Thursday, May 26, 2005


By Daniel Howden and Philip Thornton

The first drops of crude will snake their way along a pipeline that traverses some of the most unstable and war-ravaged countries on Earth. This is the oil flow that was meant to save the West, and last night the taps were to be turned on.

The 1754km Baku-Tbilisi-Ceyha pipeline has transformed the geopolitics of the Caucasus and its impact is now being felt in Central Asia.

Output is supposed to reach one million barrels a day - more than 1 per cent of the world�s total production - from an underground reserve that could hold as many as 220 billion barrels.

Its architects and investors claimed the pipeline would shore up energy supplies in the US and Europe for the next half century.

The goal of the project which makes its tortuous way from the shores of the Caspian in Azerbaijan, through Georgia to the Mediterranean coast of Turkey is to ease the West�s reliance on the Organisation of Petroleum Exporting Countries.

The pipeline threads its way through the region in a seemingly modest private corridor only 50m wide but nothing has been allowed to stand in its way. Everything from primary forests to labour laws and endangered species to democracy protesters have given way to the costliest pipeline ever built.

The project, known as BTC, has driven a wedge between the US and Russia, triggered political unrest in the countries it passes through and their neighbours, and sparked concern at extensive damage to the environment.

Since the September 11, 2001, terrorist attacks in the US concern at the West�s dependence on Gulf oil has intensified.

For Washington the opening is a cause for celebration. "We view this as a significant step forward in the energy security of that region," said Samuel Bodman, the US Energy Secretary, who was to stand next to the three heads of state at a ceremony marking the milestone.

Standing next to him at the pumping station controls was to be the President of the tiny former Soviet republic of Azerbaijan.

The BTC has allowed Ilham Aliev to become a firm friend of the West while overseeing a Government condemned for human rights abuses and corruption.

The politics of the pipeline have also changed the face of Georgia, where the battle for control with Russia saw immense US influence deployed in support of the so-called "Rose Revolution".

The popular protest ushered the American-educated Mikhail Saakashvili into power two years ago. Washington�s new ties with Tbilisi were amply demonstrated when George W. Bush became the first US President to visit the country this month.

When big oil companies turned their attentions to the potential Caspian energy reserves released from behind the collapsing walls of the Soviet Union the region was billed as the "new Middle East".

If only the reserves could be securely transported from the landlocked sea to the Mediterranean, the West would be gifted an alternative to the volatile Gulf and the region would be freed from the iron grip of Russia.

Once the Soviet empire fell the Caspian found itself surrounded by five nations states - Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan. Three rival plans to exploit the reserves were drawn up - a northern route through Russia, a southern alternative through Iran and the central option through the Caucasus to the Mediterranean.

The winner could be in little doubt: the middle road was the only one that guaranteed Washington a corridor of control.

US Vice-President Dick Cheney, who was then chief executive of oil services giant Halliburton, was among the first to be swept away in the excitement. "I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian," he said in 1998.

Now, more than a decade and US$4 billion ($5.6 billion) later, the pipeline is open. But this chapter of what Rudyard Kipling called the "Great Game" - the secret battle to dominate central Asia - has only reached the end of its first phase.

The fanfare at British oil giant BP�s gleaming new terminal at Sangachal in Azerbaijan may yet prove to be premature.

Stripped of the hype of the 1990s, the crude that began a very modest flow is the first instalment of a reserve many analysts now believe is only 32 billion barrels. The game now moves to the trans-Caspian pipeline and to the immense plains of Turkmenistan and the political cauldron of Uzbekistan, Afghanistan and beyond.


No comments: