Regarding the Baku-Tbilisi-Ceyhan (BTC) pipeline: The pipeline in question is working on low capacity currently. Although much hope is being placed on it for the longterm, thus far, it is almost a symbolic or experimental venture western special interests have embarked on in the region. They are envisioning that the pipeline will work at full capacity sometime in 2009. Nevertheless, even if it was to work at 'full' capacity it is only able to deliver 1% of the West's oil needs - this according to those who designed the pipeline. It is obvious that the pipeline is also very vulnerable to sabotage. As a result, I really don't see how Washington would place much economic hope in the BTC project - especially now with a resurgent Russia asserting itself in the region. One must remember that most of the agendas/plans for the region were written or devised during the 1990s - when Yeltsin's Russia was on its knees. I don't think anyone in the West foresaw the rapid reemergence of Russia. So, it's a different game now and perhaps, just perhaps, Saakashvili's time has started to run out. In short, compared to the region's vast oil/gas distribution network that is more-or-less under Moscow's control (which is said to control a large percentage of the West's energy needs) the BTC pipeline is not something the West is willing to go to war over.
Arevagal
*******************************************
Analysis: A pipeline against Russia?
2007Five Eastern European states have agreed to build a new oil pipeline, in a move they say increases their energy security by reducing dependency on Russia. Azerbaijan, Poland, Lithuania, Georgia and Ukraine on Oct. 10 signed a deal that could provide Eastern (and ultimately Western) Europe with an alternative to Russian oil imports. The treaty, signed by the five countries’ presidents in the course of the energy summit in Vilnius, Lithuania, forms a consortium to build a $700 million pipeline to pump Azerbaijani oil to Poland and the Baltic Sea. The new pipeline, to be completed in 2011, is a 310-mile extension to an existing one in western Ukraine. It bypasses Russian territory northwestward and links the existing pipeline to the Polish Baltic Sea port of Gdansk. The presidents of the five countries involved praised the deal, arguing it would improve energy security and help diversify Eastern Europe’s oil imports.
Georgian President Mikhail Saakashvili said the deal sprung from the "most successful summit" in which he has "ever participated." "This deal will have great impact not only for signatory countries, but for all of Europe," Polish President Lech Kaczynski said in Vilnius. Kaczynski, known for his critical position toward Russia, said the deal was not aimed against another country (an apparent reference to Moscow), a statement few can believe. "It's a symbolic move by these countries to show to Russia that it is to be isolated," Alexander Rahr, Russia expert at the German Council on Foreign Relations, a Berlin-based think tank, told United Press International Friday in a telephone interview. Europe gets nearly a third of its gas and a third of its oil from Russia, a country that has become an energy superpower, and also acted accordingly. Russia in the past two years repeatedly flexed its energy muscles in several oil and gas price rows. Russia has stopped delivering crude to Lithuania and Latvia, and temporarily cut off gas supplies to Ukraine and Belarus.
Critics accuse Moscow of using its energy assets as a foreign-policy weapon against former Soviet republics that turn toward the West. Russia, however, contends that it is merely asking these states to forgo preferential rates on energy and pay what the rest of Europe does. As some countries in Eastern Europe, namely the Baltics, are virtually completely dependent on Russian energy imports, they are scrambling for possibilities to diversify. Lithuania is in an especially troubled position given that Russia in July 2006 stopped delivering crude to Mazeikiu Nafta, the only refinery in the Baltics, because of alleged necessary pipeline repairs. But whether the new pipeline extension would be a viable alternative remains unclear: A key country to get on board would be Kazakhstan, the largest oil producer in the region, but while it was present in Vilnius, it so far has resisted joining the project. The only country that could fill the pipeline with crude is Azerbaijan, but experts doubt that it will use up all its production capacity (which will reach some 55 million tons a year) for the new project, especially given other commitments.
