RESIDENTS OF VILLAGE OF TSIKHISJVARI, BORZHOMI REGION, GEORGIA PROTEST
AGAINST CONSTRUCTION OF BTC OIL PIPELINE

YEREVAN, AUGUST 4. ARMINFO. Residents of the village of Tsikhisjvari,
Borzhomi region, Georgia, have blocked Bakuriani-Tapatskhuri road, as
a token of protest against construction of BTC oil pipeline, A-INFO
reports.

According to the source, the heavy lorries of British Petroleum have
considerably damaged part of the road, with majority of water
supplying pipes having been destroyed. As a result, the roads to the
village occurred to be flooded. Besides, BP lorries damaged the local
bridge. In their turn, talking to the residents, BP representatives
promised to restore the damaged road and the bridge.

From: Emil Lazarian | Ararat NewsPress

VICE SPEAKER OF ARMENIAN PARLIAMENT MEETS WITH SYRIAN ECONOMY AND
TRADE MINISTER

YEREVAN, AUGUST 4. ARMINFO. Vice Speaker of the Armenian Parliament
Tigran Torossyan and Syrian Economy and Trade Minister Hassan al Rifai
discussed today the deepening of business relations between Armenia
and Syria.

Torossyan said that Armenian-Syrian relations will stably develop
irrespective of the current developments in the region. He said that
economy and trade are very important spheres of cooperation for the
two countries. Torossyan said that Armenian-Syrian interparliamentary
cooperation is actively developing and expressed hope that numerous
Armenian-Syrian agreements will be implemented. The sides should also
cooperate in international organizations and Armenia can provide Syria
with support and expertise in the matter. Torossyan stressed the
importance of the Armenian-Syrian intergovernmental commission which
started its work in Yerevan Tuesday.

Al Rifai high appreciated Armenian-Syrian relations and said that the
work of the Armenian-Syrian intergovernmental commission will be
effective for both countries. He said that cooperation should be
developed by specific programs. Al Rifai said that Syria continues
economic reforms and has been observing steady economic growth in the
last three years. He presented the legal improvements that are most
beneficial for investing and economy development.

Present at the meeting were also Armenia’s Agriculture Minister and
the Armenian co-chairman of the above commission David Lokyan and the
two countries’ ambassadors.

CONSTRUCTION WORKS WORTH A TOTAL OF $1.2 MLN TO BE STARTED IN SYUNIK
REGION OF ARMENIA

YEREVAN, AUGUST 4. ARMINFO. At the beginning of 2005 the Fund of
social investments of Armenia will begin implementation of
construction works in Syunik region of the republic worth a total of
$1.2 mln. Head of State Town-Planning Inspection of Armenia Sevada
Hayrapetian informed ARMINFO.

According to him, the package of necessary documents will be ready in
the last quarter of the current year. This fund will be directed to
construction of schools, engineering networks and buildings in the
region, as well as to repair of houses of culture. Besides, this year
Armenian government has allocated 13.5 bln drams for construction of
schools and social-economic projects in different regions of the
republic. Ministry of Town-Planning of Armenia is the owner of works
worth a total of 1.5 bln drams in 24 establishments.

MODERNIZATION OF FOIL-ROLLING PLANT ARMENAL IN ARMENIA WILL BE
COMPLETED IN MIDDLE OF 2005

YEREVAN, AUGUST 6. ARMINFO. Modernization of the foil-rolling plant
Armenal in Armenia will be completed in the middle of 2005. The plant
belongs to the Russian Aluminum JSC, Minister for Trade and Economic
Development of Armenia Karen Chshmarityan said at a press-conference
today.

He said that modernization was initially planed to be completed within
11 months (by th end of November, 2004, as the minister said), but
then, the plant’s owner asked prolongation of the terms for 5-6
months. The minister said that in conformity with the specified data,
the cost of the investment program grew to $70 mln as against $34 mln
earlier announced by Rusal. Chshmarityan said that the increase in the
investment volume is connected with purchase of additional
equipment. He added that orders for $17 mln will be placed at
enterprises in Armenia and negotiations with them are currently in
process. The minister connected the protraction of the terms of the
investment program’s implementation with lack of an agreement between
the plant’s owner and the General Contractor, the German company
“Achenbach,” which won a tender for modernization of Armenal in
December.

