United States Information Service
18 November 1997
(Four countries endorse pipelines for Caspian oil) (1030) Washington -- Secretary of Energy Federico Pena gained the support of Turkey, Azerbaijan, Georgia, and Turkmenistan for east-west pipeline routes to transport oil and gas from the Caspian Sea region to transit points to international markets. While on a presidential mission to the Caspian region, Pena "proposed that the countries [Turkey, Azerbaijan, Georgia, and Turkmenistan] work together to prepare proposals for the pipeline from Baku to Ceyhan by October 1998, when the Azerbaijan International Operating Company will make a decision about main export routes." According to the Department of Energy press release, "In each meeting, Pena reinforced the U.S. government's opposition to investments in Iran's energy sector and any investment or transit of Caspian oil and gas through Iran." Pena said that the U.S. position "is clear -- we do not support conducting ordinary business with a country that funds, trains, and supports terrorists or seeks to acquire weapons of mass destruction." Following is the text of the Department of Energy press release: (Note: In the following text, "trillion" equals 1,000,000 million, "billion" equals 1,000 million.) (Begin text) U.S. DEPARTMENT OF ENERGY November 15, 1997 PENA WINS SUPPORT FOR EAST-WEST EURASIAN TRANSPORT CORRIDOR FOR CASPIAN OIL AND GAS Turkey, Azerbaijan, Georgia, Turkmenistan Endorse East-West Pipelines U.S. Energy Secretary Federico Pena has secured the support of four key nations in the Caspian region -- Turkey, Azerbaijan, Georgia, and Turkmenistan -- for the East-West pipeline routes to transport Caspian oil and gas that will be critical to ensuring diversity and security of world oil supplies. Pena made the announcement today at the end of a five-day presidential mission that he led to the Caspian region, which is estimated to have the largest unexplored oil and gas reserves in the world. The mission included the Departments of Energy, State, and Commerce. The leaders of Turkey, Azerbaijan, Georgia, and Turkmenistan also endorsed the United States' proposal for an East-West pipeline route, as a part of its support for commercially viable multiple pipelines, from Baku, Azerbaijan to Ceyhan, Turkey. "We accomplished our objective by making significant progress on a matter of serious strategic importance," Pena said. "The United States cannot and will not be dependent on any one region for oil and gas. East-West routes for Caspian oil and gas will allow producers to reach international markets without going through Iran. While there's still a significant amount of work to do before these pipelines can become a reality, this is an important step in the right direction." In meetings with the leaders of Turkey, Azerbaijan, Turkmenistan, and Georgia, Pena proposed that the countries work together to prepare proposals for the pipeline from Baku to Ceyhan by October 1998, when the Azerbaijan International Operating Company will make a decision about main export routes. Pena also proposed the development of trans-Caspian pipeline routes from Turkmenistan and Kazakhstan to Azerbaijan. In Armenia, Secretary Pena and President Ter-Petrossian discussed the importance and potential benefits to Armenia of participating in regional energy development. "The decisions being made today about export routes for Caspian oil and gas will have an important impact on the energy security of the United States in the next century," said Pena. "Multiple pipelines with an east-west axis will ensure that Caspian Basin oil and gas can get to western markets, and will increase the security and diversity in world oil supplies." In addition, Secretary Pena met in Baku with Russian Deputy Prime Minister Nemtsov and expressed support for cooperative solutions in which Russian companies could participate fully. "Both Russia and the United States have shared interests in the energy development, peace, and stability of the region," Pena said. Pena emphasized that companies and financial institutions are essential parties in all pipeline development. "No oil or gas pipeline will be possible without the fullest participation and support from the private sector." Secretary Pena met with President Demirel and Prime Minister Yilmaz of Turkey, President Ter-Petrossian of Armenia, President Aliyev of Azerbaijan, President Niyazov of Turkmenistan, and President Shevardnadze of Georgia. In each meeting, Pena reinforced the U.S. government's opposition to investments in Iran's energy sector and any investment or transit of Caspian oil and gas through Iran. "The United States' position is clear -- we do not support conducting ordinary business with a country that funds, trains, and supports terrorists or seeks to acquire weapons of mass destruction," Pena said. In Baku on Wednesday [November 12], Secretary Pena participated in the celebration of "Early Oil," the first oil exported from Azerbaijan's offshore fields by the Azerbaijan International Operating Company, a multinational consortium with 40% ownership by the U.S. firms Amoco, Exxon, Pennzoil, and Unocal, in partnership with SOCAR, the Azerbaijan state oil company, LUKoil (Russia), BP and Ramco (UK), Statoil (Norway), and Itochu (Japan). "The Caspian is at the crossroads between East and West," Pena said. "As the custodians of vast supplies of natural resources, the countries of the Caspian Basin have the potential to raise the standard of living and quality of life for their citizens and strengthen independence, democracy, and prosperity throughout the region." In his meetings with the leaders, Pena also discussed expanding opportunities for U.S. businesses, and he also met with representatives of several U.S. companies who are doing business in the region. In Turkey, Pena participated in a signing ceremony between General Electric and Atam Electrik Power Project. "U.S. companies are ready to help meet energy and other commercial needs and offer the technological and capital investments that are so clearly needed in this region," Pena said. Proven oil reserves in the Caspian region are estimated at 15 to 29 billion barrels, comparable to those in the North Sea. The Caspian region's possible reserves could yield another 163 billion barrels, roughly equivalent to a quarter of Middle East reserves. Proven gas reserves are estimated at 236-337 trillion cubic feet, comparable to North America reserves. Possible gas reserves could yield another 328 trillion cubic feet. (End text)