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Oil & Gas Journal

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Sept. 12 -- BP PLC said its trans-Caucasus Baku-Supsa pipeline, also known as the Western Route Export Pipeline, remains shut a month after its closure due to the conflict last month between Russia and Georgia.

"It was shut as a security precaution," said BP spokesman David Nicholas. "The situation remains unchanged," he said of the line which had been carrying some 45,000-90,000 b/d of Azeri crude before the Aug. 12 shut down.

Last month, a BP spokesman said that efforts to restart the WREP had been "put on hold until we can assess the impact of this conflict on the integrity of this pipeline," (OGJ, Aug. 30, 2008).

The continued closure of the line adds to Azerbaijan's export problems as shipments of Azeri oil by rail across Georgia also remain halted after being stopped when railway bridge was damaged during the hostilities.

Despite the continued delays in reopening the oil export links, the region is still viewed as a viable energy corridor by neighboring governments and international oil companies.

Earlier this week, Tengizchevroil (TCO), the Chevron-led consortium developing the Tengiz oil field in western Kazakhstan, made an agreement with the State Oil Company of the Azerbaijan Republic to transport oil by rail across Georgia.

TCO will send up to 2 million tonnes/year of oil (40,000 b/d, on average) by barge across the Caspian Sea to Azerbaijan, according to a source at SOCAR, although volumes could eventually increase to 5 million tpy.

Analyst Global Insight interpreted the agreement as indicating that TCO is "more concerned with finding outlets for its growing oil production than it is about the inherent risks of relying on Georgia as a transit state in the wake of the Russia-Georgia war."

Contact Eric Watkins at hippalus@yahoo.com.