It should be noted that Armenal’s output in 2003 totaled 21 bln drams
($37,1 mln), which is 3.1 times more than the indicator of the
previous year. The plant manufactured 10.5 thous tons of products in
the period under review, which is twice more than in 2002. Armenal has
been suspended since the end of December, 2003 for
modernization. Armenal CJSC was founded in May, 2000, on the basis of
Kanaker Aluminum plant (KanAZ) as a JV with participation of the
companies Russian Aluminum and “KanAZ” OJSC. Since Jan, 2003, 1003 of
Armenal’s shares belong to the Russian Aluminum JSC.

TWO-DIGIT GDP GROWTH WILL BE REGISTERED IN ARMENIA IN 2004

YEREVAN, AUGUST 6. ARMINFO. On the results of 2004 two-digit growth of
the economy in Armenia will be registered. Minister of trade and
Economic Development of Armenia Karen Chshmaritian made such a
forecast today.

According to him, there are all the preconditions for that, and during
the first half of 2004 the GDP of Armenia increased by 9.2%. The major
part of GDP is provided due to the real sector of the economy,. He
mentioned that trend of the growth of the share of industry was marked
int he structure of GDP. It should be noted it is planned to ensure 7%
GDP growth in 2004.

AGREEMENT FOR SELLING OF SHARES OF “FACTORY NAIRIT” cjsc TO RUSSIAN
HOLDING “VOLGABURMACH”TO BE SIGNED ON AUGUST 10

YEREVAN, AUGUST 6. ARMINFO. Agreement for selling of the 100% of the
shares of “Factory Nairit” cjsc to Russian holding “Volgaburmach”will
be signed till August 10 of the current year, Minister of trade and
Economic Development of Armenia Karen Chshmaritian informed
journalists today.

According to him, there are no financial and technical disagreements
between the sides. He mentioned that he had talked with Chairman of
the Central Bank of Armenia Tigran Sargsian on Thursday, who is
optimist in this aspect. The minister added that the Armenian side has
fulfilled all its obligations to the Russian side.

GOVERNMENTAL COMMISSION OF ARMENIA APPROVES 11 CHARITABLE PROGRAMS

YEREVAN, AUGUST 6. ARMINFO. Today the Governmental Commission of
Armenia on coordination of charitable programs discussed and approved
11 charitable programs.

The governmental press-service told ARMINFO that programs of the Fund
of Agricultural Development on planting greenery and repair of sport
halls of Yerevan school N191 were approved. The program of the
charitable fund “For Armenia”, Berlin Red Cross, providing for repair
of the boiler-house at the school N21 in Gyumri “Henzel-Gretel” was
approved. A program of the charitable and public orgnaization “Kamar”
“Assistant to Shirak region’s rehabilitation Center” was approved.
Besides, the orgnaization intends to implement a program “Direct
assistant and furniture for rural schools” in the village of Small
Sariar. A program of the Armenian office of the organization “Mission
East” “Contribution to children having difficulties with education”
was approved. A program of the Armenian Governmental Department for
Migration and Refugees financed by UNHCR in Armenia was approved, The
program provides for repair of Yerevan hostel No1. According to the
program of the Children Of Armenia Fund “Development of
infrastructures of the village of Karakert, Armavir region” provides
for repair of 2 schools, kindergartens, ambulatories and establishment
of computer center. Besides, organizational programs of the All
Armenian Fund Hayastan on orgnaization of a Pan Armenian Festival “A
Single Nation, A Single Culture” were approved.

Programs on import of cargoes addressed to various organizations were
approved. The commission also discussed a number of issues connected
with transactions under the programs approved earlier.

