Oil pipeline completed: a sign of rising great power rivalry in Central Asia
By Peter Symonds -

World Socialist Web Site
May 31 2005

Last week's ceremony in the Central Asian republic of Azerbaijan to
open the Baku-Tbilisi-Ceyhan oil pipeline received scant coverage in
the international press. Nevertheless the completion of the US-backed
pipeline, which has taken a decade to construct, will inevitably
accelerate the scramble for oil and gas in the Caspian Basin region
and heighten the potential for conflict among rival major powers.

>>From the outset, planning for the oil pipeline was guided not by
immediate economic considerations but long-term US strategic goals.
Since the early 1990s, Washington has been determined to exploit the
unprecedented opportunity opened up by the collapse of the Soviet
Union to establish its hegemony in the key resource-rich region of
Central Asia.

The 1,770 km pipeline, simply known by the acronym BTC, is one of
the world's longest and cost $4 billion to build. It snakes its way
from the Sangachal oil and gas terminal south of the Azeri capital
of Baku on the Caspian Sea through neighboring Georgia and some of
the most mountainous regions of the Caucasus to finally reach the
Turkish port of Ceyhan on the Mediterranean.

As far as Washington was concerned, the chief consideration in
plotting this tortuous path was to undercut the existing pipeline
system in Russia and to avoid Iran, which offers the shortest and
cheapest pipeline route from landlocked Central Asia to a coastline.
The US has maintained an economic blockade of Iran since 1979.

The resulting pipeline route through Azerbaijan, Georgia and Turkey not
only created engineering problems but produced a decade of political
intrigue as the White House, first under Clinton then Bush, sought
to strengthen the US position in each of these countries. In 2003,
the Bush administration backed the so-called Rose Revolution that
ousted former Georgian President Eduard Shevardnadze and installed
openly pro-US Mikhael Saakashvili in his place.

The BTC's significance was underscored by the presence at the opening
of US Energy Secretary Samuel Bodman, who read out a letter from
US President Bush, along with the presidents of the three countries
involved and also of the Central Asian republic of Kazakhstan. Just
prior to the ceremony, Kazakhstan's President Nursultan Nazarbeyev
signed a declaration committing his country to transport some of
its huge oil reserves through the pipeline-a move that will create
tension with Moscow.

Lord Browne, chief executive of British Petroleum (BP), was also
present. BP with a 30.1 percent in the pipeline is the leading partner
in the controlling consortium, which also includes the Azerbaijani
state oil company SOCAR (25 percent), Unocal (US, 8.9 percent),
Statoil (Norway, 8.71 percent) and Turkish Petroleum (6.53 percent)
as well as French, Italian, Japanese and other US corporations.

Georgian President Saakashvili highlighted the strategic rivalry
involved in the BTC's construction when he baldly referred to its
completion as "a geopolitical victory" for the Caspian Basin nations.
The obvious question is: "victory" over whom? The answer is just as
clear: it is a win for Washington and US-aligned Central Asian regimes
over Moscow, which is seeking to retain its economic and strategic
dominance in a region that has been part of Russia then the Soviet
Union for well over a century.

Azerbaijan's President Ilham Aliyev commented at ceremony: "The
realisation of this project would not have been possible without
constant political support from the US." American backing for the
pipeline to pass through Georgia has assisted Azerbaijan in isolating
its rival Armenia-also a potential route for a pipeline to Turkey. In
April, the US signed an agreement to provide a further $110 million
in aid to impoverished Georgia. Earlier this month, Bush included
Georgia on his European tour, hailing the "Rose Revolution" and
declaring Saakashvili as "a freedom fighter".

In his letter read out at the opening ceremony, Bush declared the
pipeline to be "a monumental achievement". "This pipeline can help
generate balanced economic growth, and provide a foundation for a
prosperous and just society that advances the cause of freedom," he
stated. In fact, the pipeline will only reinforce the subordination
of the Central Asian republics to the US, heighten social inequality
and buttress the anti-democratic rule of the current regimes.

State within a state

The 50-metre wide corridor, through which the pipeline runs, is a
virtual state within a state. It is governed by the Inter-Governmental
Agreement signed by the participating countries. The agreement largely
exempts BP and its partners from any laws in the three countries by
allowing the consortium to demand compensation should any legislation
(including environmental, social and human rights laws) make the
pipeline less profitable. The pipeline passes through a national park
in Georgia and several other environmentally sensitive sites. Critics
claim that land has been taken from local farmers without proper
compensation.

BP has invested at least $15 billion in Azerbaijan. An article on the
Asia Times website last week commented: "According to Baku's street
wisdom, the man who really rules Azerbaijan is David Woodward, BP's
chairman, known as 'the viceroy', a walking oil atlas with more than
three decades working for the company from Scotland to Abu Dhabi and
from Alaska to Siberia. Woodward and BP mercilessly spin that BTC is
the cleanest and safest pipeline ever built. Georgian peasants and
English non-governmental organizations beg to differ."

