Problem With Btc Pipeline In Turkey Unlikely To Cause Halt In Production

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¶1. (SBU) According to press reports, an explosion took place
on August 6 at 0200 on a section of the Baku-Tbilisi-Ceyhan
(BTC) pipeline located in a remote, mountainous area in
eastern Turkey. Murat Heydarov, who is the Advisor to the
President for the State Oil Company of Azerbaijan (SOCAR),
told the Embassy that the Turkish energy company BOTAS is the
operator of the pipeline on Turkish territory; otherwise a
BTC consortium led by British Petroleum operates the pipeline
in Azerbaijan and Georgia. SOCAR has been in contact with
BOTAS, which initially reported a fire at a pumping station
instead of an explosion. Although the fire was likely caused
by a technical problem, BOTAS had not ruled out the
possibility of sabotage.

¶2. (SBU) According to a spokesperson for British Petroleum in
Azerbaijan, the affected section of the pipeline has been
closed and oil transport along the BTC has stopped.
Approximately 70,000 barrels is at risk near the accident
site, either at risk of a spill or burning. However, the BP
spokesperson noted that oil production from Azerbaijan’s
Azeri-Chirag-Guneshli (ACG) field has not been affected.

¶3. (SBU) SOCAR confirmed that production is continuing
despite the halt in transport along the BTC. Heydarov
reported that AzPetrol storage tanks at the Sangachal
Terminal can hold up to three days of production. Diversion
of some oil production through the recently reopened
Baku-Supsa pipeline (Georgia-Black Sea), the Novorossiysk
pipeline (Russia-Black Sea), or by rail transport to Batumi
(Georgia-Black Sea) is being examined as well. Given that
the BP spokesperson in Azerbaijan is quoted in the press as
saying that the pipeline will be repaired within hours as
opposed to days and the plans for storage and diversion,
production seems unlikely at this point to be affected by the
pipeline fire.