WE ARE ON THE THRESHOLD OF NEW DECISIONS - ZURAB GUMBERIDZE

 

Caspian Energy (CE): How would you evaluate Azerbaijani-Georgian relations from the point of your 12-year experience of work in Azerbaijan as an ambassador?

Dr. Zurab Gumberidze, former Ambassador Extraordinary and Plenipotentiary of Georgia to Azerbaijan: The period of formation of Azerbaijani-Georgian relations was very important and interesting, and, certainly, not very easy for both the countries that just began their way as independent states both in economical and political respect. Consequently, we always were partners in this process, and we achieved good results both individually and together.

Our relations in political, economical and cultural spheres were always intensive and keep on expanding and strengthening.

Our countries signed a Convention of Strategic Partnership and called each other ‘strategic partners', but even such estimation today is acquiring a new meaning and ‘weight'. It is well-known that over this period of time our governments gained strong political power and the state system in our countries strengthened as well. We passed a complicated road of establishment and achieving internal stability, a level when we feel proud to say we formed the structures and entities required for an independent state in an international meaning of these words.

Having jointly passed this way, we managed to build very close economic ties between Georgia and Azerbaijan. These ties, accounting for projects to have been implemented over the last decade, are displaying, firstly, huge aspiration for results; secondly, their significance; and thirdly, great support of Azerbaijan and Georgia's nations for these projects.

We first began with an idea of transportation corridor to be the main link for reflecting the possibility of implementing major international projects between our nations. That was the TRACECA Project.

At the same time we implemented Baku-Supsa Western Route oil pipeline. Georgia is concerned about restoring historical truths: in the late XIX-early XX century  the oil was transferred via Georgia to world markets, and it was namely Azerbaijani oil. Alongside, over a short period of time we implemented new global projects, such as Heydar Aliyev Baku-Tbilisi-Ceyhan (BTC) oil pipeline and Baku-Tbilisi-Erzurum gas pipeline. Azerbaijan as the oil owner and national leader of the country Heydar Aliyev played a big role in these projects. Georgia, Turkey and all our friends that made their contribution to these projects were providing support to the initiative of Azerbaijan.

Today we are on the threshold of new decisions, ad I think they will also be very important and bring serious political and economical dividends to our countries in the outlook.

 

CE: What are the perspectives opening to Azerbaijan and Georgia by signing document under Baku-Tbilisi-Kars Railway Project?

Dr. Zurab Gumberidze: This project shall and will be implemented. It has already commenced. We are sure this year the railroad construction will begin. Step-by-step this project will be completed. I am sure the project will bring economic profits to Georgia and other participants of the project, and I think it is a serious project that will increase cargo flow through our corridor.

We are already working with the countries to be the direct users of the railway: European and Asian countries alike, they will find an advantage in new railroad that runs cargoes to Europe.

 

CE: Are you suggesting any special benefits for users of the corridor?

Dr. Zurab Gumberidze: I think it is too early to say. Special benefits will depend on amount of cargoes, a final outcome of the project. The project is quite sophisticated as the route runs in mountainous area and this calls for certain efforts and expenses.

Concerning the special benefits, I suggest this will depend on types of cargoes and goods that could be run through this corridor; depending on the necessity, certain advantages or benefits might be established.

CE: Are you performing any diplomatic work on launching Baku-Supsa oil pipeline shutdown from September 2006?

Dr. Zurab Gumberidze: This issue really concerns Georgia. We are awaiting the official response from project operator on the decision. There are some issues being discussed today. One of them is oil pipeline section installed in 1960s in Georgia: in its time it was not replaced and now shall be either rehabilitated or protected from exposure which will depend on operator's decision.

We are very concerned about this issue as we know the project participants are interested in operation of Baku-Supsa as an economically effective project. The decision made will influence the shutdown time, i.e. it is possible to resume operations in a shorter time, but replacement of pipeline sections will take longer.