Thursday, August 05, 2004
*******************************
CRITICISM AND HATRED.
WHY IS ISRAEL PRO-TURKISH?
A REVERSAL OF ROLES.
THE PSYCHOLOGY OF NATIONS.
THE IRRELEVANCE OF LITERATURE.
*******************************************
The difference between being critical of American politics and being anti-American is that, Michael Moore’s FAHRENHEIT 9/11 is critical, whereas Muslim fanatics are anti-American.
*
Something similar could be said of anti-Armenianism and of being critical of Armenian politics. Movses Khorenatsi, Yeghishe, Raffi, Baronian, Odian, Zohrab, Zarian, Massikian, Shahnour and many others were critical of Armenian politics, but Sultan Abdulhamid II and Talaat were anti-Armenian.
*
Perhaps one reason the Israelis are pro-Turkish is that they would like to do to Palestinians what the Turks did to us. And I cannot help wondering what would have happened had the Ottoman Empire been an Armenian Empire and the Turks our “Armenians.” One guess: We would have done to them what we did to the Azeris in Karabagh (more or less), and having done so we would brag about it; and when asked to admit responsibility or guilt we would accuse our accusers of anti-Armenianism sure in the knowledge that we would have the support and understanding of all imperial powers who at one time or another had been in our position.
*
Like individuals, nations too have their psychological complexes. This is not a secret. Anyone in a leadership position knows this but it is to his advantage to exploit these complexes rather than to analyze them, if only because analyzing them may expose him as a wheeler-dealer whose number one concern is number one but who must pretend otherwise by parading as a selfless and humble servant of the nation.
*
Sartre is right. Literature solves nothing and helps no one. Our history is very clear on this point. Writing for Armenians is a waste of time. But I go on because Armenianism has been hijacked by rascals and standing by and saying nothing is as difficult as witnessing a gang rape and assuming a passive stance. So what if everything I have said so far doesn’t even amount to a whisper on a deserted street in the middle of the night?
#
Friday, August 06, 2004
********************************
DEFINING PROPAGANDA.
POWER STRUCTURES AND DISSIDENTS.
ARMENIAN HISTORY 101.
********************************************
One Way to define propaganda is to say that it is anything and everything that a power structure tells you.
*
If a common crook or a pathological liar tells you 2+2=4, believe it. But if a power structure tells you the same thing, believe it not.
*
To recycle propaganda means admitting two things at once: “I am a dupe,” and “I hate to think for myself.”
*
Power structures are not monolithic entities; rather, they have internal fissures and divisions with constantly shifting alliances. A smart Armenian who wants to survive in our environment must sooner or later associate himself with and be subservient to either a boss, bishop or benefactor, all of whom unite only against a common adversary, dissidents. That may explain why Armenian dissidents are an extinct species today.
*
The French beheaded their king, the Russians executed their czar, and the Italians hanged Mussolini. Our leaders have managed to survive because they brainwashed us to believe we owe our survival to them.
*
“When the blind lead the blind, both shall fall into the ditch,” the Bible tells us. Our history in a nutshell.
*
When the blind leads the blind and the inevitable happens, should we call that leading or misleading?
*
When the blind lead the blind and if both are Armenian, they will brag about their survival even as they lament over their shattered bones.
#
Saturday, August 07, 2004
*********************************
THE USES AND ABUSES OF PATRIOTISM.
DEFINING HOMELAND.
WHAT IS CULTURE?
MEMO TO A CRITIC.
**********************************************
Why is it that some Armenians are not emotionally and intellectually equipped to disagree without engaging in verbal abuse? And to think that more often than not they are the very same Armenians who reject the label “Ottomanized.” And then there are Armenians who think there is nothing wrong in hating a fellow Armenian or an entire class of them so long as it’s in the name of patriotism; and their definition of patriotism is so narrow that any other definition is dismissed as treason.
*
What is patriotism? Let’s see if we can define it or at least take a step in the right direction. If we say it is love of country (in the sense of homeland) then we shall have to define country: is it the real estate? — the mountains, lakes, rivers and valleys? Is it the Armenian people as a whole? Is it the present regime or the administration of justice? Is it the culture? Things, as you may begin to suspect, are not as simple as they may appear to be at first sight.
*
If by country we mean the land, then we must ask the question: In what way Armenian mud is different from Turkish mud?
If it is the people: Does that mean you are less of a patriot if you hate or disagree with even a single fellow Armenian?
If it is our culture: What is culture? Or, who is qualified to define it? – a politician (whose central concern is power), a priest? (whose business is saving souls), or a writer (whose aim is to understand reality by separating fact from propaganda)?
*
If, on the other hand, we adopt Goethe’s definition of homeland (“Wherever a man is allowed to work and provide for his family”) we may have to agree that Armenians of the Diaspora and Armenians in the Homeland who wish to emigrate (and I am told everyone except policemen and politicians does), Armenian patriotism might as well be an oxymoron.
*
It took me about three decades to figure out what’s what and who’s who in our environment. Instead of calling me names or identifying me as an enemy of the people, I suggest you give yourself a little more time before you jump to conclusions – unless of course you happen to be one of our dime-a-dozen geniuses or self-appointed experts on any given subject born with superior powers of observation and understanding. In which case you should get busy sermonizing and speechifying in an effort not only to convert skeptics like me but also to re-interpret the work of many of our ablest writers who at one time or another adopted a critical stance.
#

ASBAREZ ONLINE
TOP STORIES
08/06/2004
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1) ANCA Asks White House, Congress to Protest Azeri Talk of Armenia’s End
2) Representative Susan Davis Joins Caucus on Armenian Issues
3) Georgia, Russia Tiff over Abkhazia
4) Armenia Lashes out at Azeri Criticism of Karabagh
5) Khachadourians Grant One Million to KZV Armenian School
6) THE DEMOCRATIC CONVENTION IN REVIEW: Flip-Flop-Apalooza!

