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AZERBAIJAN FRUSTRATES RUSSIA'S BID TO CONTROL CAUCASUS ENERGY GRID - REPORT
EurasiaNet, NY
March 14 2006
Azerbaijan has played a key role in frustrating Russia's efforts
to control energy export routes in the Caspian Basin, a new report
states. Moscow, however, continues to probe for new ways to gain an
advantage in the regional contest for energy dominance.
The report, released recently by the London-based organization Global
Market Briefings, suggests Azerbaijani President Ilham Aliyev's
natural inclination is to look to the West for help in developing
the country's natural resources. While Russian-Azerbaijani relations
have improved markedly in recent years -- a fact underscored by the
late February visit to Baku by a large Russian delegation headed
by President Vladimir Putin -- the report indicates that ties are
strengthening more for tactical, rather than strategic reasons. [For
background see the Eurasia Insight archive].
"Aliyev's seemingly growing ties with Russia only derive from the
insecurity of his own power base and from his desire to satisfy Russia
in order to prevent the Kremlin from meddling in Azerbaijani internal
affairs," the report states. "On a more strategic level, Azerbaijan
seeks to preserve a balance in its foreign policy between the West
and East, and most likely it will continue to do so in the future."
Following Putin's rise to the presidency in 2000, Russia made
determined effort to gain control of the energy infrastructure in the
Caucasus. The Putin administration used Russian energy conglomerates,
including Rosneft, Gazprom and RAO Unified Energy Systems (UES), to
gobble up energy assets in Armenia, Azerbaijan and Georgia with the
aim of "placing the Caucasus republics into a position of economic,
and thus political dependence on Russia," the report stated.
The Russian strategy was least effective in Azerbaijan, where officials
treated "proposals from Kremlin-controlled Russian energy companies
gingerly." Even so, several Russian companies, including Gazprom
and UES have managed to establish a presence in the Azerbaijani
market. [For additional information see the Eurasia Insight archive].
After gaining significant shares in the energy sectors of both
Armenia and Georgia, Russian companies redoubled their takeover
efforts in Azerbaijan, seeking to close the last remaining "free link
in the Caucasus." Relying on its potential oil wealth, Azerbaijan
managed to resist the Russian pressure. The inauguration of the
Baku-Tbilisi-Ceyhan pipeline in 2005 marked the turning point in
Azerbaijan's effort to secure its energy independence, said the report,
which is titled Russia's Energy Interests in Azerbaijan.
"Azerbaijan, which presently buys gas and electricity from Russia,
feels confident that its own increasing oil and gas output will soon
make it free from energy dependence on the Russian Federation," the
report said. It added that the completion of the Baku-Tbilisi-Erzurum
pipeline, scheduled for later this year, could help Georgia reduce
its near-total reliance on Russia for natural gas. "The launch of BTC
was a significant blow to Russia's attempt to take over the energy
network in the South Caucasus and thus exert political influence over
Azerbaijan and Georgia," the report said.
BTC's opening hasn't prompted Russia to abandon its goal of dominating
the regional energy game, although it did force a tactical shift. As
Putin's February visit showed, Russia remains interested in penetrating
Azerbaijani markets. However, Moscow's appears to be placing greater
emphasis now on Kazakhstan and, more broadly, dominance of the Caspian
Basin's security system.
Kazakhstan possesses the largest share of regional reserves,
and thus is widely viewed as the key to the energy game. President
Nursultan Nazarbayev's administration has cagily pursued a so-called
multi-vectored policy that seeks to play Russia, China and the United
States off against each other to Kazakhstan's maximum benefit.
Accordingly, Kazakhstan has kept its export options open.
In recent years, Russia has sought to discourage Kazakhstani
participation in BTC. "Russia has decided to do its best to prevent
the transportation of Kazakh oil through the BTC pipeline," the GMB
report said. Over the same period, US and Azerbaijani officials have
pressured Kazakhstani leaders to join the BTC project. Some estimates
say Kazakhstani use of BTC is needed to ensure the pipeline's economic
viability. Kazakhstani officials have given oral assurances that Astana
will export an undetermined volume of oil via BTC, but negotiations on
a formal deal are continuing. Visiting Astana on March 14, US Energy
Secretary Samuel Bodman called on the Nazarbayev administration to
hasten efforts to resolve the "technical details" that are holding
up Kazakhstan's participation in BTC. [For background see the Eurasia
Insight archive].
With Kazakhstan's involvement increasingly likely, Russia is pursuing
a policy designed to diminish the United States' strategic presence
in the Caspian Basin. During a March 14 meeting of the working
group on finalizing Caspian Sea territorial issues, Russian Foreign
Minister Sergei Lavrov repeated calls to prohibit the stationing of
outside military forces in the Caspian Basin. Moscow has promoted the
creating of a joint naval force, dubbed CASFOR, comprising personnel
and vessels from the Caspian littoral states, Azerbaijan, Kazakhstan,
Iran, Russia and Turkmenistan.
The Caspian working group is striving to break the existing stalemate
in the effort to determine the sea's territorial boundaries. [For
background see the Eurasia Insight archive]. Lavrov noted that "the
majority of provisions have been coordinated" for the envisioned
Caspian convention, the RIA Novosti news agency reported. Lavrov went
on to express hope that a breakthrough could be achieved "in the next
few days."
