Oil pipeline threats add to pressure on Azerbaijan

Oil-rich Azerbaijan is being rattled by disruption and attacks on pipelines, highlighting its tough geopolitical position and adding to worries about falling oil prices. Having been courted by previous US governments, international interest in Azerbaijan and fellow Caspian producer Kazakhstan has waned in recent years, not least because of the increase in US shale oil production. Azerbaijan’s oil production is, in any case, thought to have peaked. But with 848,000 b/d of output last year, Azeri production still matters. A reminder of the country’s precarious position came when neighboring Georgia said last month that South Ossetia, a Russian-backed separatist region within its territory, had expanded its de facto borders, taking in a short section of the BP-operated Western Route Export Pipeline (WREP). The WREP runs from Azerbaijan to Georgia’s Black Sea coast and has a capacity of 100,000 b/d. BP said security issues meant it had already been unable to access part of the pipeline since a 2008 war over South Ossetia. BP has long talked of rerouting the line — which last year was the target of two illegal taps in Georgia, one of which resulted in a spill of more than 12,000 liters of oil — but has … continue reading

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Source: CTRM Center

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