Rumours Circle Regarding LUKoil Decision

The top Russian oil company, LUKoil, may have refused to take part in construction of the Baku-Ceyhan pipeline because its bid for Azerbaijan's ten percent of the Sah Daniz gas field was rejected, the First Vice-President of the State Oil Company of the Azerbaijani Republic SOCAR Ilham Aliyev has said.

Other companies were willing to take part in this project, including France's TotalFinaElf but SOCAR has not entered into any talks on this issue because Azerbaijan is not going to sell its share, Aliyev said.

Aliyev dismissed as rumours the press reports suggesting that LUKoil had declined to participate in the project because of pressure from Viktor Kalyuzhnyy, the Russian deputy foreign minister and the special envoy of the Russian President Vladimir Putin on Caspian Sea affairs, and Russian Deputy Premier Viktor Khristenko. “We have also heard that Putin receives somewhat partial information on this issue, but we do not know exactly what it is,” Aliyev said.

Another reason why LUKoil's refusal is surprising is that this could create serious problems for the company itself, when oil from the Azeri and Ciraq oil fields will be transported via the Baku-Tbilisi-Ceyhan pipeline, Aliyev said.

LUKoil could transport its oil via the Baku-Novorossiysk pipeline, but then its expenditure is going to be four or five times higher. As for the conditions for LUKoil's participation in developing the Araz-Alov-Sarq oil field, over which Azerbaijan and Iran are in dispute, Aliyev said that LUKoil was willing to take part in this project but there were no talks on its specific share, Sarq reports.

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