The Bush administration has not hesitated in supporting the corrupt
Azerbaijan dictatorship. Heydar Aliyev, a long-time Stalinist party
boss, ruled the republic as his personal fiefdom from 1969 as part of
the Soviet Union, then in the 1990s as a separate country. After his
death in 2003, his son Ilham, notorious as a playboy, casino owner
and vice-president of the state oil company SOCAR, took over the
reins. According to Transparency International's global corruption
index, Azerbaijan ranks 140 out of 146 countries.

On May 21, Azeri riot police waded into an opposition protest of some
500 people with batons, arresting at least 45 people. The demonstration
was called to demand amendments to the country's electoral laws, the
creation of an independent public broadcaster and the prosecution
of the killer of journalist Elmar Guseinov, a critic of the regime
shot dead in early March outside his apartment. The government banned
the protest, declaring that the timing was "inappropriate" just days
before the pipeline's opening.

A report by Human Rights Watch last month criticized neighboring
Georgia, hailed this month by Bush as "a beacon of liberty",
for failing to guarantee the end of torture and duress to extract
confessions from prisoners. "The new government... has taken some steps
to address abusive practices, but these efforts have proven inadequate
to stem them. Moreover, some of the government's new law enforcement
policies appeared to trigger new allegations of due process violations,
torture and ill-treatment," it stated.

All three participating countries are desperate for income. The
pipeline will take six months to fill and is projected to reach a
flow of one million barrels a day by 2008. Once fully operational,
Azerbaijan is expected to accrue $29 billion a year in oil revenues
and Georgia and Turkey $600 million and $1.5 billion in annual transit
fees respectively.

Since the collapse of the Soviet Union, the standard of living in
both Georgia and Azerbaijan has plummeted, with the annual average
per capita income currently at just $730 and $710 respectively.
Little or none of the projected pipeline income will be used to end
the social crisis in these countries. One measure of the indifference
to the plight of ordinary people is the consortium's token spending
on "community and environmental investment"-estimated to be just $30
million compared to construction costs of $4 billion.

As far as Washington is concerned, the pipeline's projected economic
benefits are just one element of a more far-reaching plan. The BTC is
a convenient lever for the US to extend its political influence and
to buttress its military presence in Central Asia to the detriment
of its rivals-particularly Russia and China. The Bush administration
has already used its "war on terrorism" to establish military bases
for the first time in Tajikistan and Uzbekistan. Now the US is using
"pipeline security" as the pretext for forging closer military ties
with Georgia and Azerbaijan.

Speculation that the US is seeking to base troops in Azerbaijan was
heightened by last month's visit to Baku by US Defence Secretary
Donald Rumsfeld. In congressional testimony earlier this year, US
commander in Europe General James Jones declared that the US was
interested in creating a special "Caspian guard" to protect the BTC.
The Wall Street Journal reported in April that the US plans to spend
$100 million on such a force, including the establishment of a command
centre in Baku. Concerned over Russian opposition, Azerbaijan has to
date been reluctant to commit itself.

Russian hostility to Washington's growing intrusion into Central
Asia was spelled out by Mikhail Margelov, head of the international
affairs committee of the country's parliamentary upper house.
"Russia's attitude to proposals made by some politicians that this
task [pipeline security] should actually be delegated to the United
States, is firmly negative. Russia will always oppose the presence
of any foreign military contingents within the countries of the CIS
[Commonwealth of Independent States]," he commented.

Konstantin Kosachyov, a State Duma parliamentarian, pointed to
Washington's geopolitical ambitions, stating: "It is absolutely obvious
that this project was born for political rather than economic reasons
in order to create a stable alternative for transferring Caspian energy
resources to the West bypassing Russia and some other states, such as
Iran." Russian President Vladimir Putin's special representative for
international energy cooperation, Igor Yusufov, was due to attends
the BTC opening ceremony but excused himself at the last minute on
the grounds of illness.

The completion of the pipeline is just the first stage in what
will certainly be sharpening rivalry in Central Asia for control
of the region's largely untapped resources. The Caspian Sea basin
is currently estimated to contain eight percent of the world's oil
reserves as well as having huge natural gas reserves. A gas pipeline
following the same route is due to be completed next year. An agreement
was signed in March 2005 between Azerbaijan and Kazakhstan to build
a pipeline across the Caspian Sea connecting the Kashagan offshore
oil field in Kazakhstan to Baku and thus the BTC.

This latter deal highlights the logic of the newly completed BTC
pipeline. Unable to fully utilize the BTC's capacity simply from
oilfields in Azerbaijan, the BP consortium, with the backing of
Washington, is compelled to seek oil from Kazakhstan and other Central
Asian sources, intensifying competition and potentially leading to
political and military conflict.

From: Emil Lazarian | Ararat NewsPress