Russia anxious over grip on oil as US firms join Great Game

Oct 24, 2001 02:00 AM

by Ahmed Rashid

For all the talk of international alliances and the future of Afghanistan, the real concern for Moscow in Central Asia is cementing its control of the oil supply and the successful conclusion of the modern Great Game. Since the fall of the Iron Curtain, Russia has kept Central Asia's huge oil and gas reserves bottled up by restricting access to export pipelines, all of which run over Russian territory.
America has been pushing alternative pipeline projects out of the region that do not run over Russian soil. Condoleeza Rice, the US national security adviser, assured the Kremlin that America had no designs on Central Asia even as a new oil pipeline went online, strengthening Russia's influence in the region.

One of the major reasons that Washington supported the Taliban between 1994 and 1997 was the attempt by the US oil giant Unocal to build a gas pipeline from Turkmenistan, through Taliban-controlled southern Afghanistan, to Pakistan and the Gulf. At the time America and Unocal hoped that the Taliban would swiftly conquer the country.
As the first tanker at the Russian Black Sea port of Novorossiisk was loaded with oil pumped from Kazakhstan through the Caspian Pipeline Consortium pipeline, it looked like the rivalry between Moscow and Washington was over. But as American interests intensify in the region, Moscow is nervous about giving Washington a toehold.
Ms Rice's statements were designed to allay fears. She said: "I want to stress this: Our policy is not aimed against the interests of Russia. We do not harbour any plans aimed at squeezing Russia out of there." Kazakhstan and Turkmenistan have some of the largest reserves of oil and gas in the world, but Russia cut them off from international markets as all their export pipelines run over Russian territory.

America tried aggressively to break the Kremlin stranglehold over the region, but Ms Rice's comments were the strongest sign yet that Washington is prepared to concede Russia's dominance. US-Russian relations have been revolutionised since the September 11 attacks on America.
In a brave decision, President Putin thumbed his nose at Russia's generals still labouring under Cold War prejudices and gave the go-ahead for Central Asian states to play host to US forces. Both Uzbekistan and Tajikistan are allied to Moscow through the Russian-led Commonwealth of Independent States, and have allowed use of airfields.
The Kremlin is still nervous, however, about giving America the opportunity to increase its influence in Central Asia. After a decade of grandiose promises by international oil companies for an oil pipeline failed to materialise, Kazakhstan has thrown in its lot with the Russians.

The Caspian Pipeline Consortium line is the first big one to be built since the fall of the Soviet Union. Led by Chevron, CPC brought together the governments of Kazakhstan, Russia and Oman, as well as several other oil companies, to raise GBP 1.7 bn of financing.
The petrodollar taps are opening for the Central Asian republics which, despite their huge reserves, have been wallowing in economic misery for much of the past decade. Russia will also do well out of the pipeline. Most of the 1,150-mile route runs across Russian territory. It is expected to earn Russia GBP 28 bn over 30 years.
The war in Afghanistan may have ended America's ambitions in the area as a quid pro quo for Russia's co-operation in the US-led campaign. But when peace and a stable government eventually comes to Kabul, US oil companies will be looking closely at Afghanistan because it offers the shortest route to the Gulf for Central Asia's vast quantities of untapped oil and gas.
They have invested $ 30 bn (GBP 20 bn) in developing oil and gas fields in Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan, but exporting to the West involves lengthy and expensive pipelines. American companies are barred from building pipelines through Iran, and are reluctant to build them through Russia.

Washington is now proposing a $ 3 bn pipeline from Azerbaijan, on the Caspian Sea, through Georgia to Turkey's Mediterranean coast -- a lengthy and expensive project that will put huge transport costs to every barrel of Central Asian oil that reaches Europe. US companies could build a similar pipeline from Central Asia through Afghanistan to Karachi at half the cost, if the next Afghan government can guarantee its security.
Russia fears that is exactly what the Americans want and, now that US troops are based in Tajikistan and Uzbekistan, they will establish a permanent presence and not leave. America has pledged to "consult" in the event of a direct threat to the security or territorial integrity of Uzbekistan, wording that has increased suspicions in Moscow that American troops will stay in its Central Asian backyard after the shooting in Afghanistan is over.

Ahmed Rashid is author of "Taliban: Islam, oil and the new great game in Central Asia."

Source: Telegraph Group Limited
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