US tries to secure Central Asian oil

US plans to assert its control over Central Asia's hydrocarbon wealth — 
oil and gas — are running into problems with governments in the region and 
also with the big oil companies. Washington wants to route the region's oil 
and gas through countries it regards as "friendly" (Turkey and the former 
Soviet republics of Azerbaijan and Georgia) and away from Russia and Iran. 
Its preferred option is to build a pipeline from Azerbaijan to the Turkish 
port of Ceyhan on the Mediterranean.

This route is preferred because it is the furthest of the proposed routes 
from Russian power in the region, and because it integrates Turkey even 
more solidly into the US's regional strategy. It is, however, the longest 
and most expensive of the possible options.

Azerbaijan's oil and gas fields are being developed by the Azerbaijan 
International Operating Company (AIOC), a consortium headed by the Western 
oil giants BP and Amoco.

These companies favour the cheaper and shorter option of expanding the 
existing Baku-Supsa pipeline across to a Georgian Black Sea port Turkey has 
also got in for its cut, demanding US$21 per tonne as a transit fee for 
everything carried by the proposed pipeline.

The oil companies and Azerbaijani Government refuse to pay more than US$18 
per tonne.

There is big money at stake here. AIOC is planning a US$3.1 billion 
expansion of its Azeri operations, confident of getting that back and a lot 
more besides.

Increased tension between the US and Russia over NATO and the Kosovo 
conflict, and the growing resurgence of the Communists in Russia have 
spurred the US to accelerate its plans in the region. It is now in a race 
to solidify its strategic arrangements with the governments in the Caspian 
region.

In February this year the US successfully levered another former Soviet 
republic, Turkmenia, into having its gas piped across the Caspian instead 
of through Russia (or, equally unthinkable, Iran).

At the same time the US is assisting the fomenting of separatism in 
southern regions of Russia — like Chechnya and Daghestan — that just 
happen to straddle strategic Russian oil pipeline routes.

As far as oil and gas are concerned, the US wants to turn the Caspian into 
an American-dominated lake, simultaneously guaranteeing the resources to 
Anglo-US oil companies and denying them to Russia.

The recent disastrous earthquake on a fault line running across northern 
Turkey has probably strengthened the case for the pipeline from Baku to 
Ceyhan, which is in southern Turkey. But the whole project has become 
endangered by Turkish greed.

At the same time, the resulting delays in starting, let alone completing 
either pipeline, are jeopardising the economic health of Azerbaijan. Baku-
Ceyhan may be Washington's first choice, but an expansion of Baku-Supsa is 
cheaper and, more important, faster to build.