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AMBO Pipeline Moves Forward: Interview with Gligor Tashkovich

January 9, 2005


In this exclusive interview with Gligor Tashkovich, the Executive Vice President for Government & Media Relations for the AMBO (Albania-Macedonia-Bulgaria Oil) pipeline project, readers are treated to the inside story on the pipeline’s progress from one of the project’s leaders. Mr. Tashkovich, contacted last week soon after the Sofia summit on AMBO, shares the following insights with director Christopher Deliso.

Christopher Deliso: First of all, congratulations. You have been working on this for a long time, since 1994, and it must feel great to finally be getting official agreement on the AMBO project.

Gligor Tashkovich: Thanks. Well, it certainly isn’t the first agreement.  There was the initiative signed in July 2003 by the three presidents [Alfred Moisiou of Albania, Gjorgi Parvanov of Bulgaria, and the late Boris Trajkovski], for example, and there are several others.

CD: Yes, but can you tell us what is the precise significance of this current signing? Is it simply an agreement towards a common initiative, or does it hold any leaders or countries responsible for anything, establish a time line, etc?

GT: There were two trilateral signings that took place, one at the Prime Ministerial level and one at the Ministerial level.  The collective significance was that AMBO moved into the FEED stage with these signed agreements. FEED is an acronym for Front-End Engineering and Design. Typically once you enter the FEED stage, the project will be built – a 95 percent-plus likelihood. The signed agreements also trigger commitments from some of the larger interested vendors to join our efforts.

CD: Can you name any of these interested parties?

GT: No, I can’t name them at this time – sorry.  Check back in 4-8 weeks.

CD: Looking back over the past year, can you say if there were any individuals, either from  the US side or from the Balkan governments who really made a difference in getting things moving?

GT: Yes, Dr. Peter Watson, President of OPIC has been a  terrific cheerleader for us within the Bush Administration. Also Albanian Prime Minister Nano, former Macedonian Minister of Economy Boris Rikalovski, and several high-level  people in the Bulgarian government.

CD: Along the same lines, was there any particular “breakthrough” point, action  or decision  that you can point out as having been vital for things to get to where they are today?

GT: Yes, the public withdrawal of support for the Bourgas-Alexandroupolis [pipeline project] by both the President of Transneft (the Russian oil pipeline operator) Simeon Vainshtok and LUKoil Vice President Leonid Fedun.   There was another breakthrough point too, but I will be able to speak on that at a future time.

CD: We all know that Balkan governments change with the weather. Have you sought any specific institutional safeguards, either from them, the EU or other bodies to make sure that the project goes ahead efficiently no matter who or what parties are in power over the next 2 years?

GT: All three governments are party to the Energy Charter Treaty  which regulates the construction of oil pipelines across national and supra-national territories. We also have multiple agreements from each county over the past 11 years – so no matter which party comes to power in which country, a previous government affiliated with Party X has already given support for the project.

CD: What is the current state of play with Burgas-Alexandroupolis? They can’t be overjoyed to see you surge ahead.

GT: All I can tell you is that the Russians withdrew their support.  The Greeks keep acting like nothing is happening – but all of their lobbying efforts are falling on deaf ears.  The Greek media continue to illustrate one side of the story, and the Greek Government Ministers keep putting up a brave face. Bourgas-Alexandroupolis was always a reactive project to AMBO.  Therefore, we must always set the pace.

CD: Bulgaria is EU-bound and stable. Albania is poor and somewhat chaotic, but has no enemies either. Macedonia on the other hand is in danger from Kosovo Albanians who wish to break the country apart. In this light, how will the pipeline project be affected if unrest in Kosovo continues to seep across the border – especially in 2005, the year when “final status” is supposed to be negotiated in the increasingly volatile province?

GT: I predict that the 2005 deadline you cite will slide based on what I have been reading over the last several months. The most important thing to keep in mind is that oil companies work in considerably more unstable parts of the world than the Balkans. The Balkans are reasonably peaceful in comparison.  So it is a matter of relativity.

CD: Have you sought any specific guarantees regarding Macedonia’s stability? If so, who or what will vouch for the country? Will US policy change if mischief-makers start causing trouble in a pipelined Macedonia?

GT: You could make the case, somewhat easily I suspect,  that America will care what happens to Macedonia if an oil pipeline carrying oil supplying America runs through it.  Gosh knows there has been plenty of commentary on the web about the intersection of oil and international politics in general.

CD: What view do international pipeline insurers take about working in this part of the world? Do they have reservations? What is the cost comparison compared with other European regions?

GT: You can probably go to the websites of the Overseas Private Investment Corporation (OPIC) and the Multilateral Investment Guarantee Agency (MIGA) and look up this information. I don’t have it handy, sorry.  These entities (and also the U.S. Export-Import Bank) have what are called County Limitation Schedules that discuss the level of coverage, if any, that they have for certain countries or certain types, i.e., public or private projects within countries.

CD: The BBC cited AMBO President Ted Ferguson as saying some $900 million has already been guaranteed for financing. Is this correct, and is there a higher target goal to be reached? Can you give more details?

GT: This is debt financing.  We have also raised some equity and we need to raise more. The debt-equity ratio is approximately 75 percent/ 25 percent.  The year 2000 construction estimate for the pipeline was $1.13 billion within a margin of error of -10 percent and +20 percent.

CD: I know you have said many times in the past that all the major oil companies are potential players. But now that the initial inter-governmental signing is done, you have some cash and are talking about completing the pipeline in the foreseeable future, do you have any updates on prospective oil companies to work with?

GT: Nope, sorry!   You are a subscriber to the AMBO News Service.  You know which companies are exporting oil from the Caspian region into the Black Sea.  Ask them.  We will put out a press release when we have news that we can share on this.  I can’t tell you when that will occur – except to say that I expect it to be in 2005
– and hopefully sooner rather than later.

CD: Finally, on the environment. I know the point of AMBO is partially to avoid the environmental dangers of the Bosporus, and that your pipeline construction and valve structure makes leaks rare and, even if occurring, localized. Nevertheless have you run into any opposition from local environmentalists, the way BTC was hampered by people in Georgia over Borjomi? And has the re-planned route caused any more concerns?

GT:No – no objections of any kind.  And if you should be in touch with any local environmentalists, please tell them that we would like to engage them sooner rather than later in a constructive conversation where we can address any fears they have up front and be confident of our pledges concerning the environment.  The Macedonian government did change the route to move it away from Lake Ohrid.  A Microsoft Powerpoint map shows the before/after changes between the two routes.

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