THE COST OF construction of the Baku-Tbilisi-Ceyhan oil export pipeline could exceed the original $3.6-billion budget by 5-7%, the head of Azerbaijan’s state oil company Socar,Natik Aliyev, said recently. “The project is costing more than budgeted due to delays in construction work in Georgia and Turkey,” he said; the delays were caused by late ordering of materials and slow organization of a sufficiently large workforce to do the job. Rising oil prices also added to growing costs. However, the Azeri president, Ilham Aliyev, said there would be no impact on the project. “It’s a normal process, and there is no danger for the project,” the president said. “In every big project there are areas where costs can be cheaper or more expensive than expected,” he added.
The pipeline to the Turkish Mediterranean terminal Ceyhan, which will eventually carry 1 million brl/d of crude from offshore Azeri oilfields, is being developed by a BP-led consortium and is due to become operational later this year. BP, Socar, ENI, Itochu, Unocal, Statoil, ConocoPhillips, and Total are shareholders in the project.