"This project doesn’t make sense given the existence of the Baku-Tbilisi-Ceyhan," Rahr said. The BTC pipeline links the Azerbaijani capital of Baku with Tbilisi, the capital of Georgia; and Ceyhan, a port on the southeastern Mediterranean coast of Turkey. It is not only a new oil pipeline (in use since May 2005), but also the second longest in the world, and one that is supplied with nearly all of Azerbaijan’s oil. "This new pipeline will end like all the others before: It won’t be built," Rahr said.
Georgian President Mikhail Saakashvili said the deal sprung from the "most successful summit" in which he has "ever participated." "This deal will have great impact not only for signatory countries, but for all of Europe," Polish President Lech Kaczynski said in Vilnius. Kaczynski, known for his critical position toward Russia, said the deal was not aimed against another country (an apparent reference to Moscow), a statement few can believe. "It's a symbolic move by these countries to show to Russia that it is to be isolated," Alexander Rahr, Russia expert at the German Council on Foreign Relations, a Berlin-based think tank, told United Press International Friday in a telephone interview. Europe gets nearly a third of its gas and a third of its oil from Russia, a country that has become an energy superpower, and also acted accordingly. Russia in the past two years repeatedly flexed its energy muscles in several oil and gas price rows. Russia has stopped delivering crude to Lithuania and Latvia, and temporarily cut off gas supplies to Ukraine and Belarus.
Critics accuse Moscow of using its energy assets as a foreign-policy weapon against former Soviet republics that turn toward the West. Russia, however, contends that it is merely asking these states to forgo preferential rates on energy and pay what the rest of Europe does. As some countries in Eastern Europe, namely the Baltics, are virtually completely dependent on Russian energy imports, they are scrambling for possibilities to diversify. Lithuania is in an especially troubled position given that Russia in July 2006 stopped delivering crude to Mazeikiu Nafta, the only refinery in the Baltics, because of alleged necessary pipeline repairs. But whether the new pipeline extension would be a viable alternative remains unclear: A key country to get on board would be Kazakhstan, the largest oil producer in the region, but while it was present in Vilnius, it so far has resisted joining the project. The only country that could fill the pipeline with crude is Azerbaijan, but experts doubt that it will use up all its production capacity (which will reach some 55 million tons a year) for the new project, especially given other commitments.
"This project doesn’t make sense given the existence of the Baku-Tbilisi-Ceyhan," Rahr said. The BTC pipeline links the Azerbaijani capital of Baku with Tbilisi, the capital of Georgia; and Ceyhan, a port on the southeastern Mediterranean coast of Turkey. It is not only a new oil pipeline (in use since May 2005), but also the second longest in the world, and one that is supplied with nearly all of Azerbaijan’s oil. "This new pipeline will end like all the others before: It won’t be built," Rahr said.
Source: http://www.upi.com/International_Sec...t_russia/2339/
TRACING THE ORIGINS OF THE GREAT CASPIAN BASIN ENERGY GAME
The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea
When the Cold War drew to a close in the early 1990s, most people who followed the geopolitical zigs and zags for a living figured the date to remember would be August 19, 1991, the start of the failed coup against Mikhail Gorbachev, and the beginning of the end for the Soviet Union. It turns out, however, that the most memorable date of the turbulent 1990s may prove to be September 20, 1994, the day the so-called “contract of the century” was signed, and the day the Great Game over Caspian Basin energy reserves began in earnest. The Cold War, it seems, didn’t truly end; it merely morphed into the new Great Game. The United States and Russia may no longer be enemies per se, but it is indisputable they remain fierce competitors. Energy issues have replaced ideology as the main factor driving their competition, with pipelines supplanting missiles as the weapons of choice. The main arena of competition has also shifted from Germany’s Fulda Gap to the Caspian Basin.
