Energy, Coming Through

November 1, 2008

By Sanobar Shermatova
Special to Russia Profile

Peacemaking efforts by Turkey and the Minsk group of the OSCE aimed at
settling the Karabakh conflict have an obvious energy motive.

The recent visit of Turkish President Abdullah Gul to Armenia is not
only a small revolution in Turkish-Armenian relations. It is gives hope
that the Karabakh problem will be solved. It is widely known that
Ankara, which maintains friendly connections with the ethnically close
Azerbaijan, has not forgiven Yerevan for the war over Karabakh. It has
specified the return of this territory to Azerbaijan as a condition for
normalizing the relationship with Armenia (it is a known fact that as a
result of a bloody war in the early 1990s, Armenia conquered not only
the territory of Karabakh, populated by ethnic Armenians and an
Azerbaijani minority, which formally belonged to Azerbaijan, but also
some adjacent Azerbaijani territories that Yerevan calls `the safety
zone'). The Armenian side, in turn, not only refused to meet Turkey's
demand halfway, but also demanded acknowledgement of the Armenian
genocide in Turkey in 1915-1916. Thus, the meeting of Abdullah Gul and
Serge Sargsyan implied if not an armistice, then a new ideology for
this part of Eurasia.

Upon his return home, the Turkish president made a press statement at
the airport: `Armenia promised to withdraw from the occupied lands of
Azerbaijan!' Armenia's President Serge Sargsyan did not refute his
Turkish counterpart's words, but his phrasing was slightly different:
`Gul said that he is willing to assist in regulating Armenia-Azerbaijan
relations, and I gladly accepted the offer, because only an abnormal
person can refuse to accept assistance.' This broached the new round of
the big players' struggle over Armenia'a country that has been isolated
since the early 1990s.

A key to Nabucco?

A Turkish expert from the Center for Strategic Studies, Sinan Ogan, is
convinced that adding Armenia to the Nabucco pipeline project is `one
of the main goals of the U.S. and the EU policy in the region.' This
project, according to Ogan, was also discussed during the recent visit
by American Vice President Dick Chaney to Azerbaijan. However, this
plan, just like any others, depends on the regulation of the problem of
Nagorno-Karabakh, which was seized by Armenians in the early 1990s. In
the past, the United States had put a lot of effort into involving
Armenia in the Baku-Ceyhan oil pipeline, but did not succeed. The
territory in question is the stumbling block for any economic
initiatives in the region.

The Nabucco gas pipeline is supposed to circumvent Russia and connect
Europe with Central Asia. According to the plan, a pipeline is to be
laid on the bottom of the Caspian Sea; it is expected to deliver
natural gas from Turkmenistan, Kazakhstan, Azerbaijan and Russia to
Europe. The Western portion of the main will stretch from Georgia's
western border through Turkey, Bulgaria, Romania and Hungary into
Austria. There might be a southern branch connected to this gas
pipeline, originating from Iraq and the countries of the Persian Gulf,
and, possibly, from Iran. The nearest possible date of gas going
through the line is 2012. The length of the pipeline will total 3,300
kilometers. The overall cost of the Nabucco project is estimated at
?¬5.8 billion. Some of the project's participants are Austria's OMV,
Bulgarian Bulgargas, Hungarian MOL, Romanian Transgas and Turkish
Botash. The possibility of working together with Russia's Gazprom is
also considered.

A Baku-based political analyst, Rasim Musabekov, noted that it is
doubtful that Nabucco, which is aimed at circumventing Russia, will
pass through the territory of Armenia, given the current level of
animosity in the Azerbaijani-Armenian relationship. `It is impossible
to realize this project without Azerbaijan, while it is possible to
realize it without Armenia. This is why until the Nagorno-Karabakh
conflict is resolved, I rule out the possibility of passing the
Trans-Caspian gas pipeline through the territory of Armenia,' he said.

Whose Karabakh is it?

Thus, the EU's plans to achieve energy independence from Russia
directly depend on a small territory that Armenia and Azerbaijan are
fighting over. Countries participating in the regulation of the
conflict, as well as Turkey, speak about the territorial integrity of
Azerbaijan. But in reality, Karabakh's return to Azerbaijan looks
utopian: Armenia had made the acknowledgment and the projection of the
Nagorno-Karabakh Republic, founded by Armenians, the cornerstone of its
foreign policy.

Recently, the Armenian Foreign Minister Edward Nalbandian made a
statement in which he said that `the resolution of the Nagorno-Karabakh
conflict is possible only through recognition of the Artsakhi people's
right to self-determination.' Thus, it is obvious that the Armenian
side is not ready for any concessions. What is there to agree about,
then? Azerbaijani political experts think that the maximum of what can
be considered is the return of seven districts around Karabakh,
occupied in the early 1990s, to Azerbaijan's jurisdiction. And in
return for this, Armenia is expecting some concessions.

Maybe the counter-offers will be connected with the removal of
Azerbaijan's and Turkey's blockade of transport routes. The Armenian
economy is in desperate need of this: today, Armenia's path out to the
`big world' lies through Georgia, whose border with Russia has been
blocked for many months now. Meanwhile, as a result of the recent
conflict between Moscow and Tbilisi, the bridge connecting the two
republics was blown up. This caused damage to the Armenian economy
estimated at a minimum of $60 million.

Blessed are the peacekeepers

Turkey, who is trying on the cloak of a peacekeeper, will also gain
from this. The resolution of the old Karabakh problem (even if only
partial) might `unseal' the Southern Caucasus for economic projects,
which Ankara is in a dire need of. Moreover, removing the Karabakh
problem might also bring Turkey some significant political
dividends'its role in this region will increase dramatically.