1) ANCA Asks White House, Congress to Protest Azeri Talk of Armenia’s End

WASHINGTON, DCIn letters sent to the White House and all Member of Congress on
Thursday, the Armenian National Committee Of America (ANCA) called for a
forceful, public protest of open threats by a senior Azerbaijani military
official against the continued existence of the Republic of Armenia. On August
5, Radio Free Europe/Radio Liberty (RFE/RL) reported that the chief spokesman
for Azerbaijan’s Defense Ministry, Colonel Ramiz Melikov, publicly stated that
“within the next 25-years there will exist no state of Armenia in the South
Caucasus.” He added: “Modern Armenia is built on historical Azerbaijani
lands…I think that in 25-30 years’ times its territory will again come under
Azerbaijan’s jurisdiction.” According to FRE/RL, Melikov made these remarks to
the Baku-based daily newspaper “Zerkalo.”
In its letters to members of Congress, the ANCA underlined the fact that
“these threats were not made by a professor, a columnist, or a private
Azerbaijani citizen. They were madeon the record in a major publicationby the
chief spokesperson for the Azerbaijani Ministry of Defense.”
Within the letter to the White House, ANCA Executive Director Aram Hamparian
noted that it would be a “grave error for our government to dismiss these
remarks as rhetoric, or to address them solely through diplomatic channels.
Rather, we expect our government to forcefully and publicly confront the
Azerbaijani government over these patently hateful and destabilizing threats.
Failure to do so would send extremely dangerous signals to Baku.”

For the full text of the RFE/RL report, visit:
<;http:
//

2) Representative Susan Davis Joins Caucus on Armenian Issues

SAN DIEGO–On August 5, Representative Susan Davis (D-CA 53rd) became the
newest member of the Congressional Caucus on Armenian Issues reported the
Armenian National Committee of America-Western Region (ANCA-WR).
Representative
Davis’s entrance into the Caucus boosts its membership to 132.
ANC San Diego Chapter chairperson Garo Artinian, and board member Robert
Deranian, along with ANCA-WR Executive Director Ardashes Kassakhian, had the
opportunity to meet with Rep. Davis’s Senior Community Relations
Representative, Caridad Sanchez, on July 23, in order to discuss issues
impacting the Armenian-American community. After the ANC delegation briefed
Sanchez about the organization’s local initiatives, Kassakhian presented a
letter formally inviting Rep. Davis to join the 34 other members of Congress
from California who are members of the Caucus.
“We welcome Representative Davis’s decision to join the Armenian Issues
Caucus
and look forward to working closely with her on a number of issues of special
concern to her Armenian-American constituents,” stated Artinian.
“I look forward to working with the Armenian American community here in San
Diego, the Armenian National Committee, my colleagues on the Armenian Issues
Caucus, and others to help bring attention to the Armenian Genocide,” stated
Rep. Davis. “By working together, as one voice, we will help bring attention
to such crimes against humanity and stop the cycle of Genocide in our time,”
the Congresswomen added.
Earlier this year, Rep. Davis joined 169 members of Congress in co-signing a
letter to President George W. Bush, urging him to honor his 2000 campaign
pledge of properly acknowledging the systematic deportations and massacres of
the Armenian people by Ottoman Turkey as “genocide.”
Founded in 1995, the Congressional Caucus on Armenian Issues is a bipartisan
forum for the discussion of policies to foster increased cooperation between
the United States and Armenian governments and to strengthen the enduring
bonds
between the American and Armenian peoples. It was founded by Congressmen Frank
Pallone (D-NJ) and John Porter (R-IL) in 1995.
Rep. Davis was elected to the House of Representatives in November of 2000
and
has since served two terms. In Congress, Rep. Davis in a member of the House
Armed Services Committee, the Education and the Workforce Committee, and the
Veterans Affairs Committee. She focuses on issues of defense, education,
environment, health care, and veterans affairs. Prior to her election to
Congress, Rep. Davis served on the San Diego City School Board and in the
California State Assembly.

