BP says Baku-Ceyhan oil pipeline to resume operations

By Alex Lawler

LONDON (Reuters) - BP (BP.L) said on Wednesday exports of Azeri oil from Turkey should resume next week after repairs to the $4 billion (2.1 billion pounds) Baku-Tbilisi-Ceyhan (BTC) pipeline damaged by a fire two weeks ago.

The line can pump up to 1 million barrels per day of oil, equal to more than 1 percent of world supply, from fields in the Azeri part of the Caspian Sea to Ceyhan in Turkey. Its closure had supported world oil prices, which fell initially on news that it was reopening.

"We've taken the decision to start dynamic integrity testing of the line today before a move to full operation," said BP spokesman Toby Odone. "This will involve some limited and intermittent flow of oil through the pipeline."

"For ship scheduling purposes, the lifting programme at Ceyhan will be updated today to start loadings from the beginning of next week."

The closure of the pipeline, after an explosion on the line in Turkey on August 5, caused members of the BTC consortium to declare force majeure on exports from Ceyhan, freeing them from contractual obligations.

Kurdish separatist guerrillas claimed responsibility for the explosion, although Turkish energy and military officials said they doubted the blast was caused by sabotage.

Traders of Azeri oil, a high-quality crude priced at a premium to many others, said oil tanker loading at Ceyhan would resume on Monday should testing of the pipeline go smoothly.

Oil prices traded lower on Wednesday following news of the restart, and later rose. U.S. crude oil was up $1.72 at $116.25 a barrel as of 2:05 p.m.