The New Anatolian, Turkey
Aug 4, 2006
Former President Suleyman Demirel: ‘The BTC is an engineering
masterpiece and a political success’
Gokhan Kazbek – EkoTurk News Agency / Ankara
The idea of transferring Azeri oil to Turkey through a pipeline dates
back to 1991 when the USSR collapsed. For 15 years there was heated
debate surrounding the project. In 1992 when the Baku-Tbilisi-Ceyhan
(BTC) project for Azerbaijan oil was officially proposed, it included
Iran on the transit route and was announced to the world as the
Azerbaijan-Iran, Nakhchivan-Turkey pipeline. But the route wasn’t
approved of by the U.S., which was explicit about its attitude
towards the regime in Iran and maintained an economic and commercial
embargo on the country.
Afterwards, the alternative route to Turkey through Georgia was
offered. In response, other lines were suggested supported by Russia,
ones stretching to the Black Sea, ignoring Turkey’s concern over the
Straits, and yet others which bypassed the Straits and had little
economic value. A midway was devised in the 1999 Organization of
Security and Cooperation in Europe (OSCE) summit in Istanbul with the
contribution of the United States and the leaders of the countries
involved.
In the presence of U.S. President Bill Clinton, Turkish President
Suleyman Demirel, Azeri President Haydar Aliyev, and Georgian
President Eduard Shevardnadze – Aliyev has since passed away, and the
others are no longer in office – signed the package deals that
involved Azeri oil being brought to Ceyhan. Clinton also signed the
agreement as the observer. In accordance with the terms of 1999
agreement, basic engineering groundwork was initiated at the end of
2000. The construction actually began in 2003. The first drops of oil
reached Ceyhan in late May, and the first tankers were loaded in
early June.
Turkey’s former President Suleyman Demirel told EkoTurk News Agency
about the process of the BTC oil pipeline.
EKOTURK: Mister President, there have been many media stories about
the BTC. You were one of the main actors of this project. Could you
tell us a little about its foundations?
DEMÝREL: A new period began in 1989 across the world with the
collapse of the Berlin Wall. After the fall of the wall, the Mikhail
Gorbachev administration emerged in Russia with two important
concepts of Glasnost and Perestroika (i.e. transparency and
efficiency), the principles that they wished to introduce to the
management of the state. Actually both were signs of the collapse of
the Soviet system. They proved to be complementary. The Soviet system
collapsed in 1989-1991 and new independent republics emerged in
Central Asia and the Caucasus. Countries in the Balkans, in Central
and Eastern Europe that were under the influence of the Soviet rule
shed this system. That brought along a new and very significant
change in political geography of the world. A point to stress here is
that the change wasn’t anticipated at all. History had not hitherto
witnessed an empire that collapsed without any bloodshed or strife.
The Soviet Empire was truly an empire, a giant country s! preading
over 22 million square kilometers on which 250 million people lived
and spoke 104 languages. It was an industrial country with immense
military might. It also possessed vast economic power. However, while
half of Europe, Western Europe, attained a per capita income level of
some $20,000 , the Soviet system could not go over $3,000. Hence it
was evident that the Marxist and Communist rule that rested beneath
the Soviet system didn’t suffice to take a country forward despite
having achieved certain things. And people began to talk about new
things: "a new world order" was to be built. It became clear later on
that this new world order would be built on democracy, human rights,
and the market economy. That was the system that made Europe rich.
Both the new republics and the republics that came out of Soviet
influence embraced democracy and the market economy to astonishing
degrees and turned their faces to the West with their old guard even
before the! y built their new institutions. As these developments
were un! derway, Turkey embraced the Eurasian region for its part.
Most of Eurasia were countries that rested on 11 million square
kilometers of territory, with a population of 200 million, most of
which spoke Turkic languages and were Muslim. Turkey had seen these
countries and peoples as captivated countries and captivated peoples.
Ataturk had an almost prophetic vision: "We cannot do anything for
these places at the moment. But the time will come when the Soviet
system will collapse just like the Ottoman Empire did. We should be
taking care of them on that day." In early 1991, the day came. All,
or at least most of these kin countries that spoke Turkish, countries
whose destinies we could not figure out for many years and which we
didn’t know very well even during the Czarist period that was
undermined by 80 years of Communist rule, were now rid of the
oppression.
