Increasing Oil Production in Caspian Demands Building at least one Pipeline - Matthew Bryza

Politics Materials 20 October 2006 17:10 (UTC +04:00)
Increasing Oil Production in Caspian Demands Building at least one Pipeline - Matthew Bryza

The United States believes that expanded competition through new commercially developed pipelines, especially in the Caspian region, will provide economic efficiency and more stable supplies of oil and natural gas in Europe. Citing a major increase of oil production in Kazakhstan as just one example of recent developments in the European energy market, Matthew Bryza, deputy assistant secretary of state for European and Eurasian affairs, reinforced U.S. support of new and expanded oil and natural gas pipelines in the region, Trend reports with reference to the statement of the Bureau of International Information Programs, U.S. Department of State.

Describing the European natural gas market as dysfunctional, Bryza on October 17 stressed the need for increased competition, particularly through the building of more pipelines for oil and natural gas.

He made his remarks during a conference co-sponsored by the Center for Transatlantic Studies at the Johns Hopkins School of Advanced International Studies and the Center for European Policy.

According to Bryza, the United States, along with other countries, is working hard to develop investment schemes to stimulate more public-private energy partnerships in the Europe and Eurasia region because at the end of the day, private companies have to do it. Therefore, he said, the projects backed by governments have to make commercial sense.

Gas and oil pipelines have been a source of great policy debate among nations. Many countries, including the United States, see the need for more diversification in energy markets and seek to establish new relationships between states and private investors to increase economic gains for all involved.

In regard to Kazakhstan's involvement in the Baku-Tbilisi-Ceyhan (BTC) pipeline agreement, Bryza called it a natural marriage that should occur with Azerbaijan.

The 1,600-kilometer, $3.9 billion BTC pipeline opened July 13 and is designed to carry oil from Azerbaijan through Georgia to Turkey's Mediterranean coast.

On June 16, Kazakhstan and Azerbaijan reached an agreement to facilitate the transport of Kazakh oil across the Caspian Sea to link with the BTC pipeline.

Bryza, in his remarks, also supported the expansion of the Caspian Region Consortium (CPC) as a means of avoiding energy transport problems that arise from the natural limit of the amount of oil that can move through the Turkish Straits to reach markets in Western Europe. The CPC pipeline links reserves in western Kazakhstan to the Black Sea, providing access to world markets.

Bryza also acknowledged that the proposed Pan European Pipeline -- a 1,319-kilometer oil pipeline from Constanta in Romania via Serbia and Croatia to Trieste in Italy intended to bypass the ecologically vulnerable Turkish straits for transporting Russian and Caspian oil -- is just one idea to solve the transport problem.

Citing three separate feasiblity studies funded by the U.S. Trade and Development Agency to evaluate other potential pipelines in Europe and Eurasia, Bryza mentioned that increased oil production in Kazakhstan and other parts of the Caspian region will require at least one of these pipelines to be built. He said that the decision on which pipeline will be able to utilize the next big increment of oil from the Caspian region will be determined by the appeal of each private-public parternership for investors.