Russia upstages U.S. in Caspian oil game

By Vladimir Radyuhin

MOSCOW, JAN. 10. Russia has stolen a march on the United States in the race for control of Caspian oil, winning long-term commitment from Kazakhstan to use Russian pipelines for exporting its hydrocarbons to Europe.

The Kazakhstan President, Nursultan Nazarbayev, told the visiting Russian President, Vladimir Putin, that Russia was a "priority transit route for Kazakh oil."

"We have discussed ways of piping more Kazakh oil across Russia via new pipelines to the Baltic Sea and by expanding the capacity of the existing oil and gas lines," the RIA Novosti news agency quoted Mr. Nazarbayev as saying at a joint press conference with Mr. Putin in the Kazakh capital Astana.

Kazakhstan, which produced 45 million tonnes of oil last year, pumped 32 million tonnes for export through the pipelines of the Caspian Pipeline Consortium running from northern Caspian across Russia to the Black Sea port of Novorossiisk. The Kazakh leader said the piping of Kazakh oil via the CPC line could be increased to 48 million tonnes.

CPC pipeline is the main rival of the U.S.-supported Baku-Tbilisi-Ceyhan pipeline being built from Azerbaijan across Georgia to Turkey. Azerbaijan's oil reserves, however, are insufficient to fill the BTC pipe when it becomes operational in 2005, and the U.S. has been lobbying Kazakhstan, which plans to triple its oil output, to channel its main oil exports through BTC. The agreements reached by Mr. Putin in Astana dealt a blow to Washington's hopes.

"Russia and Kazakhstan are drafting a long-term programme for the transit of Kazakh oil across Russia till the year 2020," the Russian Deputy Premier for Energy, Viktor Khristenko, told reporters after Mr. Putin's talks with the Kazakh leadership. He said a separate programme would cover the transit of Kazakh gas via Russian territory.

A Russian Government source reiterated Moscow's negative view of the alternative BTC route.

"We continue to believe that this pipeline is economically inexpedient," the source told RIA Novosti. "It is a money-losing project, as its rated capacity is 60 million tonnes of oil a year, but there is outlook for no more than 28 million tonnes of oil, and only half of it has been tapped so far."

On the sidelines of Mr. Putin's visit the Russian oil major Lukoil signed an accord for the investment of $3 billions into joint development of Kazakhstan's oil and gas fields in northern Caspian.


www.hindu.com...

Yes, nice one. I posted on this a while back too. The U.S is painting the CPC as a co-operative investment with Russia, but it's clearly Russia getting it's own way. The U.S has been losing this battle for a while. I'm interested in where China is in all of this at the moment, I haven't been able to find too much on their involvement except the obvious, that they really want in there. In my opinion this region is what the war on terror and the Afgan / Iraq wars are really all about.

[Edited on 11-1-2004 by kegs]

What Bush had to say about the CPC on completion in 2001:

I congratulate Russia, Kazakhstan, and Oman, and their consortium partners, for the commissioning of the Caspian Pipeline Consortium (CPC). U.S. firms, notably ChevronTexaco and ExxonMobil, have played leading roles in this project. These facilities represent the culmination of years of effort. They are examples to the world that the United States, Russia, and Kazakhstan are cooperating to build prosperity and stability in this part of the world.

The CPC highlights the important progress by countries in the Caspian region in building a transparent and stable environment for international trade and investment. The CPC project also advances my Administrations National Energy Policy by developing a network of multiple Caspian pipelines that also includes the Baku-Tbilisi-Ceyhan, Baku-Supsa, and Baku-Novorossiysk oil pipelines and the Baku-Tbilisi-Erzurum gas pipeline. These projects will help diversify U.S. energy supply and enhance our energy security, while supporting global economic growth.

www.whitehouse.gov...

This is a good article by Lutz Kleveman, the author of "The New Great Game: Blood and Oil in Central Asia":

The Great New Game. The 'war on terror' is being used as an excuse to further US energy interests in the Caspian

Nearly two years ago, I travelled to Kyrgyzstan, the mountainous ex-Soviet republic in Central Asia, to witness a historical event: the deployment of the first American combat troops on former Soviet soil.
As part of the Afghan campaign, the US air force set up a base near the Kyrgyz capital, Bishkek. Brawny pioneers in desert camouflages were erecting hundreds of tents for nearly 3,000 soldiers. I asked their commander, a wiry brigadier general, if and when the troops would leave Kyrgyzstan (and its neighbour Uzbekistan, where Washington set up a second airbase). "There is no time limit," he replied. "We will pull out only when all al-Qaeda cells have been eradicated."

Today, the Americans are still there and many of the tents have been replaced by concrete buildings. Bush has used his massive military build-up in Central Asia to seal the cold war victory against Russia, to contain Chinese influence and to tighten the noose around Iran. Most importantly, however, Washington - supported by the Blair government - is exploiting the "war on terror" to further American oil interests in the Caspian region. But this geopolitical gamble involving thuggish dictators and corrupt Saudi oil sheiks is only likely to produce more terrorists.

www.guardian.co.uk...