Caspian producers suspend oil exports via Georgia

11 August 2008 09:26  [Source: ICIS news]

MOSCOW (ICIS news)--Kazakhstan and Azerbaijan, major oil producers in the Caspian region, said on Monday they were suspending oil supplies via Georgia following the country’s continued conflict with Russian forces over the breakaway region of South Ossetia.

 

Kazakhstan's Prime Minister Karim Masimov told a cabinet meeting crude oil, previously exported via Georgia's port of Batumi, would be rerouted.

 

Kazakhstan exported about 1m tonnes/year of crude via Batumi, Masimov added.

 

However, Serik Burkitbayev, CEO of Kazakhstan's state-run oil giant KazMunaiGaz, told the cabinet meeting a Kazakhstan-owned oil terminal in Batumi remained unaffected by the hostilities.

 

Azerbaijan suspended its oil exports via Georgia from the ports of Batumi and Kalevi as of Sunday night, said Rovnag Abdulayev, CEO of the country’s state-run oil company SOCAR.

 

SOCAR was considering oil exports via the Baku-Novorossiisk pipeline through Russia, he added.

 

Crude futures have risen by close to $2/bbl in early trading in London, amid concerns the military conflict could escalate and further disrupt supplies.

 

At 08:10 GMT, September Brent on London ICE Futures was trading at $115.15 /bbl, up $1.82/bbl on last Friday’s settlement price, having earlier hit a high of $115.24/bbl, up $1.91/bbl

 

Georgia, which has no significant oil or gas reserves of its own, is a key transit point for oil from the Caspian and central Asia regions to Europe and the US, the only route which avoids Russia and Iran.

 

The Baku-Tbilisi-Ceyhan (BTC) pipeline, which is led by BP, was opened in 2006 and can pump up to 1m bbl/day of Azeri crude to the Turkish port of Ceyhan.

 

Part of the BTC pipeline running through Turkey had already been closed due to an unrelate fire that occurred last week.

 

About 249km of the route passes through Georgia, parts of it very close to South Ossetia, where the conflict has erupted.

 

Georgia has called a ceasefire after pulling its troops out of South Ossetia but despite Western calls to end hostilities, Russian planes have reportedly bombed targets near its capital Tbilisi, while Moscow accused Georgian forces of firing on Russian positions.

 

James Dennis contributed to this story 

 

To discuss issues facing the chemicals industry visit ICIS connect

 

 

 

 

By: Sergei Blagov
+44 20 8652 3214

< previous article(VIDEO - ICIS news Asia Lunchtime Bulletin 16 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly