Russia signals end to Georgia military operations

12 August 2008 11:47  [Source: ICIS news]

By Sergei Blagov and Hilde Ovrebekk

MOSCOW (ICIS news)--Russian military operations in Georgia were halted on Tuesday as Turkish industry sources said oil flow on the Baku-Tblisi-Ceyhan (BTC) pipeline, which was disrupted in an unrelated incident, was expected to resume within a week.

Georgian claims that the Baku-Supsa pipeline had suffered minor damage after being targeted by warplanes were denied by Russian military officials. 

"We do not strike oil pipelines as such strikes could entail serious environmental repercussions," Russia's deputy chief of general staff Anatoly Nogovitsyn was quoted as saying by Reuters news agency.

A London-based spokeswoman for BP, which runs the pipeline, said she was not aware of any reports of a possible bombing. Part of the pipeline runs through Georgia.  

A Turkish Energy and Natural Resources Ministry official, who did not wish to be named, told ICIS news the oil flow on the 1m bbl/day BTC pipeline, part of which also runs through Georgia, was expected to resume within a week after a fire on the Turkish section was extinguished on Monday, six days after being hit by an explosion.

He added that any possible continuation of the conflict between Russia and Georgia was not expected to affect supplies on the pipeline.

Another Turkish industry source said the number of international companies involved in the pipeline would possibly stop the Russian government from attacking it.

Russia has increased oil exports from Azerbaijan from 83,000 tonnes/month to 166,000 tonnes/month in anticipation of any supply disruptions in Georgia.

The oil price remained unaffected by the conflict, with Brent crude on London's ICE futures down $1/bbl from Monday's settlement price at 08:26 GMT.

"The objective of the operation has been achieved... the aggressor was punished," Russia's President Dmitry Medvedev said of the conflict, which began last Thursday when Georgia launched an assault on South Ossetia.

Russian Foreign Minister Sergei Lavrov denied it had expanded its military action into Georgia, despite recent reports of Russian aircraft bombing the Georgian town of Gori, but he added Russian peacekeepers would remain in South Ossetia and Abkhazia.

Earlier this week, Azerbaijan's state-run oil company Socar and Kazakhstan's KazMunaiGaz, announced plans to reroute some crude oil and oil products previously exported via Georgia's port of Batumi which was only partially operating.

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.

 

About 249km of the BTC pipeline passes through Georgia, parts of it very close to South Ossetia.

 

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By: Sergei Blagov
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