The peace initiative brought forward by Ankara was not met with
understanding in the United States. The Turkish Daily News noted that
Washington exhibited a very cold reaction to the initiative on creating
a regional security platform. The newspaper quoted a statement made by
the U.S. Deputy Assistant Secretary of State Matthew Bryza, a
facilitator in the process of regulating the Nagorno-Karabakh conflict;
he admitted that he was surprised by this suggestion made by the
Turkish side.

Observers note the fact that Turkey's behavior during the five-day war
in Georgia caused hardly concealed resentment in Washington. It is not
accidental, as experts are convinced, that at the height of the West's
diplomatic attacks on Russia, the influential Wall Street Journal
published an article with a very expressive title: `Will Turkey Leave
NATO?' The author of this article is Zeyno Baran, the director of the
Center for Eurasian Policy of the Hudson Institute, an ethnic Turk and
the wife of the afore-mentioned Matthew Bryza. She wrote that Turkey is
faced with the need to make a choice. Either it sides with its NATO
allies and allows the ships to pass into the waters of the Black Sea to
aid Georgia, or it chooses Russia, and not the NATO countries, as its
main ally.

`Actually, Ankara was not intending to leave the North Atlantic Treaty
Organization. The appearance of the article that couldn't go unnoticed
was obviously connected to the irritation that Turkey's sluggishness
caused in Washington,' noted a source in Turkish diplomatic circles who
wished to remain anonymous.

Observers are having a tough time trying to conjure up an explanation
for the fact that Turkey really did slow down and extend the
negotiations on allowing American ships access to Georgian shores. The
majority agree that the sluggishness was explained by Ankara's
reluctance to lose its established connections with Russia. `It is
clearly obvious that a normal relationship with Russia is a key
condition for Turkey to be able to build the Platform of Security and
Stability,' a source in a Russian expert community close to the Kremlin
said. `At the beginning of the conflict with Georgia, Russia's Ministry
of Foreign Affairs even included Turkey in a not-for-publication list
of countries that theoretically might recognize the independence of
Abkhazia and South Ossetia. That list was presented to the highest
authorities in the Kremlin, and although the hopes of Russian diplomats
were not realized, Turkey's reluctance to spoil its relationship with
Russia is absolutely obvious and undeniable.'

It is definitely not accidental that Turkey's initiative caused
increased activity by the Minsk OSCE group; it did not want to hand its
powers and privileges over to Ankara. And this is despite the fact that
the relations between the two co-chairs of the Minsk group'the United
States and Russia'became very strained after the war in South Ossetia.
After Washington stated that it will work together with Russia only
after the latter withdraws its armed forces from South Ossetia and
Abkhazia, the only remaining co-chair still capable of functioning was
the third one'France. Today, however, this co-chair is doing all the
work for three: in the last few months, French representatives have
visited Armenia and Azerbaijan on numerous occasions, working to reach
the main goal of the Minsk group'finding a peaceful resolution to the
Karabakh problem.

Enter the small guy

With the `battle' for Karabakh still going on in the background,
Azerbaijan is looking for alternative ways to export its energy
resources, bypassing the unstable Georgia. Presently Azerbaijan is
negotiating with Moscow, trying to increase the capacity of the
Baku-Novorossiysk pipeline. The pipeline can be used to deliver Caspian
oil to the Black Sea and further on to Western Europe through Russian
territory. It is a known fact that the pipeline has still not reached
its projected estimated capacity, which is supposed to add up to five
million tons per year.

During the five-day war in the Caucasus, Azerbaijan pumped its oil
through the Baku-Novorossiysk pipeline; it is also called the Northern
Route. The Baku-Ceyhan pipeline, which passes through Georgia into
Turkey, was stopped even before the start of the conflict in Georgia
due to a fire on Turkish territory; the responsibility for this fire
was claimed by Kurdish separatists. Today, Baku-Ceyhan is again
functioning at full capacity, while the residual volumes of the oil
belonging to the State Oil Company of Azerbaijan Republic (SOCAR) are
being pumped north. Why does Baku need the northern route? The
President of SOCAR, Rovnag Abdullayev, explained in an interview to the
Azerbaijani press that the country is trying to achieve a
diversification of raw material supplies to the world's markets; this
is why all potential delivery lines should be maintained in working
order. This is exactly why Azerbaijan is interested in Russia's taking
the Baku-Novorossiysk pipeline up to its projected capacity.

This story reflects the real state of affairs in the Southern Caucasus.
Azerbaijan (and Armenia) cannot depend on just one country'whether it
is the United States, Russia or somebody else. This is why sooner or
later, the interests of the big players will come to a certain balance.
There is another trend that surfaced as a result of the five-day war.
The fact that `small' players, which stayed out of this business until
now, are becoming involved in the peacemaking initiatives indicates
that they no longer wish to play somebody else's game. This was clearly
stated by Turkey. Following its example, Iran also wants to join the
process of regulating the Karabakh problem; Iran is one of the few
countries that have always supported Armenia in this conflict. This
intention was first announced by Iran's Minister of Foreign Affairs
Manouchehr Mottaki during his visit to Georgia in September. Iran's
ambassador in Azerbaijan, Nasir Hamidi Zare, stated in an interview to
the ANS Television Company that Teheran is starting negotiations with
Baku and Yerevan to become a facilitator in the regulation of their
conflict: `Iran aspires to resolve the Karabakh problem within the
scope of international legal norms¦ .' The activity of this country,
which has extremely large reserves of oil and gas, points not only at
political, but also at energy-connected hidden motives. Originally the
Nabucco Project, developed by Europeans, was designed to transit
Iranian gas to the markets of the Old World.

Sanobar Shermatova is a columnist for the Gazeta newspaper.