08ASTANA1212, KAZAKHSTAN: AZERBAIJAN STILL SLOW TO COOPERATE ON

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA1212.
Reference ID Created Released Classification Origin
08ASTANA1212 2008-07-03 08:44 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #1212 1850844
ZNY CCCCC ZZH
P 030844Z JUL 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2701
INFO RUCNCIS/CIS COLLECTIVE 0551

C O N F I D E N T I A L ASTANA 001212 
 
SIPDIS 
 
STATE FOR SCA/CEN M. O'MARA 
 
E.O. 12958: DECL: 07/01/2018 
TAGS: PGOV PREL EPET KZ
SUBJECT: KAZAKHSTAN:  AZERBAIJAN STILL SLOW TO COOPERATE ON 
TRANSPORTATION ISSUES 
 
Classified By: AMBASSADOR ORDWAY FOR REASONS 1.4 (B) AND (D) 
 
1. (C) Summary: Azerbaijan has still not approved a Heads of 
Agreement on trans-Caspian transportation despite assurances 
to Kazakhstan that they would approve the agreement by June 
15.  Azerbaijan is also encouraging Kazakhstan to use the 
Baku - Novorossiysk pipeline and downplaying Baku - Supsa, to 
the chagrin of the Kazakhstanis. Kazakhstan faces another 
conundrum on the Eskene - Kurik pipeline, as they juggle 
commitments to Chevron and the Kashagan consortium.   End 
Summary. 
 
Kazakhstan Still Worried By Azerbaijan Inactivity on 
Trans-Caspian Transportation 
--------------------------------------------- --------------- 
 
2. (C) Arman Darbayev, KazMunaiGas Executive Director for Oil 
Transportation and Service Projects, told Poloff on July 1 
that Azerbaijan has still not approved a draft Heads of 
Agreement on Trans-Caspian transportation.  According to 
Darbayev, Kazakhstan presented Azerbaijan the draft in March. 
 In early June, SOCAR President Abdullayev told a Kazakhstani 
delegation that Azerbaijan would approve the agreement by 
June 15. Nevertheless, Kazakhstan has received no response 
from Azerbaijan, said Darbayev.  The agreement must be signed 
by August, or the 2007 Memorandum of Understanding on 
trans-Caspian transportation expires.  Asked the reason for 
the delay, Darbayev said that he believes the Azerbaijanis 
are "playing games sometimes" but he offered no further 
elaboration. 
 
3. (C) Darbayev told Poloff that Kazakhstan is "very keen" to 
use the Baku - Supsa pipeline.  Again, however, Darbayev 
suggested that the Azerbaijanis are creating obstacles. 
According to Darbayev, Azerbaijan is trying to push control 
of Baku - Supsa to SOCAR, and said that the Georgians believe 
that the Azerbaijanis will soon be the operator of the 
pipeline.  Darbayev indicated that Georgia and Kazakhstan are 
in agreement on Baku - Supsa and will try to work together to 
push Azerbaijan. 
 
4. (C) The Azerbaijanis have suggested that Kazakhstan 
utilize the Baku - Novorossiysk pipeline.  For Kazakhstan, 
this is a non-starter, said Darbayev.  He noted that 
Kazakhstan can ship oil directly to Makhachkala without going 
through Azerbaijan.  In addition, Kazakhstan could just as 
easily use the Atyrau - Samara pipeline, but it is looking to 
reduce volumes transported through Russia. 
 
5. (C) In Darbayev's view, Azerbaijan's first priority is BTC 
expansion, but only to 1.2 million, and not 1.6, bbd.  Their 
second priority is to expand their railway system to 
accomodate 25 million tons of oil a year and to fill the 
Kuhlevi terminal.  For Kazakhstan, a second BTC is too 
expensive but a second Baku - Supsa might be an option.  But 
Darbayev identified a number of uncertainties - the real 
production of Azerbaijan and Kazakhstan, BTC capacity, and 
what volumes will be shipped to Iran. 
 
Caught Between Chevron and the Kashagan Consortium 
--------------------------------------------- ------ 
 
6. (C) Despite recent press reports of a Chevron - Kazakhstan 
partnership to build the Eskene - Kurik pipeline, Darbayev 
admitted that Kazakhstan's obligations to the Kashagan 
consortium muddy the waters.  "If we go with Chevron," said 
Darbayev, "we need to have NCO (North Caspian Consortium) on 
board." At the very least, the consortium will need to be 
given guaranteed access and stability assurances. 
 
7. (C) Comparing Chevron and the Kashagan consortium, 
Darbayev described the consortium as more flexible, and said 
that Chevron has taken a "strong, tough position."  According 
to Darbayev, Chevron initially said that they wanted 10% of 
the pipeline's capacity, but they now seek 15%.  They also 
have proposed establishing conditions for the pipeline now, 
with the Kashagan partners joining later.  Darbayev 
acknowledged that the Kashagan partners will require 
guaranteed volumes from the start and will want some input in 
creating the conditions. 
 
8. (C) Comment: With Azerbaijan seemingly inactive and the 
Eskene - Kurik pipeline the subject of dispute, the 
Kazakhstanis will need to push hard to maintain trans-Caspian 
momentum.  Nevertheless, the Trans-Caspian route is an 
inevitability; even if other routes are expanded, including 
CPC, the capacity will not be sufficient.  The difficult 
question to be solved now is what will happen to Kazakhstan's 
oil beyond Baku. End Comment. 
ORDWAY

Wikileaks

Advertisements
Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: