Struggle for power in the Region

By Asoka Ranaweera (for Safe Democracy)

Asoka Ranaweera explores the history and present-day oil conflicts within the little known region of the Caspian Sea. Ever since the discovery of abundant resources in the region, the world’s nations have been vying for control over the land not only within a market context, but also on geopolitical, and ethno-linguistic levels. Ranaweera argues that the world has entered into a second Great Game, much more complex than the first and with much more at stake.

Asoka Ranaweera is a political analyst and the Chief Executive Officer of “Grid2Grid Networks Powered by People“, based in Metropolitan Washington DC. He is an expert in the Eurasia and Caspian Sea Region. The views expressed herein are those of the author and do not necessarily reflect the views of Grid2Grid’s clients, partners and/or affiliates.

FOR DECADES BEFORE THE END OF THE COLD WAR, the Caspian Sea Region remained a mystery to all but a few academics in the West. Central Asia from the Caspian Sea to the Caucasus Mountains has commonly been known as the Caspian Sea Region, including the countries of Azerbaijan, Kazakhstan, Turkmenistan, Russia and Iran. The region is a complex web of nationalities, unique in its diversity.

In ancient times Alexander the Great traversed the Caspian Sea Region on his way to conquer India. On what became known as the Great Silk Road, merchants plied the route in giant caravans between Europe and China, to be later recorded extensively by Marco Polo. The discovery of oil in Azerbaijan in the mid-1850s led to a struggle for power between Russia and Britain in what became known as the Great Game.

With the fall of the Soviet Union and the rise of the United States, the West was slowly free to uncover the vast resource potential of the Caspian Sea Region. Ever since, a new Great Game has been underway. And the renewed competition for the Caspian Sea Region is taking place within the context of complex geopolitical, ethno-linguistic, religious, historical and cultural undercurrents.

It is estimated that Azerbaijan has oil reserves of between 7 to 13 billion barrels of oil. Kazakhstan has reserves of approximately 26 billion barrels and Turkmenistan, gas reserves of around 20.4 trillion cubic meters. Oil and gas companies continue to exploit the great potential of the region.

In 2000 in East Kashagan, off the shore of Kazakhstan, a consortium called the OKIC, composed of companies such as Shell, British Gas, Exxon, Mobile and others, made one of the largest oil discoveries in the last 30 years. The East Kashagan field was found to contain approximately 13 billion barrels of oil. In addition to oil and gas, the region was also rich in gold, platinum, uranium and a variety of other mineral resources as well.

American and European multinationals led the early charge into the Caspian Sea Region and in 1994, British Petroleum signed an agreement with Azerbaijan that became known as the Contract of the Century to develop three oil fields offshore with estimated reserves of about 3 billion barrels.

When oil prices in 1998 fell to their lowest point in two decades, the impetus to search for oil in the region was only temporarily abated. Oil prices began to rise again, the momentum to explore was re-energized, and Japanese, Chinese, Indian and South Korean companies joined American and European multinationals in diversifying their supply base. Since then, the region has been a scene of active competition between countries big and small, from all corners of the world.

As US, European, and Asian interest increased in the Caspian Sea Region from the mid to late 1990s, the former great power, Russia, began to re-assert its influence. Russia already controlled most of the oil and gas pipelines in the region, giving it tremendous leverage over Azerbaijan, Kazakhstan and Turkmenistan.

Yet, much to Russia’s displeasure, British Petroleum began to build the Baku-Ceyhan pipeline in the late 1990s that by-passed Russian territory through Georgia and onto the Mediterranean via Turkey. The BTC pipeline was recently inaugurated and its peak output is claimed to be a million barrels of oil per day. Although there are many plans in the making for multiple routes through China, Iran and Afghanistan, the BTC pipeline is, for the moment, the only pipeline in the area not under Russian control.

America and the EU have actively courted the governments of Azerbaijan, Kazakhstan and, to a lesser extent, Turkmenistan to support multiple pipeline routes in order to diversify their access to oil and gas. So far, they have achieved no results.

In recent years, the involvement of Asian companies has further complicated the geopolitical landscape, as more countries are competing for the collaboration of Azerbaijan, Kazakhstan and Turkmenistan.

The Caspian Sea Region is home to many small ethnic groups. These peoples include, Avars, Lezgins, Meshketian Turks, Aguls, Ossetians, and Chechens. In all, there are approximately 3 major nationalities, 24 minor nationalities and even more sub-groups. The region is also home to a diversity of religions including Sunni Muslims, Shia Muslims, Christians, Jews and Zoroastrians. People in the region speak a variety of languages, many Turkic in origin.

The Ottoman Empire, and Russian Imperialism both had a strong influence in shaping the culture and history of the Caspian Sea Region. And history continues to be a major driving force in regional politics, so much so that the on-going conflict between Russia and Georgia over Ossetia and Abkhazia is linked to a dispute, now hundreds of years old.

Currently many problems are also tied to new geopolitical realities such as allegiance to the United States. The Georgian government is firmly pro-American.

Prior to September 11, Russia and the US competed fiercely for influence in the Caspian Sea Region. With Azerbaijan determined to free itself from Russian control, the US seized the opportunity to destabilize Russian power, and supported Azerbaijan’s drive for independence and democracy.

September 11th, however, brought about huge changes in the way the US viewed the region. Rather than promoting democracy, the US became more tolerant of the autocratic nature of many of the governments around the Caspian Sea. The US needed military bases in its war against the Taliban and later against Iraq, and preferred stabile authoritarian regimes, no matter how repressive, to chaotic democracies.

And as the US and Iranian nuclear dispute continues to escalate, countries like Azerbaijan, that share a border with Iran, have become increasingly important to US foreign policy. Ignoring their previous principles, Americans have turned a blind eye to the often-brutal Russian campaign in Chechnya, in order to continue fighting their war on terror.

Yet, terrorism continues to grow. Islamic terrorist networks have arisen throughout the Caspian Sea Region, where before they did not exist, many claiming an affiliation to Al-Qaeda. The Russians have seen the rise of violent attacks not just in Chechnya but also in the Caucasus Republic of Dagestan. Most of these on-going confrontations are the result of a spill over of the conflict in Chechnya.

Competition in the region continues, but cooperation between Russia and the United States in order to wage their respective wars, has tamed economic market maneuvering for a time.

The second Great Game is well underway but unlike the first it is much more complicated. In the first competition for power, there were only two empires fighting for influence; today there are multiple countries both large and small vying for control of the region.

The stakes are also much higher. Winning control of the region would not only bring great economic wealth, but it would also stabilize an area vulnerable to Islamic terror networks. This second Great Game being fought along the ethno-religious fault-line of the Caspian Sea has yet to be decided.

The Caspian jigsaw will be a difficult one to piece together, and for a while, the future of its inhabitants will remain uncertain.

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