Azeri Oil Rail Exports Hit by Georgian Bridge Blast

By Eduard Gismatullin and Stephen Bierman

Aug. 18 (Bloomberg) -- BP Plc, Azerbaijan's national oil company and other exporters halted rail transport of crude through Georgia to the Black Sea after a bridge was blown up two days ago.

Russian troops attacked a railway bridge near the Georgian village of Grakali on Aug. 16, paralyzing the country's train system, according to Interior Minister Shota Upiashvili. Russia General Staff Deputy Chief Anatoly Nogovitsyn denied his military was involved in the incident.

``The bridge is still not operating,'' Garsevan Jorbenadze, a shipping agent at TeRo Co. Ltd. in Batumi, a Georgian port, said by phone today. ``It will take about a week to repair it.''

BP and partners have also shut two main pipelines for Azeri crude because of security concerns amid an armed conflict between Russian and Georgia and after a fire damaged the Turkish stretch of a 1 million barrel-a-day link. Russia started withdrawing its troops from Georgia today, a Defense Ministry official said, after President Dmitry Medvedev yesterday announced the pullout.

The Black Sea port of Batumi has enough stockpiles to load tankers for the next five days, Jorbenadze said. The ports of Supsa and Poti don't have any tankers scheduled for loading, while Kulevi is loading fuel oil in a tanker, he said.

``We are looking at other potential diversions, but at the moment that route isn't available,'' Robert Wine, a London-based spokesman at BP, said by phone today. Oil is now only being transported from Azerbaijan through the Baku-Novorossiysk link to the Russian Black Sea coast, which has a capacity of more than 100,000 barrels a day, according to Wine.

Reduced Rate

State Oil Company of Azerbaijan, or Socar, said an alternative bridge would be ready for use tomorrow, allowing for rail deliveries at a reduced rate. Socar usually sends between 20,000 and 30,000 tons of oil and crude products a day across Georgia, said company Vice President Vadik Aliyev.

BP, StatoilHydro ASA and partners had to reduce production at oil fields in the Azeri part of the Caspian Sea after flows were halted through BTC. The 1,768-kilometer (1,100-mile) link connects Azerbaijan with the Turkish port of Ceyhan via Georgia.

Turkey expects the Baku-Tbilisi-Ceyhan oil pipeline to open in ``a few days'' after repairs are complete, Energy Minister Hilmi Guler said today. An assessment of damage where a fire broke out on Aug. 5 revealed no evidence of sabotage, Guler told reporters in Turkey's capital Ankara today.

Another pipeline, which passes through Georgia to the Black Sea port of Supsa, remains closed because of security concerns, Tamam Bayatly, a BP spokeswoman in Baku, said today by phone. BP isn't aware of any damage to its pipelines in Georgia, Bayatly said today.

Shippers declared force majeure on exports from the Supsa and Ceyhan ports, a legal clause that exempts them from meeting contracts because of circumstances beyond their control.

To contact the reporters for this story: Stephen Bierman in Moscow at Sbierman1@bloomberg.net;