Magazine article Washington Report on Middle East Affairs

Baku-Ceyhan Update-Oil and Water Don't Mix

Magazine article Washington Report on Middle East Affairs

Baku-Ceyhan Update-Oil and Water Don't Mix

Article excerpt

SpecialReport

Three years ago, to expel doubts, then-- President Bill Clinton made a special trip to Istanbul to countersign an earnest document that Azerbaijan and Turkey build the Baku (Azerbaijan) and Ceyhan (Turkey) oil pipeline. Last year the two countries laid the symbolic first section of pipe, near Baku, with Secretary of Energy Spencer Abraham reading the laudatory words of President George W. Bush.

A snag has been hit, however, because the pipeline would threaten the Republic of Georgia's highly prized mineral water in the Borjami Valley. Activists already have demonstrated outside the London offices of the European Bank of Reconstruction and Development, which was to put up the financing for the project. This means that loans from the Bank might not be available until the second half of this year.

Israel-and thus the United States-are sedulously pushing the pipeline to prove to Turkey that its alliance with Israel pays off in Washington. British Petroleum (BP), which heads the 11-member consortium to build the 1,100 mile, $3 billion Baku-Ceyhan, faces difficulties in finalizing terms for external financing due to the project's high cost, technical challenges and security and environmental concerns. …

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