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Source: Reuters; Türkiye, BP solve BTC pipeline row; April 30, 2003


Türkiye and BP said yesterday they had addressed land and tax problems in the way of the construction of the $3 billion Baku-Tbilisi-Ceyhan (BTC) oil pipeline to carry Caspian crude to world markets.


Project-leader BP's Michael Townshend said he had discussed issues of taxation and the compulsory purchase of land for the pipeline with Turkish Energy Minister Hilmi Guler.


"We raised those concerns with the minister and he has taken strong action to solve the problems," Townshend told a joint news conference with Guler in Ankara. "Now we share the view that all issues have been addressed and the pipeline project is on track," he added.


He said the pipeline running 1,800 km from Azerbaijan to the Turkish Mediterranean coast would be completed by the end of 2004.


Pumping would start at 300,000 barrels per day in 2005, rising gradually to 800,000 barrels a day by 2008 compared to the pipeline capacity of one million barrels a day, he said.


The project was proposed by Türkiye in the early 1990s to bypass its busy Bosphorus straits, the only outlet at present for Russian and other oil transported via the Black Sea.


It would also earn Ankara valuable transit revenues for its frail economy and raise Türkiye's strategic importance in the region.


The project has received strong support from the U.S. government as it would help diversify oil supply line routes from the region. Baku-Ceyhan would be the first pipeline bypassing both Russia and Iran but it has long been criticised by oil companies for being non-commercial.


But interest by some U.S. and European oil companies operating in Kazakhstan to add significant volumes to the BTC pipeline has made the project feasible, according to several oil analysts.


"Kazakh oil is welcome but not necessary to make BTC commercial," Townshend said.


About 30 per cent of the project will be financed by the sponsor group initially and the remaining will be financed via loans from international banks. Top


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