The point is that a 1.5km long section of the pipeline is in a landslide area. The talks on this issue are held not at diplomatic level but among concerned parties.

 

CE: Is Georgia intending to diversify gas imports?

Dr. Zurab Gumberidze: Georgia always stated its priorities in respect to Shah Deniz project. And this priority is to increase Azerbaijan's role as Georgia's gas supplier as much as possible. Today we are committed to this point of view. We have already concluded some good contracts, but they do not supply Georgia's demand in full. This is due to Georgia's economic growth, which is very successful process. Consequently, we hold and will be holding talks with gas sales operator to obtain additional gas, which requires a new contract.

The gas exports under Phase 1 Shah Deniz Project are growing up. Accordingly, in the next phase we will proceed with talks with project operator and, probably, with Turkey on acquiring additional amounts of gas for Georgia.

We have already come to the agreement to redistribute Turkey's share between Azerbaijan and Georgia.

In general, each country must diversify its import flows of energy resources. Taking into account that we received gas from Iran via Azerbaijan, now we have only two real sources of gas supply: the Russian Federation and Azerbaijan.

Our policy is quite simple - to have stable supplies, thus boosting economy and avoiding problems in social sphere. On the other hand, for we are a transit country for Russia, we shall keep the Northern pipeline operable, and we always have some companies owing property in Georgia that would probably prefer to buy some gas from Russia. Therefore, in this case Georgia will benefit from operation of both the pipelines. On the other hand, Georgia has actual and promising contacts namely with Azerbaijan and we expect gas quantity increase through the projects implemented in Azerbaijan.

 

CE: What are the perspectives for Caspian oil supplies to Europe via Odessa-Brodi pipeline? Which steps are taken in this respect?

Dr. Zurab Gumberidze: Poland suggested holding a meeting at the level of heads of Azerbaijan, Georgia, Poland, Ukraine and Kazakhstan. We have an offer and in case such meeting takes place it will be very important to make a decision and involve experts to identify economic base for possible implementation of this project.

As a transit country, Georgia is ready to support such projects and contribute to them. We are ready and we are supporting such initiatives and meetings, and we are interested in their outcomes.

 

CE: Could you provide details on trade turnover between Azerbaijan and Georgia?

Dr. Zurab Gumberidze: Our turnover exceeded $400 million. Although petroleum products are plenty in this turnover due to high energy prices, we observe growth in other fields as well. New export-oriented production emerges in turnover structure. This is a positive issue and displays the mutual interest between the two countries and the growth of their economy alike.

 

CE: How could you explain the interest Azerbaijani and Kazakh companies display in Georgia's port infrastructure?

Dr. Zurab Gumberidze: I regard Azerbaijani companies' entering Georgian market quite positively. Moreover, I would like to stress that the year 2006 was quite important in view of mutual Azerbaijani-Georgian relations. The reason is that Azerbaijan has already seen itself a strong financial country, while receiving serious dividends from the project we were talking of above, and so Azerbaijan is seeking the ways to apply these funds.

And Kulevi, one of new construction sites to be shortly completed by Azerbaijan's State Oil Company, will strengthen Georgia's transit potential.

Kazakhstan's investors, in particular KazMunayGaz NC JSC, are also interested in such projects. As you know, Kazakhstan is one of the richest countries in the Caspian region and it is able to employ all available options of crude oil transportation: existing pipelines and railroad infrastructure.

Privatization process in Georgia enables any investor to access the market as openly as possible. We have been already observing positive outcomes of this work as energy-rich countries and companies possess property in Georgia, so they might be concerned in additional use of Georgia as a transit country.

Regarding infrastructure, such as oil refinery, both KMG and SOCAR are eager to perform relevant work. I think in terms of certain amounts, if erecting middle-size state-of-the-art ORPs, both Azerbaijan and Kazakhstan, as oil producers, can implement projects of the kind in Georgia, especially since the Black Sea is an open water body and it would be profitable and not very hard to sell petroleum products there.

 

Thank you for the interview.