This all they do to hegemonize the oil resources, writes Rafeeq A.Naqash

GreaterKashmir.com (press release), India
June 1 2005

Since the collapse of the Soviet Union in 1991, the vast oil deposits
beneath the Caspian Sea have made the regions of Georgia and Azerbaijan
the focus of heated interest. The United States sees the region as an
alternative source of energy, Russia regards it as its own strategic
reserve, other countries - Iran, Turkey, even China - have a stake
in control of the oil, where it goes, and how. They call it "The
Great Game" - a reference to the rivalry between Imperial Russia and
the British Empire over influence in Central Asia at the end of the
19th century. This time the stakes are just as high - control over
the vast deposits of crude oil beneath the Caspian Sea but there are
more players.

The United States (and the West) is taking a keen interest in the
region as an alternative source of energy supply for the next century.

Russia has long regarded the Caspian as its strategic reserve and
Moscow does not take kindly to the prospect of the once-Soviet states
which actually sit on the oil drilling their way to real economic
independence.

Iran is keenly interested both in becoming a player itself and in
keeping the United States from dominating its back yard to the North.

Turkey desperately seeks a sphere of influence of its own after being
effectively locked out of the European Union.

Even China, the new giant Tiger to the East, has indicated interest.

At the center of it all is Caspian Sea, and Azerbaijan is booming. A
London-based think-tank recently estimated there are 68 billion
barrels of crude beneath the Caspian in 'proven' reserves. The latest
US. government estimate puts reserves at over 100 billion barrels,
worth approximately $2 trillion at current prices.

Whatever the true value of Caspian oil, the rumor of riches has
attracted an a large number of entrepreneurs including international
oil giants, as well as a host of subcontractors interested in getting
their own piece of the oily action. Azerbaijan is the centre of the
entire effort. The various oil companies have pledged to invest over
$25 billion in Azerbaijan by completion in 2004. There is no question
that Azerbaijan is going to be the wealthiest country in the region
in ten years owing to its oil reservoirs.

But paradox is that the Oil won't really come on line until 2005 if
everything proceeds according to plan. Nor is it possible to know the
true cost of the pipeline. Because clouds of uncertainty are hovering
over the construction of pipeline. Even the routing of the "early oil,"
a line that goes through Russia -- but it also goes through Chechnya,
which is still struggling with Moscow. Another possibility is to go
through Georgia to a new terminal on the Black Sea. The most of all
options goes straight South over Iran to the Persian Gulf.

That is not only the shortest route, but also the most secure -
petroleum is so cheap in Iran there is no temptation to drill into the
line, as is currently the practice in Chechnya (and was in Georgia).

The problem is that US companies could not participate without
violating the Iran-Libya Sanctions Act (ILSA). And there are questions
about continued stability in Azerbaijan itself. Most worrisome is
the ongoing stalemate with Armenia to the west over the disputed
territory of Nagorno Karabakh, where ethnic Armenians have declared
their independence from Azerbaijan.

(The Author is Research Scholar Deptt. CCAS, University of Kashmir)