Monday, August 14, 2006

What’s behind the official completion of Baku-Tbilisi-Ceyhan (BTC) oil pipeline?

The following is a draft translation of an Arabic politcal analysis article written by Islamic activists in the Arab world.

On 13 July 2006 the Baku-Tbilisi-Ceyhan (BTC) pipeline project -which is also called Caspian-Mediterranean line- was officially completed, it will transport the petrol of the Caspian in a detoured line towards the lands under the Soviet influence, the Armenian lands and the Turkish straits.

To realize the importance of this oil pipeline, it is important to mention the importance of Caspian oil related to the international oil markets.

The basin of the Caspian consists of two banks, the east bank which is Caucasia, and the west bank which is Central Asia, that means the Caspian basin includes five countries: Azerbaijan, Russia, Kazakhstan, Turkmenistan and Iran.

Azerbaijan is the only country which contains oil and gas reserve in a prominent way, as for Armenia and Georgia, they have only a little reserve. The importance of Georgia lies in its being a crossing country for the energy lines, and it has ports on the Black Sea. Chechnya has an equal importance because of the Russian oil pipeline which passes through Jawhar Jala [Russians call the capital of Chechnya Groznyy, but the Muslims in Chechnya changed its name to Jawhar Jala which means “Jawhar Fortress” in memory of Jawhar Dudaiev, a martyr by the will of Allah]. Russia put pressure to establish a new line Baku-MokhachQala-Novorossiysk which detours Jawhar jala, because it was unable until now from solving the Chechnya crisis.
As for Central Asia, Kazakhstan is famous for oil reserve, and Turkmenistan and Uzbekistan are famous for gas reserve. But Tajikistan and Kyrgyzstan have only little reserve. There is oil reserve of great importance –which was recently discovered- in the Caspian sea. According to estimations the bottom of the Caspian sea is full of oil and gas reserve. As is the case in Georgia, the importance of Afghanistan lies in its being a crossing country for the Caspian oil and Turkmenistan gas, and because it has roads leading to the Arabian Sea through Pakistan.
Some factors such as the dependence of America on the Middle East Oil with a range of 20%, and considering the region (unstable region) directed it -after the cold war- towards the reserve energy in the Caspian Sea. Yet the Middle East contains 65% of confirmed oil reserve and 45% of gas reserve around the world. Besides that the prices of this reserve are very low. That is why the sources of the Caspian sea cannot be an alternative for those of the Middle East, unless the prices of oil remained higher besides the variety of sources, and because the rise of oil prices make the cost price un important, for example according to the estimations of Cambridge organization for energy (CERA) for the year 2003, the total price of drilling and cost is seven dollars for the Caspian oil while it is 2’5 dollars for Iraqi oil and four dollars for Saudi oil.
There is guessing concerning the amount of oil reserve in the Caspian Sea, there is no possible way of knowing the confirmed amount, but it ranges between 250 Billion barrel of oil and 20 trillion cubic meters of gas (this is the total of the confirmed reserve plus the expected hidden reserve). It is quite possible that the real amounts could be much more than these amounts. The prominent factor in this guessing is that the international oil companies try to raise benefits to show that the amount is less, at the time when the producing countries try to attract the investments to it by showing that the amount is higher, for example, there is great difference between the amounts given by the American ministry of energy (AEM) and that which the British oil company (BP) gives, which usually show less amounts. There is also great difference between the real amounts and the estimated amounts, for example, the British oil company (BP) and the American energy ministry (AEM) did not add to their estimations the huge oil reserve in Kashagan in Kazakhstan (which is estimated to be 9-13 billion barrel) and which was recently discovered in the Caspian sea. It is mentioned also that the reserve of Tangiz in Kazakhstan is about 6-9 billion barrels, besides that it was announced recently that the amount is much more than that.

