Oil drives peacemaking efforts in Caucasus

By Gwynne Dyer

LONDON (JP): It's been a good month for peace in the Caucasus, and that means it's been a good month for oil. Indeed, it's the oil that's driving the peacemaking.

On Aug. 14, Russian Foreign Minister Yevgeni Primakov personally escorted Vladislav Ardzinba, leader of the breakaway republic of Abkhazia, to Tbilisi to sign a 'declaration of peace' with Georgia. The declaration neither recognizes the mostly Moslem mini-state's secession from Georgia nor allows the return of the 250,000 Georgian refugees who fled Abkhazia during the independence war of 1992-1993, but it forestalls a new round of fighting.

Four days later, in Moscow, President Aslan Maskhadov of Chechnya signed a peace treaty with Russian President Boris Yeltsin, formally ending the war that Yeltsin launched in 1994 to crush Chechen independence. Russia still hasn't recognized the Moslem republic's independence -- Chechnya's final status will only be settled in 2001 -- but the treaty guarantees that a new war there won't disrupt the oil business in the meantime.

The 1994 cease-fire between Armenia and Azerbaijan is also holding, so the Caucasus is now safe for the large-scale movement of oil. Just in time, as the first oil from the new oil-fields in the Caspian Sea will come ashore in Azerbaijan within a month.

There have been oil wells around Baku since the early 1900s, but the huge offshore discoveries in the Chirag and Azeri fields, plus the vast new Tengiz oil-field in Kazakhstan and the enormous natural gas reserves found in both Kazakhstan and Turkmenistan in recent years, make the region the hottest oil patch in the world.

"The Caspian and Kazakh basins are going to be the major source of world energy in the 21st century," said an official of the U.S. National Security Council two years ago. "The reserves are up there with the Persian Gulf." So control of the pipelines that bring these resources to the rest of the world becomes a matter of great importance.

All the newly oil-rich countries around the Caspian Sea were once part of the Soviet Union, and all existing pipelines run north through Russia. The first of the new offshore oil from Azerbaijan will move through a pipeline that passes through Chechnya to Novorossisk on the Black Sea, and thence by tanker to the rest of the world. (This pipeline was badly damaged in the war in Chechnya, but Moscow promises to have it repaired by October).

Similarly, the first oil from Kazakhstan's Tengiz field is flowing through Russian pipelines to the Black Sea, or else west to Europe via Ukraine and Russia. But this Russian monopoly pleases nobody else, partly for strategic reasons, but also because Moscow deliberately restricts the oil flowing through its pipelines to ensure that all of its own production is sold first.

Now, the simplest way to avoid Russia is to send the new Caspian oil and gas straight south across Iran to the Persian Gulf. Just last May, indeed, Tehran revived an offer to build a pipeline from the Tengiz oilfield to the deep-sea port of Bandar Abbas on the Gulf. But this option is completely anathema to Washington.

One consequence of the obsessive U.S. hostility to Iran was the plan for a gas pipeline from Turkestan across Afghanistan to the large market in Pakistan (and perhaps eventually India as well). This led to the grotesque result of clandestine U.S. support for the Taliban movement in Afghanistan.

The Taliban are fanatics who seek to impose their extreme version of Islam on all Afghans, forcing men to grow beards and denying jobs and education to women. But as Sunni fanatics, they are deeply hostile to Shia Iran -- and that makes them de facto U.S. allies. However, their recent defeats in northern Afghanistan probably foreclose the prospect of a trans-Afghan pipeline.

The best non-Iranian alternative, from the U.S. point of view, would be one or more pipelines to take oil and gas from Kazakhstan, Turkmenistan, and Azerbaijan west across the Caucasus region to world markets. But at this point the plot thickens.

Washington's preferred route involves a big new pipeline through Georgia, then south-west across Turkey to Ceyhan on the Mediterranean, even though this would be an extremely long route crossing several major mountain ranges. Moscow, obviously, prefers further pipelines across Chechnya and Russia to Novorossisk.

The compromise they reached in 1995 was to build a second pipeline straight west across Georgia (the shortest route) to the Georgian port of Supsa on the Black Sea. That one is supposed to be ready by the end of next year. But there remains the question of where the third and biggest pipeline will go.

The U.S. and Turkey still back Ceyhan. Moscow wants the third pipeline on Russian soil, but once again would probably settle for running it across Georgia (where there are still Russian troops). That's what Russia's recent burst of peace-making in Chechnya and Abkhazia was really about -- but will the peace deals stick?

Yeltsin's war against Chechnya killed 80,000 people and almost leveled the country, but the Chechens decisively defeated the Russian army in open battle. Yeltsin has postponed formal Russian recognition of Chechnya's secession until 2001 (when he is safely retired), but there will probably be no more fighting there -- and the Tbilisi deal has now put the Abkhaz problem on ice too.

There are only 100,000 Abkhazes, and Russia holds the key to their fate. The non-Abkhaz majority, mostly Georgians, was driven out in 1992-1993 by 'ethnic cleansing' tactics as brutal as those of the Bosnian Serbs -- but the Abkhaz separatists then had lavish Russian support.

That stopped once Moscow faced its own war of secession in Chechnya. Russia now keeps Abkhazia on a short leash: there is a partial economic blockade, and Abkhaz men are not allowed to travel. Moscow hasn't sold Abkhazia out completely yet, as it is useful leverage on Georgia -- but Abkhaz leader Vladislav Ardzinba was frog-marched to Tbilisi last week for a 'declaration of peace'.

Renewed war on the third major front, between Azerbaijan and Armenia, is also unlikely until the former recovers from its total defeat in the 1988-1994 war. Armenia holds one-fifth of Azerbaijan's territory (including the traditionally Armenian- populated enclave of Nagorno-Karabakh), but it will take many years of oil revenues before the Azerbaijan army is again ready to take on the Armenians.

So there will be peace in the Caucasus for the moment, and soon the oil will flow. Later on there will be at least one war (an Azeri attempt to retake their lost lands), and maybe another (a Georgian reconquest of Abkhazia), but in neither case would the fighting endanger existing pipelines.

And the third pipeline? That will probably follow the route of the second across Georgia to the Black Sea, as a compromise between the politically fraught Russian route and the very costly Turkish route. But one way or another, the oil will get out.