From: Emil Lazarian | Ararat NewsPress
EurasiaNet, NY
March 14 2006
Azerbaijan has played a key role in frustrating Russia's efforts
to control energy export routes in the Caspian Basin, a new report
states. Moscow, however, continues to probe for new ways to gain an
advantage in the regional contest for energy dominance.
The report, released recently by the London-based organization Global
Market Briefings, suggests Azerbaijani President Ilham Aliyev's
natural inclination is to look to the West for help in developing
the country's natural resources. While Russian-Azerbaijani relations
have improved markedly in recent years -- a fact underscored by the
late February visit to Baku by a large Russian delegation headed
by President Vladimir Putin -- the report indicates that ties are
strengthening more for tactical, rather than strategic reasons. [For
background see the Eurasia Insight archive].
"Aliyev's seemingly growing ties with Russia only derive from the
insecurity of his own power base and from his desire to satisfy Russia
in order to prevent the Kremlin from meddling in Azerbaijani internal
affairs," the report states. "On a more strategic level, Azerbaijan
seeks to preserve a balance in its foreign policy between the West
and East, and most likely it will continue to do so in the future."
Following Putin's rise to the presidency in 2000, Russia made
determined effort to gain control of the energy infrastructure in the
Caucasus. The Putin administration used Russian energy conglomerates,
including Rosneft, Gazprom and RAO Unified Energy Systems (UES), to
gobble up energy assets in Armenia, Azerbaijan and Georgia with the
aim of "placing the Caucasus republics into a position of economic,
and thus political dependence on Russia," the report stated.
The Russian strategy was least effective in Azerbaijan, where officials
treated "proposals from Kremlin-controlled Russian energy companies
gingerly." Even so, several Russian companies, including Gazprom
and UES have managed to establish a presence in the Azerbaijani
market. [For additional information see the Eurasia Insight archive].
After gaining significant shares in the energy sectors of both
Armenia and Georgia, Russian companies redoubled their takeover
efforts in Azerbaijan, seeking to close the last remaining "free link
in the Caucasus." Relying on its potential oil wealth, Azerbaijan
managed to resist the Russian pressure. The inauguration of the
Baku-Tbilisi-Ceyhan pipeline in 2005 marked the turning point in
Azerbaijan's effort to secure its energy independence, said the report,
which is titled Russia's Energy Interests in Azerbaijan.
"Azerbaijan, which presently buys gas and electricity from Russia,
feels confident that its own increasing oil and gas output will soon
make it free from energy dependence on the Russian Federation," the
report said. It added that the completion of the Baku-Tbilisi-Erzurum
pipeline, scheduled for later this year, could help Georgia reduce
its near-total reliance on Russia for natural gas. "The launch of BTC
was a significant blow to Russia's attempt to take over the energy
network in the South Caucasus and thus exert political influence over
Azerbaijan and Georgia," the report said.
BTC's opening hasn't prompted Russia to abandon its goal of dominating
the regional energy game, although it did force a tactical shift. As
Putin's February visit showed, Russia remains interested in penetrating
Azerbaijani markets. However, Moscow's appears to be placing greater
emphasis now on Kazakhstan and, more broadly, dominance of the Caspian
Basin's security system.
Kazakhstan possesses the largest share of regional reserves,
and thus is widely viewed as the key to the energy game. President
Nursultan Nazarbayev's administration has cagily pursued a so-called
multi-vectored policy that seeks to play Russia, China and the United
States off against each other to Kazakhstan's maximum benefit.
Accordingly, Kazakhstan has kept its export options open.
In recent years, Russia has sought to discourage Kazakhstani
participation in BTC. "Russia has decided to do its best to prevent
the transportation of Kazakh oil through the BTC pipeline," the GMB
report said. Over the same period, US and Azerbaijani officials have
pressured Kazakhstani leaders to join the BTC project. Some estimates
say Kazakhstani use of BTC is needed to ensure the pipeline's economic
viability. Kazakhstani officials have given oral assurances that Astana
will export an undetermined volume of oil via BTC, but negotiations on
a formal deal are continuing. Visiting Astana on March 14, US Energy
Secretary Samuel Bodman called on the Nazarbayev administration to
hasten efforts to resolve the "technical details" that are holding
up Kazakhstan's participation in BTC. [For background see the Eurasia
Insight archive].
With Kazakhstan's involvement increasingly likely, Russia is pursuing
a policy designed to diminish the United States' strategic presence
in the Caspian Basin. During a March 14 meeting of the working
group on finalizing Caspian Sea territorial issues, Russian Foreign
Minister Sergei Lavrov repeated calls to prohibit the stationing of
outside military forces in the Caspian Basin. Moscow has promoted the
creating of a joint naval force, dubbed CASFOR, comprising personnel
and vessels from the Caspian littoral states, Azerbaijan, Kazakhstan,
Iran, Russia and Turkmenistan.
The Caspian working group is striving to break the existing stalemate
in the effort to determine the sea's territorial boundaries. [For
background see the Eurasia Insight archive]. Lavrov noted that "the
majority of provisions have been coordinated" for the envisioned
Caspian convention, the RIA Novosti news agency reported. Lavrov went
on to express hope that a breakthrough could be achieved "in the next
few days."
From: Emil Lazarian | Ararat NewsPress