3) Georgia, Russia Tiff over Abkhazia

TBILISI/WASHINGTON (AP-Civil Georgia)–Georgian officials ordered customs and
immigration authorities on Friday to begin screening all ships arriving in the
separatist Black Sea region of Abkhazia, a move likely to strain relations
with
the country’s giant neighbor, Russia.
The Russian Foreign Ministry reacted angrily, accusing Georgia of trying to
damage the Abkhazian economy, which is heavily dependent on tourism. These are
the peak summer months for travel.
The ministry also moved to reassure Russian tourists, saying they “can feel
relaxed and confident.” “Russia will ensure their security,” the ministry
said in a statement posted on its official Web site.
The order is just the latest effort by Georgia to assert control over its
breakaway regions. Abkhazia has been de-facto independent since splitting off
in a war in the early 1990s, and has close ties with Moscow.
The region’s lush Black Sea coast is a popular destination for Russian
tourists, who commonly arrive by boat.
Meeting with US officials in Washington, Georgian President Mikhail
Saakashvili warned Russians against traveling to Abkhazia.
“Abkhazia is no place for vacationing. It is a war zone from which 300,000
Georgians have been expelled. Tourists have nothing to do there,” Saakashvili
was quoted as saying by the ITAR-Tass news agency Thursday.
Earlier in the week, Saakashvili ordered patrols to open fire on boats
violating Georgia’s waters. Last weekend, a Georgian patrol boat fired at a
civilian vessel off Abkhazia after the boat failed to obey orders to stop
for a
check.
Abkhazian authorities have warned in return that they could fire on Georgian
ships.
In Washington, Saakashvili accused Moscow of trying to provoke a
confrontation
after the Russian lower house of parliament, the State Duma, passed a
resolution criticizing Georgian policies as “shortsighted and futile.”

SOUTH OSSETIA WITH POWELL

“Our policy is clear. We want to demilitarize. We want to democratize the
whole region and keep dialogue going, including dialogue with the Russians.
Some very crazy and outrageous things were said by some of the Russian
politicians, like the fact that Georgia is infringing on their sovereignty,”
President Saakashvili said after the talks with the US Secretary of State
Colin
Powell on August 5
He reiterated that the last thing Georgia wants is some kind of
confrontation.
“Certainly we’re going to overcome that kind of thing and I think the help of
the US Administration has been very helpful”.
US Secretary of State Colin Powell also mentioned the readiness of the United
States to help reduce the tensions. “I think we know how to deal with it
diplomatically,” he said.
“What we’re anxious to do is calm this situation down, remove tensions and
the
propensity for provocation and get back to dialogue,” the US Secretary of
State
added.

4) Armenia Lashes out at Azeri Criticism of Karabagh

YEREVAN (RFE-RL)–A fresh war of words between Armenia and Azerbaijan
continued
on Friday, with Armenia angrily rebuffing Azeri condemnations of the ongoing
military exercise and the upcoming local elections in Mountainous Karabagh
Republic (MKR).
The Armenian Foreign Ministry said that Azerbaijan is using the two events to
“divert attention from its unwillingness to negotiate a lasting peace.”
“Whether complaining about Karabagh’s peaceful, legal, democratic
elections, or
whether making disparaging remarks about the people of Mountainous Karabagh
and
their continued readiness to defend themselves, their families and their
property…these statements simply result in a continuation of the atmosphere of
distrust and cynicism,” the ministry spokesman Hamlet Gasparian, said in a
statement.
The Azeri Foreign Ministry expressed “deep concern” over the ten-day
exercises
that MKR’s forces began on Tuesday, saying they would hamper preparations for
the next meeting between the foreign ministers of Azerbaijan and Armenia.
The latest bitter exchange between the conflicting parties was triggered by
Azeri President Ilham Aliyev’s fresh threat to restore Azerbaijan’s
territorial
integrity by force if the peace process remains deadlocked.
The Armenian government reacted angrily, warning Baku of “disastrous
consequences” of renewed fighting and questioning its commitment to peace. But
Armenian officials have not commented on the even more bellicose statement by
the chief spokesman for Azerbaijan’s Defense Ministry. The official, Colonel
Ramiz Melikov, was quoted by a leading Azerbaijani daily on Wednesday as
saying
that Armenia will cease to exist as an independent state and its territory
will
become part of Azerbaijan “in the next 25-30 years.”
Melikov’s reported prediction has alarmed a leading Armenian-American
advocacy
group. The Armenian National Committee of America (ANCA) sent on Thursday
letters to the White House and the members of the US Congress urging
Washington
to denounce the threat.
“We expect our government to forcefully and publicly confront the Azerbaijani
government over these patently hateful and destabilizing threats,” the ANCA
executive director, Aram Hamparian, said in a statement. “Failure to do so
would send extremely dangerous signals to Baku.”

