BAKU (Reuters)–Oil-rich Caspian states should be free to export their oil as economically as possible and not be pressed to export through expensive–politically-motivated pipelines–Iran’s ambassador to Azerbaijan said on Friday.
As several major Western-dominated oil consortia develop projects offshore Azerbaijan–Iran is backing a pipeline to take Caspian oil through its territory.
However–the US Turkey and Azeri governmen’s are putting huge diplomatic efforts into urging the consortia to build a main export pipeline west to Turkey.
"We know of course that oil is and always has been linked to politics," Ambassador Alireza Bikdeli told Reuters in an interview at Iran’s embassy in Baku.
"But countries which link oil with politics must always bear in mind one point–and that is countries which have only just gained independence will have no patience with pressure. This pressure on these countries could have many dangerous consequences," he said.
"The creation of a pipeline does not really need so much effort–it just needs money," Bikdeli said. "Lots of money."
The proposed line from Baku to Ceyhan on Turkey’s Mediterranean coast has been valued at $3.7 billion by the Azerbaijan International Operating Company–the consortium which would have to pay for it.
Bikdeli said he believed oil reserves in the Caspian were lower than many now think and big pipelines were not justified.
"Results of recent drilling consortia mean companies will become more conservative," he said.
Instead of building long pipelines–Iran favors shipping Caspian oil–far more cheaply–across Iran to the Gulf.
"Transport of oil across Iran will be something that actually happens. We are sure that if oil is found in the volumes we expect–then the variant of transporting it across Iran will be unavoidable," he said.
At least one company–Britain’s Monument–is already exporting crude through Iran. Bikdeli said European–American and even Chinese firms were looking closely at following suit.
Asked if he thought world oil prices were so low that they might jeopardize Caspian oil development altogether–he said Iranian experts had been warning of this for some time.
Some analysts have said members of the Organization of the Petroleum Exporting Countries–including Iran–could actually benefit from low prices if they drive high-cost producers out of business and allow OPEC to regain market share.
"I think OPEC faces several different prospects. This question of whether low prices could help is one of those prospects," Bikdeli said without elaborating.
He was optimistic that the vexed question of political division of the Caspian Sea between littoral states could soon be resolved–pointing out that foreign ministers of all five coastal states would meet in Moscow soon to discuss it.
Iranian-Azeri relations have been tense in recent years–a fact Bikdeli blamed on interference by third countries. But he said there were steady religious links between the two countries.
Bikdeli said Islam was one of the pillars of the identity of the people of Azerbaijan.
As he spoke–the call to prayer reverberated throughout the embassy. The call is rarely heard elsewhere in Baku.