The importance of the reserve in the Caspian sea lies in its being political and economic at the same time, the most important problem which confronts the Caspian sea is that it is a (land Locked) area, there is no open sea in front of it and it is far from the International oil markets, which leads to the rise in transfer prices besides that of cost prices, add to that its being a region which is not politically independent, where the Russian influence is still dominating this area for years.
In spite of the disintegration of the Soviet Union and the origination of new republics on its ruins, yet the Russian influence and the old oil pipelines did not lose much of their importance, because these new republics remained dependent on Russia for being unable of establishing their own infra structure. Even Azerbaijan which is rich in Hydrocarbon (OIL AND GAS) reserve imports oil and gas -from time to time- from Russia. From another side, the western countries headed by America and Britain and through their oil companies and military existence, contributed partially in decreasing the dependence of the independent republics on Russia. That is why concepts such as “Variety of resources” “multiplicity of pipelines” “the eastern-western crossing” are western concepts which aim to put an end for the dependence on Russia, yet Russia is still keeping its control on the Caspian energy resources. Also the Russian gas Company (Gazprom) signed important contracts with the Turkmen oil and gas company (TurkmenNefteGaz) and with the Uzbeki oil and gas company (UzbekNefteGaz) and with the Kazakh oil and gas company (KazRosGaz) besides the Kazakhstan oil which is transported through the coalition of the Caspian pipeline (CPC). Also -except for some parts which are transported through Iran- the Turkmenistan gas is completely transported through Russia. Russia buys gas from Turkmenistan for 60 dollars and sells it to the world for 250 dollars, which led lately to dispute between the Russian oil company (Gazprom) and Turkmenistan to raise the price to 100 dollars, but this dispute is temporary and is a result of the American pressure on Turkmenistan, the economy of which depends mostly on exporting gas to Russia. Also the agreement which was signed in April 2006 for 25 years between the Russian oil company (Gazprom) and Turkmenistan shows that this dispute is not of great importance.
There are two main axis concerning the transport of oil resources in the Caspian and Central Asia, the North-South crossing, and the East-West crossing. Afghanistan forms the central point of the North- south crossing, yet this axis is no more suitable, because America was unable to spread stability there, besides the issue of Kashmir between Pakistan and India was not solved yet. But America is making efforts to form this crossing and making Afghanistan central in it, this is called the “the initiative of great central Asia”, which is sponsored by Robert Boucher the consultant of the American foreign minister, but it is far from being realized, because Russia has solid relations with Uzbekistan, Kyrgyzstan and Kazakhstan. Also Tajikistan and Turkmenistan cannot ignore the Russian factor. Most important is that security and stability will not prevail in Afghanistan for a long time.

That is why the American-Russian struggle concerning resources of energy and transportation, are centered on the Eastern-Western crossing. The spreading of this struggle is manifested in the following points:

Regional disputes: Most important of which is the Chechnya issue, and the issue of Karabag (Nagorno-Karabakh) between Azerbaijan and Armenia, and the issue of Abkhazia, and Ajaria between Russia and Georgia, and other issues concerning South of Osetia. It is mentioned that all the oil pipelines which pass across Russia also cross Armenia Such as the new Baku-Tbilisi-Ceyhan (BTC) Pipeline, which causes the aggravation of regional disputes, there is also news that the Armenians in Georgia are undergoing hostile actions against Georgia. In order to get rid of the Armenian problem, America arranged some initiatives to solve the problems between Turkey and Azerbaijan and Armenia, that is why it was announced that secret meetings had been arranged between Turkey and Armenia, also the president of Armenia ILham Aliyev and the Armenian president Robert Kocharian met this year in Paris and Moscow to solve the disputes among them, but they failed. Also the visit of the president of Georgia Mikhail Saakashvili to Moscow to solve the disputes between Russia and Georgia was in vain.

Current problems and security: this includes four areas which are:

1- The Caspian Sea problem: Where Russia is stirring problems in order to prevent the oil of Kazakh and gas of Turkmen from passing through the pipelines which cross the depths of the Caspian sea detouring Russia. That is why after the last visit of Dick Cheney -the American vice president- to Central Asia in May 2006, an agreement was signed with Kazakhstan to add the region of “Aktau” on the coasts of Kazakh on the Caspian Sea to the Baku-Tbilisi-Ceyhan (BTC) Pipeline through Lorries and not through the pipelines under the sea. Yet that does not mean that Kazakhstan was alienated from Russia.

2- The status of Crimea Peninsula: Negotiations are taking place now concerning the separation of Crimea from Ukraine, these negotiations were started by Vladimir Jrinovski after wards it was transferred to the Russian Parliament (the Duma) but it is far from being realized at the present time. Also Russia is trying to fail the American plans concerning Crimea, and threatens Ukraine by putting this issue for discussion.

