1. (C) BOTAS General Manager Gokhan Bildaci and BP's local
BTC Co. President Yasar Latifov told us March 25-26 the Iraq
Operation thus far had not had a serious impact on BTC;
however, both said they were very concerned that the extra
burden the war had placed on Turkey's infrastructure and
construction companies could significantly delay BTC
construction in Turkey. For example, they said, the Turkish
railway system was at full capacity transporting
military-related equipment for both the U.S. and Turkish
military. As a result, the national railway company had been
forced to delay delivery of the BTC pipe provided by the
Turkish Pipe Consortium, which was produced in the Western
town of Izmet and was to be transported by railway to the
pipeline route. Bildaci said it was not clear how long this
delay would continue.




2. (C) Bildaci and Latifov both said the Iraq Operation had
thus far not affected the delivery of BTC pipe at Iskenderun
port, as they had previously feared (reftel). However, pipe
storage at Iskenderun was nearly full, given delays by the
railway company. (Note: Pipe from international sources is
generally being delivered to Turkey at Iskenderun, and then
transported to the pipeline route via rail.) Bildaci said
the major Turkish construction companies that he had
sub-contracted had recently told him they may not be able to
begin BTC construction work April 15 as planned due to
"unspecified" work they may have to do for the Turkish
military at that time.




3. (C) Both Bildaci and Latifov said they were also concerned
that "construction support" would be delayed because of the
war. For example, BOTAS and BTC Co had planned to build many
construction support camps along the pipeline route.
However, much of the equipment needed for these sites, such
as portacabins, was the same equipment currently being used
by the U.S. and Turkish militaries, which they expected would
create shortages and delays.




4. (C) The Turkish Petroleum Agency's (TPAO's) General
Director for International Projects Orhan Duran told econoff
March 26 that the Iraq Operation had thus far not had a
significant impact on BTC, or on TPAO's other operations.
Duran said as long as the Iraq Operation did not affect
TPAO's domestic oil production -- which he did not expect
would happen -- or cause oil prices to fall below USD 18-20
per barrel, it likely would not affect TPAO's equities in
Turkey or the region.
PEARSON