At the elections of fall 1991, the True Path Party (DYP) that I was
heading won the elections and I was told for the seventh time to form
a Cabinet. So I established a coalition government together with the
Social Democratic Populist Party and started my post. At about the
time the republics that we term Eurasian countries were just
declaring independence. As soon as they declared independence, Turkey
took a close interest in these countries. I received the post to
establish the government on Nov. 7, 1991 and as our government had
not been given the vote of confidence on Nov. 9, 1991, the Cabinet
preceding ours recognized Azerbaijan. Our government began its post
as the 49th Cabinet on Nov. 20, 1991 and recognized all of the
republics that emerged out of the Soviet system. These included
Kazakhstan, Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan. On
the other side Yugoslavia also collapsed and Turkey recognized the
countries that were born out of that as well. The gover! nment that
we established in 1991 recognized all the countries out of the
collapsed Soviet empire and the countries in the Caucasus, including
Georgia and Armenia, with the world context in mind. New countries
and a new commonwealth emerged, and we had moral and ethical duties
to these countries, that’s what we felt. Actually, these countries
didn’t know us very well and vice versa. But we were in a position to
get to know them. We formed strong relationships with Azerbaijan on
Jan. 14, 1992. I visited Turkmenistan, Kazakhstan, Uzbekistan and
Azerbaijan as the premier on April 27-May 2, 1992.
‘Newly independent countries didn’t want a new big brother’
These were very young republics at the time and had nothing at hand.
They had founded a state but the state had no institutions. These
states would be founded on democratic principles but they had no
knowledge of democracy. The state would acknowledge the market
economy but they had neither the institutions nor the entrepreneurs
to get the market economy going. Most important of all, they had no
legislation either. In terms of development, 50 percent of the Soviet
economy actually rested on military industries but military industry
had lost its appeal too. They didn’t know what to do. We advised
these countries what to do for democratic rule and a market economy
and we delivered files to each of the country leaders with
information on what to do about things. All of these countries were
gravely in need of certain things as their markets and their current
systems had come to a total halt. They needed everything, from food
to medicine. Besides, there was no party that co! uld make
investments, and other countries were unwilling to invest under hazy
circumstances as well. I committed during my visit to lend these
young republics $1 billion in the name of the Republic of Turkey. The
credits were opened and later used. With the exception of Kyrgyzstan,
all were repaid. I also opted to invite students from these countries
during the visit. The first group would number around 3,000 people
and the figure would later climb to 15,000 people. Hence we would be
building bridges with these countries, incoming students would study
at Turkish universities, would learn the Anatolian dialect of
Turkish, would see Turkey and be able to compare Turkey’s development
with the development attained by communism in their countries. They
would see that there was development outside communism and the
comfort and the liberty in Turkey. This was a very successful
program. These countries only knew of Moscow as the window to the
outside world. Their connection to! Moscow needed to be severed, or
rather, diversified. New act! ors needed to be involved alongside
Moscow. We connected their television and telephone administrations
to Turkey at a time when all their affairs were dependent on Moscow.
Turkey was a window to the world for these countries.
These countries had extraordinary natural resources. Hence I advised
themý: "Unless you can process these natural resources and bring them
to light, the prosperity of your people will not be a possibility."
The nations needed prosperity. We told them that they needed to
develop the industries that would meet the needs of their people and
we would help them out for that and consequently we did so. In the
following 10 years Turks undertook 80 percent of the public work and
construction projects in the region. Among the natural resources
energy and mining were forerunners. And among these the most
significant resources were oil and gas resources. Gas was the
resource of Turkmenistan and oil was that of Kazakhstan and
Azerbaijan as well. At the time, the amount of global oil reserves
was known to be 1 billion barrels. Some 66 percent of that was in the
Persian Gulf. Iran was part of that. Twenty percent was in the
Caspian basin, and 20 percent was in other countries ! of the world.
Turkey was situated at such a location that, while it didn’t hold oil
and gas, it was neighboring it. Turkey could just as well cooperate
with its neighbors to process this oil and gas and help these
countries prosper while it would become an energy corridor or energy
terminal itself. Turkey built the Kirkuk-Ceyhan pipeline for that
matter and before that had brought its own oil from Batman to
Ýskenderun and built a pipeline from Ceyhan to Kýrýkkale. Therefore,
it had some experience with pipelines. It could undertake these as
well. Turkey, at the end of the day, had built the pipeline that
received gas from Russia (the Blue Stream project was nonexistent at
the time). Nevertheless, it wasn’t clear how much oil Azerbaijan
possessed. The amount of oil processed in Azerbaijan was a mere 8-10
million tons. Azerbaijan has had oil for a very long time but the
amount of it had fallen to very low levels. Russia bought and
processed all of the gas in Turkme! nistan. Kazakhstan began to
search for oil particularly in th! e Tengiz region. Kazakh President
Nursultan Nazarbayev took a quite bold step and opened his country to
the world. Oil depends on global capital and global experience
anyway. The world’s oil industrialists came and found vast resources
in Tengiz and new resources elsewhere later on. The relations between
Turkey and Azerbaijan started out very positive as these
Turkic-speaking countries are actually people of the same nation in
terms of language, traditions and customs but among all of them
Azerbaijan is the closest to Anatolian Turkishness. In terms of both
language and traditions, Azerbaijan was seen as the second state of
the same nation. The intimate relations served the cooperation
between Azerbaijan and Turkey to a great extent. We signed an
agreement with Azerbaijan administrators in Ankara on March 9, 1993.
