CASPIAN WATCH: RUSSIAN POWER-PLAYS ON ‘EARLY OIL’ HALLMARK OF KREMLIN EXPANSIONISM PAST — AND FUTURE?

(Washington, D.C.) One week from today,
representatives of the Caspian Sea Oil Consortium —
representing oil companies from, among other countries,
the United States, Russia, Turkey and Azerbaijan, are
scheduled to make a strategically monumental decision: Through
which countries will the Consortium export the vast
quantities of Azeri and other oil deposits it expects to
tap from Caspian Sea reserves estimated to rival those of
the North Sea and Alaskan North Slope, combined?

At issue is whether Russia will enjoy monopoly
control over these oil flows — and the attendant revenue
streams? Or will there ultimately be a southern,
Western-oriented pipeline, for example, through Georgia
to the Turkish Mediterranean port of Ceyhan?

‘Great Game’ Redux

Moscow clearly understands the long-term strategic
significance of this choice. Consider just a few of the
recent developments in which it appears to have had at
least an indirect hand, if not a very overt and violent
role: A genocidal Russian war in Chechnya; a
Russian-supported Armenian political and military
campaign against Azerbaijan; Russian violation of the
Conventional Forces in Europe Treaty so as to retain many
hundreds of pieces of heavy armor beyond the levels
permitted by the CFE Treaty; nurturing an ominous
strategic partnership with Iran (including providing it
with an advanced nuclear program and training Iranian
security services); Kremlin pressure tactics against
Turkey, exacerbated by Kurdish terrorist attacks
supported by Syria, Iran and other Russian clients; and
an assassination attempt against Georgian leader Eduard
Shevardnadze shortly after he agreed to support a
southern pipeline across Georgia.

Doesn’t Washington Recognize that Enormous U.S.
Interests Are At Stake?

In stark contrast, the Clinton Administration
seems to be at best passive, if not actually acquiescent,
concerning Moscow’s multifaceted effort to wire the deal
and consolidate its position in the oil-rich Caucasus
region. Under the direction of the reflexively pro-Moscow
Deputy Secretary of State, Strobe Talbott, and the clubby
Gore-Chernomyrdin Commission, the United States has
largely ignored the latest Kremlin imperial gambit.

Administration apologists claim that the Clinton team
has simply been distracted. Its distractions would seem
to be no accident, however. In fact, the Yeltsin
government has choreographed the denouement of its push
to lock up the Caspian Sea with two elegant diversions:
shrill opposition to NATO’s eastward expansion and
insistent demands for a prominent role in Balkan
peacekeeping/making. Extreme sensitivity in Washington
and allied capitals to Moscow’s purportedly wounded
feelings has served as a backdrop, if not a pretext, for
largely accommodating Russian demands for monopolistic
control over the export of Consortium products.

The Clinton Administration’s mishandling of this
issue is all the more appalling in light of the obvious
U.S. interests at stake in the decision to be announced
in Baku on 9 October. These include:

• Ensuring the free movement to international
  markets of oil and gas from the Caspian Sea and
  Central Asia;
• Preserving the independence and economic
  viability of former Soviet republics in the
  region — and avoiding the de facto or de
  jure reconstitution of a southern-tier Soviet
  Union;
• Thwarting political/military initiatives by
  Russia and Iran to wield inordinate influence
  over pipeline routing decisions and other issues
  fundamental to the development of these huge
  reserves;
• Strengthening secular Muslim societies
  (notably, Turkey and Azerbaijan) against the
  predations of Islamic extremism; and
• Protecting against further deterioration of
  the sensitive ecosystems and waterways of the
  region (e.g., Turkey’s imperilled Bosphorus
  Straits).

Blame Enough to Go Around

Unfortunately, the Republican-controlled Congress has
not adequately focused on the United States’ equities in
this regional drama, either. For example, Senate Majority
Leader Robert Dole (whose affection for Armenia
reportedly stems from the nationality of the doctor who
helped him recover from his nearly fatal war wounds) has
encouraged the Clinton Administration to hold Azerbaijan
at arms length. Instead, he has promoted ties with an
Armenia closely linked to Moscow and Tehran — including
some $500 million in U.S. taxpayer-funded assistance over
the past five years, a head-of-state visit by Armenian
president Ter Petrossian to Washington earlier this year
and a second visit to Capitol Hill later this month —
benefits thus far denied a secular, Western-oriented
Azerbaijan.

Such treatment is all the more remarkable in light of
the fact that Armenia recently signed a 25-year military
basing agreement with Moscow that gives Russia
responsibility for security of Armenia’s border with
Turkey. Azerbaijan, on the other hand, recently concluded
a 25-year multi-billion dollar deal with American oil
companies, a development evidently considered of little
political importance in Washington.

Relevant congressional committees have also failed to
give due consideration to the strategic implications of
the pending decisions concerning “early oil”
extracted from the Caspian Sea region. This is a
particularly regrettable oversight insofar as the
near-term decisions will have momentous long-term
repercussions: To name one, who will control the
world’s second- largest oil supplies for the
industrialized democracies in the 21st century?

The Bottom Line

In light of the high stakes and the inadequate
attention this issue has received to date from senior
U.S. policy-makers, the Center for Security Policy will
be producing a “Caspian Watch” of periodic Decision
Briefs dealing with the upcoming decision and the
repercussions that flow from it over time. Meanwhile, the
Center urges the executive and legislative branches in
Washington to accord the strategic Caspian Sea oil region
the priority it deserves — and to start safeguarding
U.S. interests increasingly in jeopardy there.