5) Khachadourians Grant One Million to KZV Armenian School

LA CRESCENTA–Prelate Archbishop Moushegh Mardirossian announced this week
that
Mr. and Mrs. Henry and Rita Khachadourian have donated one million dollars to
San Francisco’s Krouzian-Zekarian-Vasbouragan (KZV) Armenian School.
The grant was announced during a reception at the couple’s home on July 17,
during which Archbishop Mardirossian had arrived in San Francisco to honor
Henry Khachadourian with the order of the Cilician Knight, bestowed by
Catholicos Aram I of the Great House of Cilicia, for Khachadourian’s
consistent
dedication to the Armenian Church and KZV Armenian School. It was, therefore,
with great joy that those present discovered that the couple had, yet again,
pledged their support, and in great proportions.
The Prelacy Religious and Executive councils, along with the pastor and board
of trustees of San Francisco’s St. Gregory the Illuminator Church, and the
finance committee and principal of KZV Armenian School, joined Prelate
Mardirossian in extending their heartfelt appreciation to the couple for their
generosity and kindness.
The Krouzian-Zekarian-Vasbouragan (KZV) Armenian School is one of several
academic institutions under the auspices of the Western Prelacy of the
Armenian
Apostolic Church of America.

6) THE DEMOCRATIC CONVENTION IN REVIEW: Flip-Flop-Apalooza!

BY SKEPTIK SINIKIAN

The dust has settled and the waters appear calm again, but Democrats have yet
to feel the bump in the polls that everyone predicted from their Democratic
Convention last month in Boston. Pundits predicted that the Kerry-Edwards
ticket would make a ten point gain in the polls after the scripted and
rehearsed display of political clout that is the Democratic National
Convention–but alas, they’re still waiting for a boost in numbers that will
not come. Don’t wait too long boys, the election’s just around the corner
(less
than three months to be exact).
Here’s why I don’t think there was any major gain in the polls after the
Convention and you’re welcome to add your own two cents. First of all, the
Democrats have no message. They can’t make up their minds. They’re more
confused than a dyslexic contestant in a scrabble tournament. The second
reason
is that this election is one where most people have already picked which side
they support and are sticking to their choice.
Here’s a sample of the schizophrenia that has taken over the Democrats. One
day, they claim to be against the war in Iraq and bringing the troops home,
the
next day they’re talking about a stronger military, intelligence, and
“finishing the job right!” One day they’re criticizing the Bush administration
for handouts and tax-breaks for corporations and large businesses, the next
day, they’re handing out farm subsidies to farmers and agriculture business
and
paying farmers to burn and destroy their crops. The contradictions in what
they
say and do are so great that it’s no wonder that Senator Kerry has been
labeled
a flip-flopper.
Much like the Republican Party, Democrats realize they have a base of support
they need to count on to do the party’s dirty work–make calls, talk to
voters,
donate money. But they realize elections are won by winning over the center or
the “undecideds” as they are called in campaign-speak. That explains why the
real extreme Democrats like Howard Dean, Al Sharpton, Ted Kennedy, and Dennis
Kucinich weren’t allowed to speak during prime-time television. Unless you’re
addicted to CSPAN or you’re a feminist member of Greenpeace who owns a new-age
music store in Santa Cruz and listens to National Public Radio all day, you
wouldn’t have even known these guys were at the convention. Instead, those of
us who were unfortunate enough to catch the ridiculous spectacle on TV endured
hours and hours of dull, uninspiring speeches which focused more on John
Kerry’s four months on a swift boat in Vietnam than on how he plans on
improving the nation’s economy. In fact, if it wasn’t for commentators telling
me I was watching the Democratic Convention, I wouldn’t have even known there
was a difference in between Republicans or Democrats.
Sure, the speakers mentioned one or two sentences here and there about real
issues, but it was usually followed by a comment like “And if you don’t
believe
me, just ask the guys that served with him in Vietnam!” What guys? We’re
supposed to take advice from a bunch of folks that hung out with Kerry for
four
months? FOUR MONTHS!?? I’ve had relationships that lasted longer than that
where I still knew NOTHING about the person after it was over. But the
Democrats have to play the Vietnam card because they finally have a candidate
who served in the war instead of dodging the draft or smoking doobies in a
commune outside of Berkeley.
Hindsight is 20/20 and when we look back on this convention next year, we’ll
be able to see exactly where the shortcomings of it were. But for now, my
advice, if any, to the Democrats is “Pick a message and stick with it!” And
“Anyone But Bush” is not a good enough message. Say what you will about the
Republicans, they have a goal, albeit ridiculous, to end terrorism. I think
it’s a ridiculous goal only because I’ve grown up watching another Republican
war on an imagined and invisible enemy fail miserably–the war on drugs. You
can’t declare war on just anything. Democrats are no better. They’ve declared
war on racism and on poverty in the past but their declarations have been
symbolic. My point is that even though some of you may dislike the Republican
leaders or their agenda, at least respect that they have one. And if you’re a
Democrat supporting Kerry, pray that he comes up with a clear message soon.
“Hope is on the way” is not an exciting chant or rallying call in this
nation’s
time of need. This is what John Edwards told people to say when faced with
tough times–“Hope is on the way.” Just what Americans want in time of great
need–someone who tells them to yell for “Help.”
Speaking of help, I’ll need all the help I can get just to stay awake through
the Republican Convention in New York later this month. Especially when Dubya
takes the podium. On second thought, sleep isn’t such a bad idea. Someone wake
me up November 3rd , the day after the elections when the circus has
decided to
pack up it’s tent and leave town.
Skeptik Sinikian lives and works in Glendale. His hobbies include watching
CSPAN and giving his unsolicited opinions to innocent by-standers. He can be
reached for comment at [email protected].

