Resources: BTC Pipeline, Caspian Region

After the BTC Consortium, led by BP, formally asked the UK's export credit agency, ECGD, for financial support for its BTC oil pipeline project, ECGD's Business Principles Unit (BPU) assessed the potential environmental and social impacts of the project. The BPU's findings and recommendations were critical to ECGD's issuing significant financial guarantees for the project in February 2004.

When The Corner House put in an information request for a copy of the BPU's report, it was refused. Only after appeals and counter appeals was the information finally released in August 2009.

This article summarises the main issues arising from the BTC oil pipeline runing from Baku in Azerbaijan, through Tbilisi in Georgia to a new marine terminal at Ceyhan on Turkey’s Mediterranean coast that has been developed by a consortium of companies led by the British oil multinational BP. These include the project agreements between the consortium and the three countries; safety concerns; and concerns over due diligence and monitoring.

The legal agreement signed by Turkey with the company building the BTC pipeline breaches the country's legal obligations to the EU aimed at it becoming an EU member. The European Court ruled in March 2006, however, that EU's decisions (and lack of decisions) on accession issues are a matter of discretion and internal concern alone, and cannot therefore be challenged through the courts.

The Common Terms Agreement, signed between the public sector lenders to the BTC oil pipeline project and the BP-led consortium building it, includes the environmental and social conditions to which the consortium agreed to adhere.

In February 2004, the Sunday Times newspaper published an article by Michael Gillard, detailing reports that the coating selected to seal the joints of the BTC oil pipeline before it was buried was "utterly inappropriate" and could cause the pipeline to leak. This expanded article provides more detail.

The "divide and rule" corporate public relations strategy for dealing with NGOs raising issues about the BTC oil pipeline is made explicit in this presentation on the project's Environmental & Social Impact Assessment, released under FOIA.

A February 2004 Sunday Times article alleged that BP knew about safety faults with its anti-corrosion sealant coating for its Caspian oil pipeline, but did not disclose them when trying to secure funding from publicly-funded export credit agencies and multilateral development banks. A UK government minister and officials from the UK's export credit agency gave public assurances that the coating had been used extensively elsewhere on similar pipelines, but subsequently-released documents indicate that it had not.