General Interest Key issue: control of Central Asia oil reserves

Oil Export Network in Central Asia and the Causasus [160779 bytes]

The Russian military and political establishment is trying to dominate newly independent, oil rich nations in the Caucasus and Central Asia, says a study by the Heritage Foundation.

The conservative Washington, D.C., think tank issued a paper by Ariel Cohen that notes the 25 billion bbl of reserves in the Kazakhstan, Turkmenistan, and Uzbekistan republics are similar to those in Kuwait and larger than those in Alaska's North Slope and the North Sea combined.

"Control over these energy re- sources and export routes out of the Eurasian hinterland is quickly becoming one of the central issues in post-Cold War politics," the study said "Today's struggle between Russia and the West may turn on who controls the oil reserves in Eurasia."

The study said wars in Chechnya, between Armenia and Azerbaijan, and in Georgia were started or made worse by the Russian military, and the outcome of those wars may decide who controls future pipeline routes.

Moscow wants to ensure that the only route for exporting the energy resources of Eurasia will pass through Russia.

The paper said oil revenues can boost the independence and prosperity of Azerbaijan and Georgia.

"For example, through production royalties, Azerbaijan could generate over $2 billion/year in revenue from its oil fields, while Georgia could get over $500 million/year from transit fees.

"With these new-found oil riches, non-Russian republics in the region would depend less on Russia, economically and militarily. Independent and self-sufficient former Soviet states, bolstered by their oil revenues, would deny Russia the option of establishing a de facto sphere of influence in the Caucasus and Central Asia."

Pipeline routes

The paper noted that two pipeline routes in Central Asia are under consideration. The first would allow oil to flow from the Azerbaijani Caspian Sea shelf to the Black Sea coast. The second would transport oil from giant Tengiz oil field in Kazakhstan west toward Europe and the Mediterranean.

Heritage Foundation said, "Western governments and oil companies participating in the Azerbaijani and Kazakhstani pipeline projects face a choice: Will a neoimperialist Russia (aided and abetted by Iran) dominate development of Eurasian oil and its exports, or will Russia be an equal and fair player in the region with Turkey, the three Caucasian states (Georgia, Armenia, Azerbaijan), and possibly Iran?

"The U.S. should respect the right of Russian companies to bid for the exploration and transport of oil and gas in the region.

"However, the West has a paramount interest in assuring that Caucasian and Central Asian states maintain their independence and remain open to the West. Otherwise, Moscow will capture almost monopolistic control over this vital energy resource, thus increasing western dependence upon Russian dominated oil reserves and export routes."

U.S. role

The paper said the U.S. should try to preserve the independence and economic viability of the newly independent states by working to ensure that Azerbaijan, Kazakhstan, Georgia, and others receive a fair share of oil revenues from the region. The U.S. should ensure that Russia is not a dominant, but rather an equal partner in developing oil resources of the Caucasus and Central Asia.

"Russian oil and gas companies should be allowed to participate in development of Eurasian energy resources on an equitable basis with other countries in the region. That is their right. Forming partnerships with western oil companies could turn the Russian business sector into an ally of the West. However, domination by military means should be rejected."

The study urged the U.S. to work through the Organization for Security & Cooperation in Europe (OSCE) and through bilateral channels to defuse ethnic conflicts in the Caucasus.

"Thus far, the West has focused mainly on settling the crisis in Bosnia, relegating the Caucasus region to the back burner. Now that a Bosnian settlement has been reached, the U.S. should endeavor to settle the conflicts in Ab- khazia and Nagorno-Karabakh. The OSCE would be a useful vehicle for pursuing these goals."

The foundation said the West should strengthen secular Muslim societies, notably Turkey and Azerbaijan, against Islamic militant groups.

"Both Russian geostrategic ambitions and Iranian-style religious militancy pose long-term threats to the Muslim societies of the region. These threats can be countered by helping to create free market economies, respect for the rule of law, and a civil society that respects democracy and political pluralism."

And it said the U.S. should support the western oil route through Georgia and Turkey to reduce transportation hazards in the Bosporus Straits.

"Absent a new oil pipeline, more potentially hazardous oil shipments will pass through the already clogged Bosporus Straits.

"Oil tanker fires like the one in 1994 can block international shipping through the Bosporus for days, causing tens of millions of dollars in damage and threatening the lives and health of local citizens."