Baku-Ceyhan Pipeline Talks in Progress

The expert working groups that took part in the talks, which began on February 26th, are carefully working out every point in the draft agreement between potential investors and Georgia accross whose territory the pipeline is due to pass, Natik Aliyev, president of Azerbaijani state oil company SOCAR, told reporters on Thursday. "All is being done to ensure the normal functioning of the pipeline over several decades," Aliyev said. Aliyev also said that the talks in Turkey had produced an agreement on one issue that had remained unresolved following talks in Georgia in mid-February. As Interfax has learned from informed sources, until recently the main point of contention in the talks had been the issue of Georgia_s responsibility for pipeline security in force-majeur circumstances: natural disasters, terrorism or vandalism. The draft agreement contains a clause on "comprehensive damages" under which Georgia will be responsible for financing the costs of correcting damage to the pipeline within Georgia, as well as for paying compensation for damages to the consortium, including losses from lower oil production and idle tankers and refining capacity in Ceyhan. Georgia says it cannot afford to accept those liabilities. Officials in Tbilisi say the draft agreement is a threat to Georgia_s sovereignty and perhaps even its independence. If a terrorist attack were to take out one of three $55 million - $60 million substations in Georgia, the costs under the "comprehensive damages" clause would total at least $150 million.