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The Caspian Pipeline: Will the $3.6 Billion Be REALLY Worth It?

Raymond James’ Energy “Stat of the Week”
February 17, 2004

EQUITY RESEARCH

Industry Brief

By Wayne Andrews

Independence from foreign oil is a perennially favorite topic for our
politicians. It is also, as we have often stated, a totally
unrealistic goal, as impractical in theory as it is elusive in
practice. As Washington gradually comes to realize that imports must
continue to represent an ever-rising percentage of America’s oil
demand, it turns its attention to an idea that is only slightly more
feasible – reducing reliance on oil from OPEC, and especially its
Middle Eastern members. For strategic reasons, this concept has broad
bipartisan support. As U.S. security policy overlaps more and more
with energy policy, the objective is simple: increase oil supply from
non-OPEC countries as much as possible. Russia, West Africa and South
America are all considered key areas for this, but no part of the
world is arguably regarded as more vital than the Caspian Sea region.

Located at the crossroads of Europe and Asia, the Caucasus is where
the 19th century `Great Game’ for territory was played by the British
and Russian empires. Today, the main competitors are the U.S. and
Russia, and the game is not about land, but rather who will develop
the reserves, build the pipelines, and obtain the oil from this
emerging export area. Politically, the stakes may be high, but from a
pure energy supply standpoint, the region is only a minnow in the vast
ocean of Middle Eastern oil. For all the attention and money that
Moscow and Washington are lavishing on their client states in the
region, the oil they will get does not seem to be, in and of itself, a
worthwhile return on their investment. How much oil are we talking
about? Even under an optimistic scenario, not much at all.

Two weeks ago, the final financing terms were approved for a $3.6
billion Baku-Tbilisi-Ceyhan pipeline, the core of a massive project
designed to bring oil from offshore Caspian fields to Turkey, from
where it will be re-exported to the international market. Reflecting
the staunch support of the U.S. government, the 1,100- mile pipeline
obtained favorable terms from the World Bank and other major
lenders. While we see no inherent problem in the construction of the
pipeline itself, everyone should be clear that the amount of oil in
question is so modest, as to be almost immaterial for the market.

Here’s the situation. There are three major fields in the Caspian:
Azeri, Chirag and Guneshli, dubbed ACG. All three combined currently
produce less than 150,000 barrels per day, about half as much as
Ecuador or Syria, and five times less than Qatar, the smallest OPEC
producer. Certainly, given the modest level of foreign investment in
the area so far, there are tangible long-term growth prospects. As ACG
is being developed by a British Petroleum-led consortium, production
is expected to ramp up to one million barrels per day (bpd) by 2008,
in three phases. The consortium’s extremely ambitious goal is to reach
350,000 bpd in 2005 (when the pipeline is to be commissioned), 700,000
in 2006, and the one million mark in 2008. This is depicted as the
`optimistic’ scenario in the adjacent chart.

Let’s suppose for the moment that production does increase seven-fold
over the next four years. In percentage terms, that would certainly be
quite impressive – an annual growth rate of over 60%. In absolute
terms, however, the growth only represents an extra 850,000 bpd. To
put this in context, we project that global oil demand in 2004 will
average 80.5 million bpd. Even assuming a very conservative 1.2%
annual demand growth for the next four years, 2008 demand would reach
84.4 million bpd, 3.9 million higher than currently. This means that
the much-vaunted Caspian projects will provide less than 22% of the
world’s incremental oil demand over this time period. Or, to put it in
a different way, the Caspian projects will satisfy a little over 1% of
global demand in 2008, as shown in the chart on the prior page. We
have to wonder – is this 1% worth all the media attention and
political fuss over the Caspian pipeline?

