US embassy cable - 05ANKARA6294

UNCLAS ANKARA 006294 
 
SIPDIS 
 
USDOC FOR 4212/ITA/MAC/CPD/CRUSNAK 
DOE FOR CHARLES WASHINGTON 
 
SENSITIVE 
 
EUR ALSO FOR DAS BRYZA 
 
E.O. 12958: N/A 
TAGS: ENRG, PHUM, EINV, TU, GG, BTC 
SUBJECT:  TURKEY AND BTC: PROGRESS AND PROBLEMS IN THE EAST 
 
REF: ANKARA 5533 
 
Sensitive But Unclassified.  Please Handle Accordingly. 
 
1.  (SBU)  Summary.  As oil creeps through BTC toward the 
Turkish border, Turkish officials privately expect that a 
"first oil" ceremony will not be held in Ceyhan until March 
2006.  Meanwhile, a UK official looking at allegations of 
human rights abuses by BTC in Turkish villages, was 
generally -- but not entirely -- pleased by what he saw, and 
a first meeting under the BTC Security Protocol was finally 
held in Ankara.  Especially compared to the scope of BTC, 
these relatively minor criticisms do not detract from the 
success of the multi-country, $4 billion BTC project.  End 
Summary. 
 
2.  (SBU)  FIRST OIL IN CEYHAN: While not yet changing the 
official target of December for BTC first oil inauguration 
at Ceyhan (ref), Turkish officials are privately admitting 
that "real" first oil may not arrive in 2005.  If that is 
the case, they may decide to target better weather in Ceyhan 
for a high-level opening ceremony in March 2006.   A staffer 
that accompanied President Sezer to the October 12 
celebration in Tblisi made this assessment to EconOff. 
Timing for first oil to the Turkish border with Georgia is 
still unclear (ref), with BP still hoping for end-October at 
the Turkish border and end-December at Ceyhan. 
 
3.  (SBU) BTC SECURITY PROTOCOL:  The three-country BTC 
Joint Security Commission met for the first time October 14 
in Ankara.  MFA told Econoff there were positive and frank 
discussions and information sharing on threat assessment and 
cross-border cooperation.  The countries agreed to meet 
again early in first half 2006 in Baku. 
 
4.  (SBU) HUMAN RIGHTS CLAIMS: Preliminary reaction: The UK 
contact point for OECD Guidelines for Multi-National 
Enterprises (the OECD complaint process) described 
allegations of human rights abuses promulgated by the London- 
based Kurdish Human Rights project, allegedly affecting 
Kurdish villagers around Ardahan on Lot A (Reftel).  After a 
visit to the region, the UK official reported that he was 
impressed with the robust and transparent complaint process 
and extensive community investment program.  However, he 
concluded that there was evidence of differences in social 
and community investment in Kurdish (and Alevi) and non- 
Kurdish villages that was exacerbated by a heavy-handed "big 
brother" approach by local authorities and BOTAS.   While 
such problems may not be systematic and frequent, they were 
troubling.  He will share his final report with EconOff and 
project participants. 
 
5.  (SBU) COMMENT: Slippage in completion of this complex 
three-country BTC project won't diminish its success and 
importance.  The State Inspection Board at the Presidency 
has initiated a study of alleged mismanagement of sub- 
contracts under BOTAS' prime contract for BTC in Turkey, 
allegedly contributing to construction delays and over-runs. 
While corruption is rampant in energy tenders in Turkey, BTC 
has not been significantly implicated in on-going corruption 
probes.  The inspection report is more likely aimed at 
establishing the GOT position for the inevitable difficult 
negotiations with the BTC consortium over commercial 
responsibility for construction delays and over-runs.  Some 
local complaints about slow or inadequate compensation may 
have validity, but do not detract from the overall success 
of the project, and have not held up construction. 
MCELDOWNEY