December 29, 2004
(Balkanalysis.com Research Service)- Top representatives of Macedonia, Bulgaria and Albania met on Tuesday in Sofia to ink a memorandum of understanding with Ted Ferguson, president of the AMBO (Albania-Macedonia-Bulgaria Oil) pipeline project. The American-based corporation has been struggling since 1994 to get the attention of key political and industrial backers, in order to begin construction.
The first obstacle was the preoccupation of relevant parties during the Clinton Administration with the massive Baku-Tbilisi-Ceyhan pipeline in Anatolia. Then came the wars in Kosovo and Macedonia in 1999 and 2001, which left investors jittery. Now that the situation seems to have stabilized, however, the future looks bright for AMBO.
This week’s gala event in Sofia brought together the major leaders of the countries involved: the Macedonian, Bulgarian and Albanian Prime Ministers, Vlado Buckovski, Simeon Saxe-Coburg-Gotha and Fatos Nano respectively. On Monday they signed a political declaration confirming their countries’ support for the pipeline. At the same time, reports the Macedonian Information Agency (MIA), Macedonian Minister of Economy Fatmir Besimi, Bulgarian Minister of Regional Development and Public Works Valentin Cerovski, Albanian Minister of Industry and Energy Viktor Doda and AMBO’s Ferguson signed a memorandum of understanding.
“…The construction of [the] AMBO oil pipeline is of strategic interest for Macedonia, the region and beyond, while the project is concrete proof that the climate of solidarity and understanding exists in this region, and I believe that it will improve the citizens’ living,” declared Buckovski. For his part, Nano called the project “…an excellent example for partnership” as well as “more than exchange of material energy.”
But is the signing merely symbolic? After all, a rival pipeline that looked good to go until recently – the Burgas-Alexandropolis deal between Russia, Bulgaria and Greece – appears to have stalled due to internal disagreements. However, AMBO president Ted Ferguson (erroneously named as “Pat” by the BBC) claims that his project has received $900 million of investor funds “…from the Overseas Private Investment Corporation (OPIC) – a US development agency – the Eximbank and Credit Suisse First Boston, among others.” A big mystery until now had been whether the AMBO project actually had any solid backers. While the cash now appears to be there, an announcement has yet to be made regarding the committing parties among the oil industry.
The construction of the pipeline should take three or four years and when finished will transport 750,000 barrels of oil per day. According to the Sofia News Agency, some 25 percent of the oil to be used has already been supplied.
As could be expected, the Greek government is pushing for the Burgas-Alexandropolis alternative, citing its relative cost-effectiveness and time-saving qualities. However, as backers of AMBO have long pointed out, the Greek project does not really take care of the prevailing environmental concern (that is, avoiding the congested Bosporus shipping lanes), as it merely transfers the problem to the island-congested Aegean. An oil spill in the Aegean would be devastating for Greece’s vital tourism industry.
The AMBO project, on the other hand, avoids the sea entirely, crossing the Balkan Peninsula overland and terminating at the Adriatic port of Vlore.