3- The status of the Black Sea and the NATO: The status of the Black Sea was determined in 1936 through the Montreux Convention and due to this treaty any navy which does not belong to the countries of the black Sea is not allowed to stay in the Black Sea except for a limited time. Yet America wants its military existence to remain in the Black Sea for a long time, through the extension of the (Active endeavor) initiative of the NATO, and which is working presently in the Mediterranean, to include the Black sea as well. America got control also of Trabzon port on the Turkish coasts in the Black Sea, before and after the Iraqi War. During the last visit of the American foreign minister Condoleezza Rice, it was agreed to establish American military basis in Romania and Bulgaria on the coasts of the Black Sea. There are talks about the regional security of the oil pipeline concerning the Baku-Tbilisi-Ceyhan (BTC) pipelines. All that is to facilitate the American greed in the Black Sea. The American plan concerning the Black Sea is being advanced under the name of “the security program of the Black Sea” which is sponsored by Harford University since 2001. Yet America is not going forward concerning this issue because of the obligatory Montreux Convention. Also the government of Justice and development in Turkey which is pro-American cannot take any lawful resolutions to overcome this obstacle, because the Turkish army which is anti-American considers the treaty of Montreux a continuation of Lozan treaty, that is why it refuses to meddle with it.

4- The status and security of the Turkish straits: The status of the Turkish Straits was also specified through the treaty of Montreux in 1936, according to that treaty both of the straits of (Istanbul and Dardanelles) are international crossings under the Turkish control. Yet America intended through the Justice and Development government in Turkey to prevent the Russian tankers from passing through those straits under the pretext of keeping their security. In reality these straits are considered to be from the most dangerous crossings in the world, and many accidents happen there yearly. Russia realized that America will not allow it to pass through these strait that is why Russia and the European Union are working to establish pipelines which are planned to pass through Balkan. Yet most of the Balkan countries are also under the American influence, which forms a new obstacle in the face of Russia.

Finally, it is difficult for the Northern-southern crossing to re activate the resources of oil and gas from the Caspian Sea and Central Asia, as long as the problems in Afghanistan and Kashmir are still existing, also the Eastern-Western crossing is full of problems surrounding Russia, that is why the need of energy in both America and the European Union are in danger, also the issue of looking for alternative resources of energy for the western countries is an issue, the results of which could not be resolved in a short time, which will lead either to the aggravation of the dispute or a compromise between the parties. At present both of these matters, the aggravation of the dispute and reaching a compromise are going on simultaneously.

Europe is the point of emphasis in reaching a compromise, because from one side it is improving its relations with America, and from another side it works to get closer to Russia. It is worth mentioning that the agreements of the European companies with Russia harm the policy of American containment which is exercised against Russia. The most prominent example on that is the new pipeline which crosses the Baltic sea detouring Poland (Trojan horse of America in Europe), through the endeavor of the Russian gas Company (Gazprom) and its consultant Gerhard Schröder the former German consultant who declared for the Newsweek newspaper: “there is no other alternative for Europe as a partner in energy than Russia”. Yet it looks difficult for the European Union to support the project of Nabco gas pipeline to realize that. Also Hungary signed an agreement with the Russian gas company (Gazprom) only one day before the last visit of Bush, which caused another blow for the Nabco project. Yet the project of Gas Shakh-Daneez pipeline which will begin its activity in 2007 will transport Baku gas to Turkey beside Baku-Tbilisi-Ceyhan (BTC) oil pipeline. From another side turkey presented to Russia the establishment of a new pipeline which will pass under the Black sea parallel to Blue Stream gas pipeline in order to calm down Russia and avoid its expected reactions, and to prevent the consent on (alternative crossing) projects. That is why the last visit of the Turkish president Ahmad Najdat Sazar to Moscow at the end of June 2006, and the visit of the prime minister Rajab Ardoghan point to the importance of the relations with Russia to inaugurate the opening of Baku-Tbilisi-Ceyhan (BTC) oil pipeline on 13 July 2006.

It is important to mention the difference in the tendencies of the American foreign policy, because Rice the American foreign minister is following a realistic classic line in the policies concerning Russia, as is the case with her other policies. This kind of policy, requires self containment and taking steps in order to prepare the suitable trap to make Russia fall into it. But men like Cheney and Rumsfeld follow a new more conservative line which depends on rude arrogance. So, when Cheney criticized Russia in a hard manner during his visit to Central Asia, the reaction of Russian President Putin was similar to his hard manner when he answered him by saying: “USA is a hungry wolf.”

To conclude, when Putin put the Ruble into circulation six months before its date which was expected by the beginning of 2007, points that Russia is trying to exhibit its economic strength, and is trying to attract the foreign attention to the Russian capital, add to that the rise of oil prices which contributed in strengthening the Russian economy.

23 Jumada Al-Akhira1427 AH
19 July 2006 CE

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