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Thursday, June 08, 2006

Iran studies joining Caspian oil pipeline

BAKU: A top Iranian energy official said yesterday that Iran could negotiate pumping its oil from prospective Caspian oil fields through the US-backed pipeline intended to carry the rich Caspian Sea oil resources to Western markets.

Mahmood Khaghani, the Caspian department chief in the Iranian oil ministry, said that Iran's relations with Azerbaijan were solid enough to discuss an opportunity for Iran to pump its crude into the pipeline that carries oil from Baku, Azerbaijan, to Turkey's Mediterranean port of Ceyhan.

"We are currently exploring for oil in the southern Caspian," Khaghani told reporters when asked whether Iran could join the pipeline consortium. "Our relations with Azerbaijan have been developing so successfully that, if we get positive results in the southern Caspian, we could discuss the issue."

He said, however, that "the companies which today are pumping crude through the Baku-Ceyhan pipeline could decide tomorrow that it's more feasible to carry oil to world markets via the Iranian territory."

"Economic feasibility should be the main factor," said Khaghani, who attended a Caspian energy conference in Baku.

The US-backed Baku-Ceyhan pipeline, which opened in May 2005, allows the West to tap oil from the rich Caspian Sea fields, estimated to hold the world's third-largest reserves, bypassing Russia and Iran.

The full official launch of the 1,760km pipeline will take place in the southern Turkish port of Ceyhan on July 13. It is eventually expected to bring 1 million barrels a day of Azerbaijani crude to Ceyhan for export to the West.

British oil giant BP is the pipeline consortium's main participant and the largest foreign investor in Azerbaijan's oil sector.
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