BP EXEC MEETS GEORGIAN PRESIDENT, SEEKS PERMISSION TO PROCEED WITH PIPELINE CONSTRUCTION
8/03/04

A top British Petroleum executive met with Georgian President Mikheil Saakashvili on August 3, aiming to secure permission to proceed with construction of the Baku-Tbilisi-Ceyhan pipeline through an environmentally sensitive area of Georgia. Georgian officials earlier ordered a two-week construction halt in the Borjomi region, saying BP had not obtained the necessary permits.

David Woodward, BP’s top executive in the Caucasus who is overseeing the BTC project, sought to reassure the Georgian leadership that the oil giant was committed to protecting the Borjomi region, site of a national park and mineral water springs. Woodward reportedly characterized his talks with the Georgian president as successful without disclosing details. No Georgian officials gave any immediate comment on the discussions. The day before the Woodward-Saakashvili meeting, Azerbaijani officials raised the Borjomi-BTC issue during talks with Georgian Prime Minister Zurab Zhvania.

The Borjomi controversy can be traced to July 12, when Georgia’s Environment Ministry reportedly sent BP a formal reminder that the oil company needed permits to begin construction on a 17-kilometer stretch of pipeline that passes through the Borjomi region. BP reportedly did not respond to the government reminder, and, as photographs taken by local activists affiliated with the World Wildlife Fund (WWF) showed, the company proceeded with construction in the area. The government issued an order July 22 to suspend construction for two weeks, giving BP time to obtain the necessary permits.

"Given its natural resources, the Borjomi District is of vital importance," Georgian Environment Minister Tamar Lebanidze told a July 23 news conference. "We are demanding additional safety guarantees." At the same time, other government officials stressed that Tbilisi was not demanding a change in the pipeline’s route, adding that they did not believe that construction would be suspended for an extended period, the Civil Georgia web site reported.

Shortly after the stoppage was announced, a BP representative in Tbilisi, Rusudan Medzmariasvhili, indicated that a two-week halt would not cause any change in the pipeline’s overall construction timetable, which calls for the 1,750-kilometer conduit to be completed in early 2005.

The plan to run the BTC pipeline through the Borjomi region of Georgia has long generated controversy. Environmental groups have asserted that BP’s plans to protect the area from spills and other pipeline-related problems are inadequate. [For background see the Eurasia Insight archive]. The US $3.6-billion project has been plagued by negative publicity of late. In late June, a report published by the British newspaper, The Independent, said the safety of the pipeline was being threatened by shoddy construction practices. Contractors and sub-contractors, according to the report, were "cutting corners" in the attempt to meet construction deadlines.

The United States is a strong backer of the BTC project, which is widely viewed in Washington as a way to get Caspian Basin oil and gas to market without relying on two potential geopolitical foes – Iran, which offers the shortest and cheapest route between the Caspian and seaports, and Russia, which already has a network of pipelines that flow directly into Europe.

International lending institutions, including the European Bank for Reconstruction and Development (EBRD) and the World Bank’s International Finance Corporation, are providing key financial support for the BTC project. Environmental activists are now trying to exert pressure on these institutions to get tough with BP. "In violating Georgian law, BP is clearly in violation of its loan agreements with the World Bank and other funders," said Nicholas Hildyard of the Corner House, a British activist group. "The Bank claims it spent hundreds of millions of dollars of our money on this pipeline because of the additional protections it can bring to make the project better. The Georgian government has acted in response to these violations; the funders must now do the same if they are to retain any credibility."

The Borjomi construction incident has served to heighten suspicions among activists about BP’s commitment to environmental protection. "BP has repeatedly said that it will construct this pipeline to the highest standards," said Hannah Griffiths of Friends of the Earth. "But whenever the standards get in the way of the construction schedule, they get jettisoned."

According Manana Kochladze, a prominent Tbilisi-based environmentalist who has tracked BTC construction, Saakashvili’s administration is concerned not only about BTC’s environmental safety standards, but also about ensuring its security against a possible terrorist attack. "It [BTC construction] is now a political issue, so I expect that it will require a political resolution," Kochladze said.

Editor’s Note: EurasiaNet contributor Jim Lobe provided reporting for this article.

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Posted August 3, 2004 © Eurasianet
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