ISTANBUL, Turkey (AP) -- In a policy victory for the Clinton administration, Turkey, Azerbaijan and Georgia Thursday signed a deal to build a pipeline that would send the oil riches of the Caspian Sea to international markets without going through Russia or Iran.
President Clinton looked on as the leaders from the three nations signed a series of accords to build a pipeline from the rich oil fields of Azerbaijan to Turkey's Mediterranean port of Ceyhan.The oil pipeline, which is expected to cost $2.4 billion, would cross through the former Soviet Republic of Georgia to Turkey.
Georgian President Eduard Shevardnadze said the accord heralded new cooperation between "reliable partners" in the Caspian region, and he urged photographers to "keep and treasure" their pictures of the historic signing ceremony for they will "really become unique and cost very much."
Russia has been a chief competitor for the proposed deal and had been trying to persuade Azerbaijan to agree to a pipeline through Russia. Iran had favored an oil swap deal in which Azerbaijani oil would be sold in northern Iran and oil from fields in southern Iran would be sold on Azerbaijan's behalf.
Earlier, Sandy Berger, Clinton's national security adviser, denied that the United States is supporting the pipeline because it objects to Russia's stand in Chechnya.
"This (the pipeline) is not directed against Russia in any way," Berger said. "I think not only the United States but, more importantly, the countries in the region and the international oil companies have believed that it's important" to create other routes for transporting oil.
The signing comes at the sidelines of a summit of the Organization for Security and Cooperation in Europe, where Clinton joined OSCE member nations in criticizing Russia for its brutal fight against Chechen rebels.
The 1,080-mile line would bypass an unstable Russia and a potentially hostile Iran, moving much of the oil through Turkey, a key U.S. ally that has suffered since U.N. sanctions closed a lucrative pipeline that brought Iraqi oil through Turkey.
Questions remain as to whether the deal is economically viable. Officials at BP-Amoco, the main Western oil firm working in Caspian oil fields, have said early estimates of massive oil reserves in the region may have been overstated.
Azerbaijan currently produces about 100,000 barrels of oil a day, roughly one-tenth of the 1 million barrels a day that would make the project viable, experts say. Israfil Mamedova, an official with Azerbaijan's state-run oil company, said he was optimistic that "as soon as investments are made, production will increase."
Many analysts expect the Russians, who controlled the Azerbaijani oil fields during the Soviet era, will feel excluded if the new pipeline does not move through their territory.
"They will undoubtedly perceive Baku-Ceyhan ... as part of a U.S. desire to exclude them from the Caucasus," said Bulent Aliriza of the Washington-based Center of Strategic and International Studies.
Another agreement will also be signed at the summit, revising the Conventional Armed Forces Treaty, which limits the deployment of heavy weapons in Europe.