Giant Caspian oil pipeline opens

(Gold9472: The spoils of war)

Oil is set to begin flowing from the Caspian Sea direct to the Mediterranean for the first time after a $3.6bn (£2bn) pipeline opened on Wednesday.
Starting in Azerbaijan, the 1,600km (1,000 mile) pipeline will pass through Georgia to the Turkish port of Ceyhan.

The project has taken more than 10 years to finish and will unlock one of the world's biggest energy reserves.

It has not been without controversy, however, and there have been protests about the impact on the environment.

Some demonstrators were beaten and arrested last Saturday, with Azeri authorities saying that they acted because the protest was too close to the pipeline.

High profile
Wednesday's ingeneration at the Sangachal oil terminal near Baku was attended by presidents from Azerbaijan, Kazakhstan, Georgia and Turkey.

US Energy Secretary Samuel Bodman also was present at a ceremony where the taps were turned on.

The pipeline has been an international effort and was built by a consortium led by UK oil giant BP, which has a 30% stake.

Other consortium members include Azerbaijan's state oil company Socar, Amerada Hess, ConocoPhillips, Eni, Inpex, Itochu, Statoil, Total, TPAO and Unocal.

David Woodward, the head of BP's operations in Azerbaijan, said that the opening marked the former Soviet republic's "rebirth as an important country for the oil industry, just as it was more than a century ago".

Azerbaijan's President Ilham Aliev said that "this pipeline first of all will help solve economic and social problems" but also will play a role in "strengthening peace and security in the region".

Wider implications
The BBC's Emma Simpson said from Baku that for energy-hungry countries such as the US the pipeline is a strategically important non-Russian, non-Middle Eastern source of oil.

The Caspian area produces a high-quality light crude, but has suffered in the past because of the difficulty of getting its oil to consumers in Europe, the US, China and Japan.

Until now, states in the region sent almost all of their oil via Russian pipelines.

The Caspian project is not without risk, however, as the pipeline runs through the volatile Caucasus and will require constant surveillance to prevent it from attack, our correspondent said.

Work on the pipeline was given fresh impetus in the late 1990s after BP made new oil discoveries in Azerbaijan and crude prices began to recover from historic lows.

Up to a million barrels a day will eventually be heading directly west, gushing underneath miles of rugged terrain.

However, it will take several months merely to fill the pipeline, which has a capacity of 10 million barrels.

The oil in the pipeline will initially come entirely from Azerbaijani fields, but Kazakhstan is expected to participate in the project before the end of the decade.