Kazakstan: US Pushes Baku-Ceyhan Pipeline

Washington seeks to bolster US economic interests in the Caspian region at the expense of Russia and Iran.

By Andrei Chebotaryov in Almaty (RCA No. 109, 22-Mar-02)

America is stepping up pressure on Kazakstan to support the Baku-Ceyhan oil pipeline, which is seen as vital for the completion of the project.

Steven Mann, special advisor to the US Secretary of State, Colin Powell, on Caspian basin energy issues, said during a visit to Astana on March 13, that further collaboration between Washington and Kazakstan in the petroluem sphere was the main purpose of his visit. The next day, President Nursultan Nazarbaev announced, after meeting Mann, that his country would support the Baku-Ceyhan project.

And on March 19, Nazarbaev and Prime Minister Imangali Tasmagambetov discussed the export of Kazak oil via the proposed pipeline with Turkish deputy premier Devlet Bahceli. Nazarbaev described the talks as "fruitful".

n the late Nineties, the US proposed the Baku-Ceyhan pipeline - which would traverse Azerbaijan, Georgia and Turkey - to enable the export of Caspian energy resources to Western markets without the involvement of either Russia or Iran - Washington's main rivals in the region.

Analysts initially dismissed it as too impractical and expensive, but over the past few years the US has sought to persuade countries in the region to back the project, with its growing military presence in the area giving it greater leverage. Washington is now so confident of the outlet going ahead that it has set a completion date of 2005.

Previously, the Kazak government avoided committing itself to this politically-motivated route, focusing instead on other more economically beneficial options, including the already operational Caspian Pipeline Consortium pipeline from the Tengiz fields to Novorossiysk in Russia. Also under consideration are pipelines to western China and Iran.

As recently as December last year, Nazarbaev, during a visit to Washington, stressed that his country was interested in "multiple routes". He said that there was no immediate need for Kazakstan to join the Baku-Ceyhan project because even if it increased its oil production existing pipelines would be sufficient.

The US is eager for Astana's participation in the Baku-Ceyhan pipeline because it needs Kazak oil to operate at full capacity. If the project has to rely on only Azeri output, it would become much more difficult to find petroleum companies to invest in the scheme.

The American project is geared towards trying to counter Russian and Iranian influence in the region. And Washington's recent war on terrorism has given it greater reason to work against the interests of the latter. Indeed, analyst Marat Khasanov says the US is now pushing the Baku-Ceyhan pipeline because it is keen to increase the economic isolation of Iran, which it regards as part of the so-called Axis of Evil.

Tehran, for its part, is not prepared to see its stake in the region's energy resources diminish. It has stopped foreign oil companies from conducting petroleum exploration in that section of the Caspian it regards as its own. In July 2001, Iranian air and naval forces intercepted Azeri and British Petroleum vessels.

Armen Khanbabyan, a correspondent on the Russian newspaper Nezavisimaya Gazeta, believes the US is keen to eventually control Caspian energy resources, which would allow it to better regulate world prices.

Construction of the Baku-Ceyhan pipeline, he says, is central to its plans. However, the project not only depends on support from Kazakstan and the countries it traverses, but also on the extraction of vast quantities of oil and gas from the Azeri and Kazak sectors of the Caspian. To date there have been no notable successes on this last crucial point.

Nevertheless, the project clearly has its appeal for Kazakstan. At present, Astana exports most of its oil via Russia and the Russians recently hiked up their fees by 13 per cent.

Andrei Chebotaryov is an IWPR contributor in Almaty