US companies such as Chevron and Exxon Mobil are most likely going to acquire shares of the Burgas-Alexandroupolis oil pipeline, Plamen Rusev, Director of the Bulgarian branch of the Trans-Balkan Pipeline company, told Novinite.com (Sofia News Agency).

In an exclusive interview for Novinite.com, Rusev has stated that American oil interests active in the Caspian and Black Sea region are watrching closely the situation with the construction of the Burgas-Alexandroupolis oil pipeline, a joint project of Bulgaria, Greece, and Russia to transit Caspian oil bypassing the Turkish Black Sea straits.

The Trans-Balkan Pipeline company was set up in February 2008 by the governments of the three partner states in order to oversee the Burgas-Alexandroupolis pipeline construction and to operate the pipe once it is completed, and is registered in the Netherlands.

In mid June 2010, the Bulgarian government and Prime Minister Boyko Borisov suggested strongly the country might not proceed with the project due to environmental concerns. The Bulgarian government's decision is formally pending on the environmental assessment of the pipeline expected in Ferbruary 2011.

“Americans are rich people. Rich people only buy fully furnished homes. It is more expensive but this is what they prefer. Poor people buy greenfield apartments. So don’t be surprised – once the Burgas-Alexandroupolis oil pipeline starts running – when you see American companies acquire shares in it. They will buy shares – either from Bulgaria, or from Greece, or from Russia. They are carefully observing the project, and are awaiting its completion and start of operation. They will pay more but they won’t leave it outside of their control because it is their oil that will be running through it. This is the truth,” declared Rusev, the head of the Bulgarian branch of TBB.

“As much as our Russian colleagues might not be happy with this, there will probably be participation on part of these American companies in the future,” he said while explaining that potential Russian “unhappiness” would result from the fact that there will be a larger number of partners to deal with if shares are sold.

Rusev believes that the fact that the Burgas-Alexandroupolis pipeline project has been met with much negativity in Bulgaria precisely over concerns have to do with the fact that it might increase Russian influence. In his words, a potential construction of the competing but now dormant Burgas-Vlore (or AMBO) pipeline, which is basically the same in its start point, might not draw so much negative reaction in Bulgaria precisely because it has been put forth by American companies.

“People in Bulgaria should be rational and should understand that in our case the term “Russian project” is not meaningful. This is a joint project of three countries, two of which are EU member states. About 70% of the oil to be transited through it will go to the EU, 20%-30% to the USA, and a very small percentage to other markets. There is just no logic in such criticism. Perhaps one of the reasons for that is that there is a lot of uproar over the fact that one of the projects is Russian, and the other is American but I think that people will see that the Burgas-Alexanroupolis pipeline is a good and feasible project and they will accept it much more easily once it is completed,” Rusev told Novinite.com.

He is convinced that the progress in the increased dynamic in the recent months on the construction of the Samsun-Ceyhan oil pipeline, a competitor to Burgas-Alexandroupolis, has to do precisely with the fact that the Bulgarian authorities have been dragging their feel.

The Bulgarian TBB manager has expressed his expectations for positive development of the project on part of Bulgaria thanks to the fact that in February 2010 the Borisov government decided to place the Burgas-Alexandroupolis project under the responsibilities of one single institution, the Finance Ministry.

Rusev has sought to assuage all kinds of criticism of the pipe, including by explaining that the technology selected for the constructed of the project, i.e. unloading the Russian and Kazakhstan oil at a so called monobuoy terminal located 18 km into the sea and away from the Bulgarian Black Sea city of Burgas, is the safest possible.

Much of the fierce criticism of Burgas-Alexandroupolis – including on part of the Mayor of Burgas Dimitar Nikolov and local NGOs – has had to do with fears that a potential oil spill in the Gulf of Burgas could destroy the local environment and tourism industry.

With respective to the third line of criticism of the pipe – the fact that it is economically unfeasible – the TBB Bulgarian manager has declared that there is plenty of Russian and Kazak oil to be transited through Burgas. He made it clear the final total amount of the annual transit fee for Bulgaria – informally set at at least USD 35 M – is yet to be decided upon – but pointed out that this direct fee to be paid to the Bulgarian government roughly equaled the BGN 80 M that Bulgaria got as combined taxes paid by its banks in 2009.

Rusev says that if Bulgaria decides to pull out of the Burgas-Alexandroupolis pipeline, thus practically killing the project, it might suffer not just an image detriment for renouncing an international agreement but will probably have to pay at least EUR 70 M spent so far on surveys for the construction, and perhaps as much as EUR 200 M as compensation to the other parties.

“But all this is just a conjecture, I hope that this won’t happen in the very least because there are no good reason for Bulgaria to give up the Burgas-Alexandroupolis oil pipeline,” he concluded.

According to latest information announced end of last week, the internationally sanctioned environmental assessment of the Burgas-Alexandroupolis project will be completed in February 2011. This is when the Bulgarian government is expected to make its final decision on whether to go ahead with the project of not.

The Burgas-Alexandroupolis oil pipeline has been cricitized on environmental, economic, and geopolitical grounds. In June 2010, the TBB launched a special website presenting visually the plans for its construction in order to fend off criticism on environmental grounds; it can be viewed HERE (in Bulgarian.)

Full text of the interview of TBB Bulgarian manager Plamen Rusev on the Burgas-Alexandroupolis oil pipeline READ HERE

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