I put my signature underneath as prime minister and Hikmet Cetin
signed as the foreign minister and Sabit Bagirov as the oil minister
of Azerbaijan. This is ! how the Baku-Ceyhan oil pipeline started
officially. The rest is just chatter, before this point is just
chatter, whoever might talk about it, including myself, it is just
chatter. We say we should do it, and I have outlined all of these to
indicate why we should do it. Unless you know these, the rest is
dross. Turkey had some concerns. First of all we started out with
great enthusiasm and as a Eurasian state in the heart of Eurasia, but
how do we cooperate with the Turkic world in Eurasia in terms of
trade, culture and education without provoking concerns over
Pan-Turkism and Pan-Islamism? These newly independent countries
didn’t want a new big brother. We were to engage in cooperation in
equal terms but become more interdependent. One of the ways of
boosting interdependence is to step up individual relationships. I
think that holds more water than the trade part. This is about
bringing the Turkic world closer together. In every step taken here
we need to seek to brin! g the Turkic world closer outside of the
conditions of Pan-Tu! rkism and Pan-Islamism.
Turkey had another concern: Since the time of the Soviet Union, oil
transfers were blocking the Bosphorus and Dardanelles Straits in
Turkey and causing accidents. The city of Istanbul was facing fire
hazards. The more we could transfer the oil that we got from Russia,
the Caucasus and Central Asia from the Black Sea to the Mediterranean
without using the Straits, the greater Turkey would benefit.
Therefore at the preliminary agreement we signed on March 9, 1993 we
committed in principle to bring down Baku oil as part of Caspian oil
to the Mediterranean. I had discussed the same issue with Mr.
Elchibey prior to that date, and so had (late President) Turgut Ozal.
And yes, we should bring Caspian oil down to the Mediterranean and
save the Straits and in the meantime improve our relations with these
countries, we should bring the gas in Turkmenistan to Turkey, each of
these were part of our considerations and we needed to materialize
those considerations but first of all that re! quired some presence
of oil in Azerbaijan. But there was no oil in Azerbaijan. I would
like to mention at this point an occasion that turned out to be a
landmark.
Aliyev opened oil areas in the Caspian Basin to the world
Haydar Aliyev received the post of president of the Republic in
Azerbaijan in 1993. Aliyev was a knowledgeable and great statesman
who knew the world very well. Aliyev opened to the world the oil
areas reserved for them in the Caspian Basin. He opened them to
global companies with an agreement called the Production and Sharing
of Azerbaijan Oil. That is a major event. He called that the
"contract of the century" himself. A corporation was founded between
Azerbaijan state company SOCAR and foreign firms, and Turkish TPAO
was a shareholder with 1.75 percent. By the way, I’d like to stress
this one point: I went to Davos in 1992. Russia was melting down and
new countries were emerging. I had just been around Central Asia, and
I said in Davos: "A new political geography is appearing after the
Cold War. This is not a conflict zone or a new area of penetration;
to the contrary, it should be a safe haven for peace and prosperity
whereby conflicts will be rep! laced by a spirit of cooperation and
coexistence." I declared these points to all nations in Davos.
After this international corporation was founded in 1994 there were
new efforts. Another 5 percent was added to the share given to Turkey
in 1995. In the meantime, there were ongoing negotiations, debate as
to where the pipeline should pass. There was conflict between
Azerbaijan and Armenia on Karabakh. There was considerable debate on
whether it should pass through Iran or Georgia and eventually
resolved that technically speaking, the right thing to do was to pass
it through Georgia. But that was disputed: Some said that as there is
the Baku-Supsa line, it could very well be expanded and used to
transfer the oil in Azerbaijan and so there was no need for a
Baku-Ceyhan line. Russia was an opponent at the end of the day. Mr.
Aliyev and I responded to those and insisted that the Baku-Ceyhan
line be built and the right thing to do was to pass it through
Georgia. But what would Georgia do about this? I find the role of
Shevardnadze here to be very significant. Shevardnadze thoug! ht this
line would be very important not only in economic terms but also to
connect the Caucasus and Caspian countries to Turkey and supported
the idea to the very end. The route of the line was now clear, but
there were many other issues concerning nationalization. None of
these countries had any experience with that. Such a widespread
movement was never seen in this region. But both Aliyev and
Shevardnadze handled the nationalization issues very well. Aliyev
went to Tbilisi to give Shevardnadze a boost and increased their
share. So the template was now on the table.
