO' Corporation (Pound Ridge, NY) has announced, on 17th January 1997, that Mr. E.L. (Ted) Ferguson - formerly Director of Oil & Gas Development for Europe and Africa for `Brown & Root Energy Services' has joined `AMBO' as President & CEO.... The `AMBO' Corporation (an acronym for the `Albanian- Macedonian-Bulgarian Oil Corporation') is the project developer of the 826 million $ Trans-Balkan Oil Pipeline which will carry crude oil from the Bulgarian Black Sea port of Bourgas to the Albanian Adriatic Sea port of Vlor....The feasibility study for `AMBO's ` Trans-Balkan Oil Pipeline, conducted by the international engineering company of `Brown & Root Ltd.' in London.... The resulting pipeline will become a part of the region's critical East-West corridor infrastructure which includes highway, railway, gas and fiber optic telecommunications lines. This pipeline will bring oil directly to the European market by eliminating tanker traffic through the ecologically sensitive waters of the Aegean and Mediterranean Seas."
Skopje, 23 January, 1997


"The routes of potential trans-Balkan oil pipelines were laid down according to the interests of their future [EU and US] users....The territory of Yugoslavia (both former and present federation) is significant, therefore, because of its geographic position. Influential American analysts insist on the claim that Yugoslavia is in the immediate neighborhood of a zone of vital US interests - Black Sea/Caspian Sea region. And wherever there are vital US interests, there are NATO troops to protect them. European interests, claim our interlocutors, are even greater, because it is definitely not in the interest of the European Union countries that the key to their supplies is held by someone else....The project SEEL (South East European Line), initiated by the Italian company ENI is actually the corridor for transportation of Caspian oil from Constanta to Trieste, which passes through Serbia and uses the existing system of the Adriatic oil pipeline, all the way to Omisalj... Because of the political situation in Serbia this project was delayed for some better times... Until the fall of Slobodan Milosevic's regime Croatia insisted that the connection with Constanta bypass Serbia by going through Hungary [a less economic route]. However, after October 5 and the political changes in Yugoslavia, the meeting of this same group held in Brussels on October 26 and 27, 2000, expressed support for the transport of Caspian oil following the route from Black Sea, Romania, Yugoslavia and Croatia, respectively from Romanian port Constanta, through Pitesti, and Pancevo to Delnice in Croatia, from where the new pipeline would go towards Trieste and the old one continue to Omisalj on the island of Krk."
Underground Games in Kosovo
Reporter, Banja Luka, Srpska, B-H, February 27, 2001



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