NATO, Russia, and Oil pipelines
by Steve Rosenthal
15 June 1999 16:23 UTC
(The following is from Stratfor.com. It presents detailed information
about the relationship between NATO-Russian rivalry and competition
for control of oil and pipelines in the Caspian region.)
Conflict Threatens Caucasus Pipelines June 15, 1999
SUMMARY
Competition between Russia and NATO for influence on Russia's
periphery will undoubtedly accelerate following their confrontation in
Kosovo. Besides the Baltics and Ukraine, competition between Russia
and NATO is already fierce in the Caucasus. Increasing tension in this
already unstable region may drive oil companies operating in Central
Asia to look elsewhere for pipeline routes to move their oil. In
particular, they are likely to look south, to Iran.
ANALYSIS
Besides Kosovo, the Baltics, and Ukraine, another area of heated
contention between Russia and the West is in the Caucasus. There,
Russia is increasingly cooperating militarily with Armenia and is
believed to be cooperating politically with Abkhaz separatists, to
counterbalance NATO influence in Azerbaijan and Georgia. Complicating
matters, the wild card Chechnya is forging its own path with the aid
of Middle Eastern interests. Caught in the middle are international
oil companies, who are attempting to cash in on Central Asia's oil
wealth.
The main pipelines for Central Asian oil -- the Baku-Novorossiysk
pipeline and the Baku-Supsa pipeline -- pass through the Caucasus and
are vulnerable to regional unrest. The older and larger
Baku-Novorossiysk line was ruptured by an explosion early on June 14,
apparently during an attempt by Chechen rebels to steal oil from the
route. The pipeline has been illegally tapped in the past. Flow
through the pipeline has also been halted repeatedly by the Chechen
government, on the grounds that Russia has failed to pay fees for use
of the portion of the pipeline that passes through Chechen territory.
The recently opened Baku-Supsa route, while touted as a safer route
for avoiding the Chechen instability, also quite poignantly avoids
Russia altogether -- undermining Russian influence on the region's
oil and Russian revenue from that oil. The Baku-Supsa route was opened
following military maneuvers training to defend the line by
Ukrainian, Georgian, and Azeri troops, acting as part of the regional
alliance then known as GUAM, and under the framework of NATO's
Partnership for Peace. GUAM, which also included Moldova, expanded to
include Uzbekistan during meetings in Washington DC, held
concurrently with the NATO anniversary summit in April, and
established a charter encompassing military cooperation within the
group and with NATO. GUUAM members, though part of the Commonwealth of
Independent States (CIS), have opted out of the CIS Collective
Security Treaty.
Intensifying this increasing competition between Russia and NATO in
the Caucasus, Azerbaijan claims that Russia brokered the sale of
several Chinese surface to surface missile complexes to Armenia,
which remains in a fragile truce with Azerbaijan over the contested
Nagorno-Karabakh enclave. Russia has also provided Armenia with
advanced jet fighters and surface to air missile systems. Reports have
now surfaced, denied by Yerevan, that three of the Chinese missile
systems are targeted at Georgia's Supsa oil terminal. On June 14, in
the largest incident of its kind since the two countries signed a
cease-fire five years ago, 300 Armenian troops reportedly attacked
Azeri positions in the Terter region. Baku claims three Armenian
assaults were repulsed with heavy losses.
As tension escalates in the Caucasus, NATO must again decide -- now
that it has put a toe in the pool, whether it intends to dive in. Oil
companies may not be willing or able for the situation to be
resolved. While the Baku-Supsa route was a Russia-skirting stopgap
until the expensive and controversial U.S.-backed Baku-Ceyhan
pipeline to Turkey could be built, neither route looks particularly
secure now or in the future. As long as foreign access to the oil
fields is not threatened, oil companies may now revive their interest
in previously considered alternative pipeline routes. One of these,
through western Afghanistan, has its own security concerns to contend
with. But the other, and perhaps most rational route -- south through
Iran -- is primarily blocked by U.S. political opposition. However,
U.S.-Iranian relations have been gradually improving, and we expect
to see U.S. oil companies with interests in Central Asia take another
shot at accelerating U.S.-Iranian detente.