Putin calls for new oil and gas alliance to protect Russia's position

Feb 10, 2002 01:00 AM

by Paul Webster

After months of co-operating with the new anti-terrorist alliance in Central Asia, Russian President Vladimir Putin was rethinking the massive US military build-up on his country's south-western borders. Russia, he announced, needed a Central Asian alliance of its own.
The news from the Kremlin came in late January, after meetings between Putin and Saparmurad Niyazov, the ultra-authoritarian president of Turkmenistan, a former Soviet republic north of Afghanistan where US troops are unwelcome. But Putin wasn't thinking in military terms. His mind was on Central Asia's vast natural gas deposits, which, along with the oil deposits in the region, are estimated to rival the Middle East's multi-trillion-dollars reserves.

Calling on energy-rich Kazakhstan, Uzbekistan and Turkmenistan to confirm Russian control over "the volumes and directions of Central Asia's gas exports," he all but admitted he shares the worst fears of many Russians about American intentions in Afghanistan. Those fears have generated a growing crescendo of concern in Russia's press and parliament since Sept. 11.
Just a week before Putin's move, Gennady Seleznyov, speaker of the Russian parliament, returned from a visit to Central Asia loudly demanding that Russia act quickly to counterbalance the growing US presence there. Seleznyov's view were quickly echoed by the head of the Russian Border Guard Service, Konstantin Totsky, who demanded the Americans leave as soon as anti-terrorist operations in Afghanistan cease.
The Russian press has been similarly strident. "The so-called honeymoon in relations between Russia and Washington, which started after the Sept. 11 attacks in the United States, seems to be gradually developing into a new cold war," said one of the newspapers two days before Putin's call.
"The present situation somewhat resembles the post-World War II events, when the Americans turned from our allies into enemies very quickly," commented another weekly journal. In Kazakhstan, the vast former Soviet republic where Russian and American energy companies are deeply involved, the television program Panorama warned of "a standoff" brewing between Russia and the US in the region.

Two days after Putin's call, Russia's most respected business paper bluntly denounced American intentions. "The main goal of the military presence is to uphold the economic interests of US companies, primarily in the oil and gas sectors".
If the tension is clear in Russia, American strategic-resource analyst Michael Klare says it's equally obvious to observers in the United States.
"Russia is deeply troubled by the growing US military presence in Central Asia," he says. "This area is likely to be the pivot of US-Russian competition and conflict in the future." Competition for control of Central Asian and Caspian energy reserves has roots deep in the 19th century, when Britain and Russia angled for control in what has been termed the "Great Game."

At the dawn of the last century, the Caspian region generatedone-half the world's petroleum, delivering vast fortunes to the Nobel and Rockefeller dynasties. After the Bolsheviks came to power in Russia in 1917, foreigners fled, leaving the Soviets to control Central Asia for seven decades.
With the Soviet collapse in 1991, American oil companies quickly opened offices in the newly independent Central Asian republics. But the Russians stayed in the game, leading to a scramble for energy rights and pipeline routes that Pakistani journalist Ahmed Rashid, author of Taliban: Militant Islam, Oil And Fundamentalism In Central Asia, describes as "a revamp of the Great Game of the 19th century."
In 1998, Dick Cheney, now US vice-president but then a senior oil executive who played a key role in the American oil industry's $ 30 bn investment in Central Asia and the Caspian, told an industry meeting: "I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian."

Over the last five years, as the extent of the reserves became clear, the need for new pipeline routes out of Central Asia to deep-water ports led Russia and the US into an increasingly bitter game of pipeline poker. Possible new pipeline routes included lines through Iran to the Persian Gulf, routes through Georgia and Russia to the Black Sea or through Afghanistan to Pakistan and India.
Because US law forbids commercial relations with Iran, and because the Kremlin has kept tight control over Russian routes, American strategists favoured the Afghan option. By the mid-1990s, the Texas-based Unocal company had firm plans for a 1,300 km pipeline that would link the huge gas fields of Turkmenistan to Pakistan through Afghanistan.
When the Taliban consolidated power in 1996, senior officials of the regime were invited to visit Unocal headquarters, but the Taliban proved to be unsavoury partners. Unocal left Afghanistan in 1998, after the US bombed Osama bin Laden's bases there. Soon after, Russian oilmen were in Pakistan to discuss an Afghan pipeline.

Hostilities with the Taliban had proved disastrous for US hopes of wresting control of Central Asian pipeline routes from Russia. But Sept. 11 changed everything. Large numbers of American troops are now based in the region. And talk about a US-built pipeline is again percolating.
"Once the country has been pacified, I think everyone will be interested," says Martha Brill Olcott, a former US State Department adviser who recently published a Carnegie Foundation report on the future of Afghanistan. "I think we're 18 months to two years away from a serious discussion again of the projects." Pakistani analyst Rashid agrees. "When peace and a stable government eventually comes to Kabul, US oil companies will be looking closely at Afghanistan," he says. "It offers the shortest route to the Gulf for Central Asia's vast quantities of untapped oil and gas."
Olcott argues that a US-built pipeline will generate transit fees for the Afghan government, which last year collected only $ 12 mm in taxes. But she says that, although American military power in the region makes US companies secure, they might still be reluctant to move as quickly as the Russians.
"My gut feeling is that the pipeline is likely to be Russian. They'll settle for a lower profit margin than American companies and shareholders will accept." To help prompt American initiative in the face of Russian intensity, she recommends the White House use public subsidies to support a US pipeline.

In Kazakhstan, foreign minister Yerlan Idrissov describes Afghanistan as "a litmus paper to measure the degree of real partnership between the major powers." Idrissov ranks Central Asian pipelines alongside the ABM treaty as key friction points between Russia and the US. So far, American officials deny any tension and insist that fighting terrorism is their only goal in the region.
When US troops began arriving in Central Asia last year, White House adviser Condoleezza Rice -- herself a former oil company director -- assured Russia that Washington had no designs on Central Asia. "I want to stress this," she said. "Our policy is not aimed against the interests of Russia. We do not harbour any plans aimed at squeezing Russia out of there."
For its part, Unocal issued a statement on Sept. 14 emphasizing that it is not involved in Afghanistan. But as the US military build-up in Central Asia continues, and Afghans seek the financial means to salvage their ruined country, American leaders appear increasingly candid.
Speaking in Tashkent, Uzbekistan, while touring Central Asia last month, Senate majority leader Tom Daschle said the US "must be very wary of leaving a void in Afghanistan in particular, but in the region as well."

Paul Webster is a Canadian freelance reporter based in Moscow.

Source: Paul Webster
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