ENI, Kazakhstan debate may affect Samsun-Ceyhan pipeline

ENI is the major partner on the Samsun-Ceyhan pipeline, and Kazakhstan is the source of the oil that will be transported through the pipeline. The problems between these two sides increase anxieties over the future of the pipeline. Although Energy Ministry officials say the disputes will cease very soon, the energy specialists are not as optimistic as the officials. ENI had declared they would not be able to begin production before 2010, although the oil field was planned to begin production in 2005. This statement stretched the patience of the Kazakh government to its limit. The government claimed they had accrued a $10 billion loss due to the delay and Italian Prime Minister Romano Prodi has plans to visit Kazakhstan at the end of this month in order to ease tensions.

Energy specialist Necdet Pamir said the latest developments increased the question marks about the future of the Samsun-Ceyhan pipeline and he thinks the disputes can not be solved in a short amount of time. He said the Kazakh government was also trying to implement a strategy like Russian President Vladimir Putin did against the foreign firms and to increase its control over the exploration and production processes in the country. “Kazakhs are trying to change the current agreement conditions,” he said. According to Pamir, there were two main reasons behind oil not being extracted in the region for years, although it has 13 billion barrels of reserves.

“Russia’s restrictions to foreign investors on pipelines and natural gas and difficulties with their businesses due to tax problems with oil encourage the Kazakhs. They want a larger share in the operation of natural resources,” he said, adding that this was the Kazakh side and on the Italian side the problem overlaps with the transportation of crude oil. “This makes ENI reluctant regarding production.” Pamir said with the launching of the Samsun-Ceyhan pipeline, ENI’s concerns on transportation declined. However, debates on the Kashagan oilfield were on track, he pointed out. He said the situation has caused some suspicions over whether there were other factors behind the debates. “Russia has objected to Samsun-Ceyhan since the very beginning. It is obvious that Kazakhstan built its oil and natural gas strategy around the premise of not disturbing Russia. So we can look at how Russia factors into these disputes,” he said.

İstanbul Technical University Energy Institute Director Professor Abdurrahman Satman said the dispute between ENI and the Kazakh government directly affects the Samsun-Ceyhan pipeline’s future. “However the problem is not because of production but because of political issues,” he added. (turkishweekly.net)