Source Pravda.Ru

So Far Iraqi Developments Do Not Threaten Construction of Baku - Ceyhan Oil Pipeline

For the time being the developments in Iraq are not threatening the construction of the Baku-Ceyhan oil pipeline with any complications to speak of, head of the fund of assistance to the development of the market economy and former head of the State Oil Company of Azerbaijan Sabit Baghirov believes.

He noted in an interview with RIA Novosti that problems could only arise in connection with the overload of some main transport lines with military cargoes. This may influence the time of receiving some or other cargoes necessary for building the pipeline but, in the expert's opinion, will not cause any serious changes in the schedule of its construction.

Baghirov disagreed with the view that the project will not have economic prospects if the war in Iraq ends within a short time and the world prices of oil drop in this connection.

Asked at what level the oil prices must be kept to make the oil pipeline profitable, the expert cited the calculations by the leading managers which, as he said, show that profitability will be ensured even if the prices are at the level of 15 U.S. dollars per barrel.

Sabit Baghirov is sceptical also about the opinion that if the US establishes control over the oil resources of Iraq the world prices of oil will not be formed by the market but by "managerial-administrative methods".

He said the USA would hardly control Iraqi oil and manipulate the world oil prices. Besides that, Baghirov said, the potential of the Iraqi oil supplies - approximately 200-250 million tons a year - is not so large. To bring the Iraqi output of oil to the volumes capable of changing the world prices, sizeable investments will be needed. Of course, the USA will gain a certain instrument of influence but it will not be determining, the expert concluded.

In his opinion, the OPEC member countries which supply 40 percent of world oil, as well as Russia will succeed in containing the prices at the level close to 25 dollars per barrel which suits both oil suppliers and oil consumers.