Main Route for Caspian Oil Fixed

The oil will be transported to Europe via Turkey, while Georgia will get dividends for the use of its territory. The pipeline could be extended to Kazakhstan, while Ukraine will be asked not to interfere in the near future. Kyiv could be strategically interested only in the Baku-Supsa-Odesa-Druzhba pipeline project, which is presently viewed only as one of several possible additional routes. In this project, Ukraine may also have to compete with Romania and Bulgaria.

The diplomats of the involved parties have been rather reserved so far, saying only that, in fact, not everything has been decided yet, and that the most interested companies - British Petroleum, Amoco, Exxon, Pensoil, and Unocal - will announce their support or rejection of the Baku-Ceyhan route on November 12. However, in his interview with The Day, Turkish Ambassador to Ukraine Alp Karaosmanoglu noted that under the current conditions of world oil prices dropping and the Caspian extracting facilities operating at partial capacity, the creation of more than one export system is not economically feasible.

In addition, the presidents of the declaration's signatory countries the significant tax and tariff breaks for the project participants, and the United States is allocating a $823,000 grant and guaranteeing insurance from political risks for the future project parties. The biggest drawback of the Baku-Ceyhan route is its cost, which, according to the Associated Press, is estimated at $2.5-4 billion. Apparently, with the signing of the Ankara declaration, the issue now will be when the Baku-Ceyhan route will become operational and if the Ceyhan-Samsun pipeline will be built, in which Ukraine plans to take part. Project cost is estimated at about $3 billion, and funding sources have not yet been determined.

Until now, only Poland has repeatedly voiced support for transporting Caspian oil from the Azerbaijani and other deposits via Ukraine. Recently, however, Poland was also joined by Hungary, but those are hardly the markets for which international financial institutions would immediately finance this route. It is still considered only prospective, and Ukraine's trump card in fighting for it can be only full completion of the Odesa terminal and the Odesa-Brody pipeline, which will also cost a great deal. Yet, the only country that definitely looks defeated is Russia. Ukraine is still viewed as a "reserve" country - if it manages to involve the West in the same way Turkey has, if oil extraction in the Caspian Sea goes up, and if oil prices do not drop.