There are serious obstacles to Caspian oil development. Even under
the project sponsors’ highly optimistic scenario, therefore, the
Caspian will not come even remotely close to replacing the West’s
dependence on Persian Gulf oil. And, is it realistic to expect
production to ramp up as rapidly as the sponsors believe? We think
not. In fact, there are several significant obstacles that may serve
to slow down development of the Caspian fields over the intermediate
term. While it is difficult to quantify their impact, it seems clear
to us that their overall influence will be negative.

– Endemic corruption

The Baku-Tbilisi-Ceyhan pipeline will run through three countries:
Azerbaijan, Georgia and Turkey. In the two former Soviet republics,
corruption has reached enormous proportions after 1991. Just how bad
is it? – Very bad. The leading global anti-corruption organization,
Transparency International, ranks both Georgia and Azerbaijan 124th on
its country list, with 133rd being the worst possible ranking. Even
Turkey is ranked 77th, in the bottom half. Despite the institutional
safeguards insisted upon by the multilateral lenders who provided
project finance for the pipeline, it is probable that at least some of
the funds will not be spent according to western `best practices.’
This has the potential to materially slow the pace of construction.

– Political instability

The governments of Georgia and Azerbaijan have undergone dramatic
changes in recent months. In Georgia, President Shevardnadze left
office after massive street protests demanding his resignation. The
new administration faces extensive challenges, including a
nearbankrupt government and separatist movements defying his
authority. In Azerbaijan, the death of authoritarian leader Heydar
Aliyev led to violence, with opposition parties protesting his son’s
succession to the presidency. Although none of this directly impacted
the petroleum industry, it clearly creates a volatile climate that may
discourage foreign investment, which is essential for production to
grow. It also means that political attention will be diverted from
economic development, at least for the short term, as new leaders
consolidate their power.

– Threat of violence

Once the pipeline is built, it will face the potential threat of
terrorist attacks from Kurdish separatists in Turkey. On top of that,
the simmering conflict between Armenia and Azerbaijan has not been
permanently resolved. While there is a durable cease-fire in place, it
is important to recall that this conflict had escalated into nearly
full-scale war in the early 1990s. Other ethnic tensions in the
Caucasus may lead to strikes on the pipeline and other oil
infrastructure. Just as the ongoing insurgency is slowing down the
reconstruction of Iraq’s oil industry, the same may happen in the
Caspian region, albeit to a lesser extent.

The above factors, along with the obvious problems of operating in
remote terrain under tough conditions, could easily halve the
project’s output growth rate from the 60% envisioned by the
sponsors. In addition, the highly sour nature of Caspian crude
represents another technical challenge. Under this `mid-range
scenario,’ the Caspian would satisfy only about 0.5% of global oil
demand by 2008.

Conclusion

Developing Caspian oil reserves is important for creating a market
economy and relieving poverty in Georgia and Azerbaijan. From a local
standpoint, therefore, it is a worthwhile project. From a political
standpoint, it may help build the `East-West Corridor’ through the
Caucasus – a central goal of U.S. policy after the Cold War – which
would limit the sphere of influence of Russia and Iran, the region’s
leading powers.

As far as oil supply is concerned, though, the Caspian will not free
the U.S. from its dependence on OPEC. Even under the optimistic
scenario discussed above – which itself is a very big `if’ – the
Caspian will satisfy only 1% of global demand by 2008, compared to
35-45% for OPEC. While oil projects in nearby Kazakhstan and other
Central Asian countries may be more fruitful in the long run, they do
not enjoy the worldwide attention or the capital inflows that are
being lavished on the Caspian area. In short, the Caspian’s output
potential is simply too low to be of any real significance for the oil
market, so there is every reason to believe that OPEC will be at least
as firmly in control of the market in 2008 as it is today.

Contacts:
Wayne Andrews, (713) 789-3551
[email protected]
Pavel Molchanov, Research Associate (713) 278-5270

The Raymond James Financial Center
880 Carillon Parkway
St. Petersburg, FL 33716

Institutional clients may call for additional information:
Research 800-237-5643 – Trading 800-237-8426

The views expressed in this report accurately reflect the personal views
of the analyst(s) covering the subject securities. No part of said
person’s compensation was, is, or will be directly or indirectly related
to the specific recommendations or views contained in this research report.

Investors should consider this report as only a single factor in making
their investment decision.