Then the 75th Anniversary of the Turkish Republic was celebrated. The
presidents of Azerbaijan, Uzbekistan, Kazakhstan and Georgia as well
as U.S. energy secretary attended the celebrations and we signed an
agreement with them on Oct. 29, 1998. Here we issued a declaration
and hence the Baku-Tbilisi-Ceyhan oil pipeline project took another
leap forward. Now the real issue was actually this: On Nov. 18, 1999
the Organization of Security and Cooperation in Europe (OSCE) meeting
was held in Istanbul and intergovernmental agreements were made on
that occasion. Aliyev signed the agreement for Azerbaijan,
Shevardnadze for Georgia and myself for Turkey. U.S. President Bill
Clinton was the witness. Host country agreement, turnkey contracting
agreement and the governmental guarantees agreement were signed on
that date. The matter was well on track, the issue now was to find
the money, run the tenders and manage the construction. The
construction project and other tasks were completed! by Sept. 18,
2002 and then the foundation was laid with a ceremony by the
presidents of Turkey, Azerbaijan and Georgia. Oil was transferred for
the first time on May 25, 2005 and the pipeline was opened with a
ceremony on July 13, 2006.
The annual revenues of the project for Turkey are $300 million. The
project should not be assessed based solely on this but other
benefits of the project concerning the Straits and connecting Eurasia
should be taken into consideration as well. However, Turkey will in
any case be making significant amount of money from this project
within a time frame of 40 years. Many people contributed to the
materialization of this project. The late President Turgut Ozal
supported the project in the beginning, and in the aftermath these
figures should be cited: Aliyev, Clinton, Bush – father and son both
– Nazarbayev, Shevardnadze, and myself as the president of the
Republic of Turkey. Of course, all the relevant institutions of
Turkey, and Botas first of all, contributed to the project to a major
extent. And hence this giant project, "the project of the century,"
came to life.
This is how I put it across in the OSCE meeting in 1999: "Today we
are not only connecting the Caspian and the Mediterranean, but also
bonding our destinies together. Today we are making our common dreams
come true. The agreements that we have just signed will serve peace
and prosperity. We are not only declaring our resoluteness to
transfer the oil and natural gas resources of the Caspian basin to
world markets in an economic and environmentally friendly way, but
also responding to the call of history."
EKOTURK: How would you define the BTC project?
DEMÝREL: In my opinion this project is an engineering masterpiece and
a political success, a diplomatic triumph at the same time. It is a
diplomatic triumph to surpass Russia and to bring this project thus
far is a diplomatic. It is a great political achievement to bring the
ex-Soviet republics together and to add Turkey and the U.S. on and to
bring such a project to fruition.
The point is that the project is undertaken and completed. The
questions of who opened it and the like are just details. In fact,
the remembrance and the consideration of those that have served in
the materialization of this project is just for the sake of those who
will serve after this point. What matters for those who have served
is that the work is complete. To thank those who served will
encourage those who will serve, that is the reason why they should be
remembered.
EKOTURK: Looking at the implementation and the achieved results, can
we say that the project reached its goal?
DEMÝREL: Yes, we can. The pending task is to provide oil to the
world. The project sources will be enriched in that new oil resources
will be discovered and that will help those countries to a great
extent. If the Kirkuk pipeline continues to operate there will be
150-200 million tons of oil. That is a significant figure for Turkey,
so much so that Turkey is almost becoming an oil country, even though
the oil does not belong to itself and the oil in the country belong
to others.
EKOTURK: What is the benefit of this pipeline for the United States?
DEMÝREL: Some of the companies are American companies and part of the
capital is American capital, but the main point is that the United
States as a superpower would always wish to enhance its prowess in
this region. Of course, the construction of such a pipeline would
increase the influence of the U.S. and the U.S. would wish to
maintain the power it acquires in the coming term rather than
preserving the power it has accumulated thus far. Therefore it would
aim to stay on good terms with the countries in the region. The U.S.
has given a lot of support to the project. If they had not supported
the project, we would have faced significant difficulty in finding
money and overcoming the political obstacles.
EKOTURK: How did you feel at the opening ceremony on July 13?
DEMÝREL: I was very pleased, very gratified. My country has gained a
new facility. A major part of the things that I envisioned has come
true. Many things that seem to be a dream for others have become
reality for me, and this is one of them. My country has boosted its
power.
EKOTURK: Thank you for talking with us.
DEMÝREL: Thank you.
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