The close of the Cold War, of course, has been well chronicled. The same could not be said for the new phase of geopolitical competition – until now. Steve LeVine’s new book, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, constitutes a compelling and authoritative account of the origins of the Great Game in the Caspian Basin. It is a must-read for anyone interested in foreign affairs, given Washington’s current energy-centric approach to statecraft. There is perhaps no individual more qualified than LeVine, who served as a foreign correspondent in Central Asia and the Caucasus throughout the 1990s, to chronicle the power-plays, bluffs, chicanery and skullduggery associated with the development and export of Caspian Basin energy resources. The book is well organized, helping readers to keep names and events straight. Each chapter focuses on a specific deal or personality, rather than trying to keep multiple threads going concurrently in the name of adhering to chronological order.
LeVine succeeds in making what is, at its core, a book about deal-making read in spots like a spy thriller. The narrative is helped by the fact that many of the dealmakers themselves adopted cloak-and-dagger personas. One early energy adviser to Kazakhstan’s government, a Dutch middleman named Johannes (John) Deuss, does nothing to discourage rumors that he is being pursued by a “hit squad.” Another dealmaker, James Giffen, is now basing his defense in a criminal case involving bribery on a claim that he was providing information to the CIA. [For background see the Eurasia Insight archive]. Also making an appearance Marat Manafov, a pistol-packing Azerbaijani entrepreneur, who, when negotiating with various Western oilmen, was fond of pulling his piece from his shoulder holster and pointing it at his interlocutor’s head. Meanwhile, Harry Cook, a geologist with the US Geological Survey, is dubbed the “Indiana Jones” of rocks.
The book contains revealing tidbits about regional political leaders’ past and present. One learns, for example, that former Azerbaijani leader Heidar Aliyev, as a high school and university student, enjoyed acting, and even appeared as Hamlet in one production. This helps explain how Aliyev performed so well on the political stage, and how he was so adept at conducting negotiations. LeVine paints Kazakhstan’s leader Nursultan Nazarbayev as a paragon of practicality. That practicality, he writes, was “born of a childhood raising sheep in the mountains, and riding a donkey to buy bread in the nearest town. Among his earliest memories was family talk of the fateful year of 1929, when the Soviets forcibly settled Kazakh nomads, and, as he observed, ‘the animals died without feed and care in the collective farms, and the people died of hunger.’” During the early 1990s, Nazarbayev also exhibited a curious streak. Late at night during a visit to San Francisco, Nazarbayev “delighted in wandering about on his own,” LeVine writes.
The book is at his best when explaining the development of the Caspian Basin’s oil fields, and the construction of the pipelines to transport the natural resources to Western markets. The chapter on the development of the Kashagan oil field makes for especially fascinating reading, given the particular challenges relating to geography, ecology and climate. “Drilling conditions in the North Caspian Sea were unusual. Unlike the moderately deep waters off Baku [the Azerbaijani capital], the North Caspian was extremely shallow – about ten feet deep in spots above Kashagan. Highly mobile ice formations were a threat during winter months,” LeVine writes. “For oil rigs, ice was among the most lethal of natural phenomena,” LeVine continues. “It moved like an organism and, since it was solid, could take an offshore platform with it; indeed, moving ice has been known to bring down lighthouses in its path.”
If the book has a fault, it’s that the Russian side of the story gets shortchanged. There is little on the machinations of Russian companies, and Moscow’s oilmen – such as Vagit Alekperov, LukOil’s boss and reputedly one of the world’s 20 richest men – are rendered as one-dimensional figures, whereas their Western counterparts get full 3-D treatment. Of course, there are tangible reasons for this, mainly connected to access, or the lack thereof. Given the Kremlin’s control over Russian energy policy, any detail concerning Russian oilmen seems to be considered a state secret by those making the decisions inside the Ring Road. Also, it was only in recent years that Russia became a major player in the Caspian Energy game. For much of the 1990s, when the Caspian Basin’s biggest deals were going down, Russia was struggling to regain its footing following the shock delivered by the Soviet Union’s implosion.
