Office of the Press Secretary
For Immediate Release November 17, 1999
Background on U.S. Caspian Energy Policy
Caspian energy policy: The Clinton Administration has actively
supported the development of oil and gas resources of the Caspian Basin
since 1994, when the U.S. Government established a special inter-agency
working group to focus on the President's Caspian energy policy. This
working group ensures incorporation of commercial, technical,
diplomatic, and other perspectives in forming U.S. policy on Caspian
Starting in 1995, the United States has specifically advocated the
establishment of multiple energy export pipelines, traveling along an
"east-west" axis from the Caspian region. This policy is intended to:
underscore our commitment to the sovereignty and independence of
the new states of the Caspian region and enhance their economic
improve the energy security of the U.S., Turkey, and other allies
by ensuring the free flow of Caspian energy to the world market, without
interference from Iran or dependence on any single route;
enhance commercial opportunities for U.S. and other companies;
create incentives to resolve regional conflicts by re-establishing
economic linkages among the new Caspian states; and
promote and protect the environmental safety of the Bosporus
Milestones: The Clinton Administration's multiple pipelines policy has
achieved the following milestones:
In 1995, international energy companies decided to build two "early
oil" pipelines from Azerbaijan, a northern line to Novorossisysk in
Russia and a western line to Supsa, on the Black Sea coast of Georgia.
The western line opened in April 1999 and is operating at its capacity
of 115,000 barrels per day. The northern line opened in November 1997,
with a capacity of 130,000 barrels per day, although it has since been
periodically out of service due to the instability in Dagestan and
In 1996, Vice President Gore reached agreement with Russian Prime
Minister Chernomyrdin that broke a longstanding logjam barring
construction of the Caspian Pipeline Consortium line, which is to run
from northwestern Kazakhstan to the Black Sea port of Novorossisysk
across southern Russia. Construction of the CPC line is now underway,
and the project is already bringing far-reaching benefits to Russia and
Kazakhstan in terms of expanded employment, manufacturing, and
governmental revenues. The line will principally serve the
Tengizchevroil project and is expected to be operational in 2001.
In May 1998, the U.S. Trade and Development Agency, the U.S.
Export-Import Bank, and the Overseas Private Investment Corporation
announce the establishment of the Caspian Finance Center, in Ankara.
The Center's mission is to facilitate the development energy and other
infrastructure projects in the Caspian region by combining the forces of
the U.S. Government's three export credit agencies.
In July 1998, the President appointed Ambassador Richard
Morningstar to the new position of Special Advisor to the President and
the Secretary of State for Caspian Basin Energy Diplomacy. In July
1999, Ambassador Morningstar was succeeded by Ambassador John Wolf.
In October 1998, the Presidents of Turkey, Georgia, Azerbaijan,
Kazakhstan, and Uzbekistan signed the Ankara Declaration, in which the
countries for the first time formally expressed support for the
Baku-Ceyhan main export pipeline and announced the intention to initiate
an intensive dialogue with energy producers across the Caspian region.
In February 1999, the Government of Turkmenistan selected PSG Inc.
as the lead sponsor to develop the Trans-Caspian Gas Pipeline. In
August 1999, PSG and Royal Dutch Shell concluded a memorandum of
understanding in which they formed a partnership to develop the
Trans-Caspian Gas Pipeline.