The new Great Game

East and west are jockeying for influence in the Caucasus. The prize is oil and gas

Richard Norton-Taylor
Monday March 5, 2001
The Guardian

A new and potentially explosive Great Game is being set up and few in Britain are aware of it. There are many players: far more than the two - Russia and Britain - who were engaged a century ago in imperial rivalry in central Asia and the north-west frontier.

And the object this time is not so much control of territory. It is the large reserves of oil and gas in the Caucasus, notably the Caspian basin. Pipelines are the counters in this new Great Game.

There are plans for pipe-lines through Azerbaijan, Georgia, Turkey, Iran, Bulgaria, Macedonia - and Albania. Traditional rivalries between east and west are complicated by other threats - from Chechen separatists, Kurds, Albanian guerrilla groups, the dispute between Azerbaijan and Armenia over Nagorno-Karabakh and, throughout the region, Islamic groups whose activities are causing deep concern to Moscow, Tehran and Washington alike.

"In addition to instability and conflict in the Caucasus and parts of central Asia, there is a longer-term fear that Russia may rebuild its military capabilities, perhaps under a strongly nationalist regime," notes Paul Rogers, professor of peace studies at Bradford University, in his recent book, Losing Control. Such a fear he adds, "rarely recognises the significance of a near-endemic Russian perception that Nato expansion and US commercial interests in the Caspian basin are part of a strategic encroachment into Russia's historic sphere of influence".

This is the region both west and east have their eyes on. It is rich in untapped oil and gas while US reserves are running down, China is desperate for more oil, and no one outside the Gulf wants to rely on Saudi Arabia, Kuwait or Iraq - which have the biggest oil reserves.

Oil is the bait as the US, Russia, Turkey, Iran - and Nato - jockey for alliances, power and influence in this highly combustible but, for most people, little-known, region.

The EU is now getting in on the act. "The European Union cannot afford to neglect the southern Caucasus. Georgia, Armenia and Azerbaijan form a strategic corridor linking southern Europe with central Asia," Chris Patten, the European external relations commissioner, and Anna Lindh, the Swedish foreign minister, told Financial Times readers last month before the first high-level EU visit to the region. "There is perhaps as much oil under the Caspian sea as under the North sea and a huge amount of gas there and in central Asia - good news for energy-hungry Europe," they said.

Soon after the EU visit, Georgia's president, Eduard Shevardnadze, welcomed European and US support for the "Great Silk Road idea". The plan, backed by Washington and American oil companies, including Chevron, is for a pipeline taking Turkmenistan and Kazakh oil to Baku, the Azerbaijani capital, through Tbilisi, the Georgian capital, and through eastern Turkey to the Mediterranean port of Ceyhan.

Russia is desperate to maintain oil flows through its territory. Iran wants a pipeline running from the Caspian due south. China wants one going due east.

There is also a plan, backed by the US, for a pipeline running from the Bulgarian Black sea port of Burgas through Macedonia to the Albanian Adriatic port of Vlore. The idea is for Caspian oil to be shipped to Burgas by tanker from the Black sea ports of Novorossiysk in Russia and Supsa in Georgia.

A feasibility study for this ambitious project - due to be operational by 2005 - is being undertaken by Ambo, a company registered in the US, with, say the Bulgarians, the support of Texaco, Chevron, Exxon Mobil, BP Amoco, Agip and TotalElfFina. It is "very probable" the project will go ahead, a Bulgarian spokesman said last week. It is a "safer" way to take the oil.

While the US and Nato - and now the EU - hold out the prospect of untold wealth for the Caucasian states of the former Soviet Union, the west will also have an important economic stake in Albania and Macedonia. The US already seems to take the view that all Serbs are bad and all Albanians good. The implications for Kosovo, a Serbian province with an overwhelming ethnic Albanian population, and for Macedonia, with armed groups from Kosovo stirring up trouble among the ethnic Albanian population, are potentially immense.

The fight over pipeline routes involves gas as well as oil. Russia wants to supply gas to Turkey; as does Iran, Russia's ally against the Taliban in Afghanistan and a country Russia is supplying with nuclear know-how.

For Britain there is an added factor in this jigsaw puzzle of rivalries and alliances. By 2020, the Ministry of Defence noted in a recent report on the "future strategic context for defence", the UK could be importing 90% of its gas supplies. "The main source of supply," it added, "will include Russia, Iran, and Algeria." Iran's gas reserves, say analysts, are second only to Russia's.

"All options are on the table", says the Foreign Office, adding that Britain has no problem from the "political point of view" with Iran's oil pipeline plan. Watch this space.

richard.norton-taylor@guardian.co.uk
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