With the benefit of an epilogue, LeVine manages to take the Caspian Great Game right up to the first half of 2007. Even so, many chapters in this energy-development saga remain to be written. In just the past couple of months, for instance, political changes in Turkmenistan have helped revive interest in the United States and elsewhere in the construction of a trans-Caspian natural gas pipeline. In addition, the Kashagan oil field has been in the news, with the Kazakhstani government feuding with the energy consortium led by the Italian conglomerate Eni SpA over production delays. [For background see the Eurasia Insight archive]. There is also the unresolved fate of James Giffen, the merchant banker accused of funneling millions in bribes to top Kazakhstani leaders. Giffen’s trial date in a federal court in New York City has been repeatedly pushed back, and some observers now believe the case may never proceed to opening arguments. [For background see the Eurasia Insight archive]. In the broader scheme of things, it also remains to be seen whether the United States or Russia -- or even a third entrant in the competition, China – will come out on top in the Caspian Basin. Russia currently seems well positioned to dominate, but as events in recent years have shown, geopolitical fortunes are prone to sudden shifts.
At a November of 1999 signing ceremony in Turkey, marking an agreement on the Baku-Tbilisi-Ceyhan oil pipeline, US President Bill Clinton noted the historic importance of the moment. “I’ll bet if you polled the citizens of the United Stares and Turkey, over 90 percent of them would never have heard of the Baku-Ceyhan pipeline or the trans-Caspian gas pipeline,” Clinton is quoted as saying in the book. “But if we do this right, twenty years from now, 90 percent of them will look back and say, ‘Thank you for making a good decision at a critical time.’” We are now almost half way through Clinton’s 20-year time frame, and it’s too early to label the former president’s statement as visionary or misguided. It’s quite possible that people will end up cursing the initiators of the Caspian Basin Great Game, rather than expressing gratitude for their foresight. Whatever the outcome, it’s virtually a sure thing that events in the Caspian region will have a profound impact on global developments over the next decade.
The close of the Cold War, of course, has been well chronicled. The same could not be said for the new phase of geopolitical competition – until now. Steve LeVine’s new book, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, constitutes a compelling and authoritative account of the origins of the Great Game in the Caspian Basin. It is a must-read for anyone interested in foreign affairs, given Washington’s current energy-centric approach to statecraft. There is perhaps no individual more qualified than LeVine, who served as a foreign correspondent in Central Asia and the Caucasus throughout the 1990s, to chronicle the power-plays, bluffs, chicanery and skullduggery associated with the development and export of Caspian Basin energy resources. The book is well organized, helping readers to keep names and events straight. Each chapter focuses on a specific deal or personality, rather than trying to keep multiple threads going concurrently in the name of adhering to chronological order.
LeVine succeeds in making what is, at its core, a book about deal-making read in spots like a spy thriller. The narrative is helped by the fact that many of the dealmakers themselves adopted cloak-and-dagger personas. One early energy adviser to Kazakhstan’s government, a Dutch middleman named Johannes (John) Deuss, does nothing to discourage rumors that he is being pursued by a “hit squad.” Another dealmaker, James Giffen, is now basing his defense in a criminal case involving bribery on a claim that he was providing information to the CIA. [For background see the Eurasia Insight archive]. Also making an appearance Marat Manafov, a pistol-packing Azerbaijani entrepreneur, who, when negotiating with various Western oilmen, was fond of pulling his piece from his shoulder holster and pointing it at his interlocutor’s head. Meanwhile, Harry Cook, a geologist with the US Geological Survey, is dubbed the “Indiana Jones” of rocks.
The book contains revealing tidbits about regional political leaders’ past and present. One learns, for example, that former Azerbaijani leader Heidar Aliyev, as a high school and university student, enjoyed acting, and even appeared as Hamlet in one production. This helps explain how Aliyev performed so well on the political stage, and how he was so adept at conducting negotiations. LeVine paints Kazakhstan’s leader Nursultan Nazarbayev as a paragon of practicality. That practicality, he writes, was “born of a childhood raising sheep in the mountains, and riding a donkey to buy bread in the nearest town. Among his earliest memories was family talk of the fateful year of 1929, when the Soviets forcibly settled Kazakh nomads, and, as he observed, ‘the animals died without feed and care in the collective farms, and the people died of hunger.’” During the early 1990s, Nazarbayev also exhibited a curious streak. Late at night during a visit to San Francisco, Nazarbayev “delighted in wandering about on his own,” LeVine writes.
The book is at his best when explaining the development of the Caspian Basin’s oil fields, and the construction of the pipelines to transport the natural resources to Western markets. The chapter on the development of the Kashagan oil field makes for especially fascinating reading, given the particular challenges relating to geography, ecology and climate. “Drilling conditions in the North Caspian Sea were unusual. Unlike the moderately deep waters off Baku [the Azerbaijani capital], the North Caspian was extremely shallow – about ten feet deep in spots above Kashagan. Highly mobile ice formations were a threat during winter months,” LeVine writes. “For oil rigs, ice was among the most lethal of natural phenomena,” LeVine continues. “It moved like an organism and, since it was solid, could take an offshore platform with it; indeed, moving ice has been known to bring down lighthouses in its path.”
If the book has a fault, it’s that the Russian side of the story gets shortchanged. There is little on the machinations of Russian companies, and Moscow’s oilmen – such as Vagit Alekperov, LukOil’s boss and reputedly one of the world’s 20 richest men – are rendered as one-dimensional figures, whereas their Western counterparts get full 3-D treatment. Of course, there are tangible reasons for this, mainly connected to access, or the lack thereof. Given the Kremlin’s control over Russian energy policy, any detail concerning Russian oilmen seems to be considered a state secret by those making the decisions inside the Ring Road. Also, it was only in recent years that Russia became a major player in the Caspian Energy game. For much of the 1990s, when the Caspian Basin’s biggest deals were going down, Russia was struggling to regain its footing following the shock delivered by the Soviet Union’s implosion.
With the benefit of an epilogue, LeVine manages to take the Caspian Great Game right up to the first half of 2007. Even so, many chapters in this energy-development saga remain to be written. In just the past couple of months, for instance, political changes in Turkmenistan have helped revive interest in the United States and elsewhere in the construction of a trans-Caspian natural gas pipeline. In addition, the Kashagan oil field has been in the news, with the Kazakhstani government feuding with the energy consortium led by the Italian conglomerate Eni SpA over production delays. [For background see the Eurasia Insight archive]. There is also the unresolved fate of James Giffen, the merchant banker accused of funneling millions in bribes to top Kazakhstani leaders. Giffen’s trial date in a federal court in New York City has been repeatedly pushed back, and some observers now believe the case may never proceed to opening arguments. [For background see the Eurasia Insight archive]. In the broader scheme of things, it also remains to be seen whether the United States or Russia -- or even a third entrant in the competition, China – will come out on top in the Caspian Basin. Russia currently seems well positioned to dominate, but as events in recent years have shown, geopolitical fortunes are prone to sudden shifts.
At a November of 1999 signing ceremony in Turkey, marking an agreement on the Baku-Tbilisi-Ceyhan oil pipeline, US President Bill Clinton noted the historic importance of the moment. “I’ll bet if you polled the citizens of the United Stares and Turkey, over 90 percent of them would never have heard of the Baku-Ceyhan pipeline or the trans-Caspian gas pipeline,” Clinton is quoted as saying in the book. “But if we do this right, twenty years from now, 90 percent of them will look back and say, ‘Thank you for making a good decision at a critical time.’” We are now almost half way through Clinton’s 20-year time frame, and it’s too early to label the former president’s statement as visionary or misguided. It’s quite possible that people will end up cursing the initiators of the Caspian Basin Great Game, rather than expressing gratitude for their foresight. Whatever the outcome, it’s virtually a sure thing that events in the Caspian region will have a profound impact on global developments over the next decade.
Source: http://www.eurasianet.org/department...v110507b.shtml
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