Baku-Ceyhan pipeline

[Reza_Rahmani]

Construction of the Baku-Ceyhan oil pipeline has finally begun. Last week, U.S. Energy Secretary Spencer Abraham joined the presidents of Azerbaijan, Georgia and Turkey, over whose territory the pipeline will cross, at a ground-breaking ceremony in Sangachal, 25 miles south of Baku, Azerbaijan’s capital.

When completed, the pipeline from the Baku area to the Turkish Mediterranean port of Ceyhan is expected to reduce the U.S. and Western European nations’ dependence on Persian Gulf exports and Russian pipelines. The 1,091-mile pipeline, to be operated by BP, will carry Caspian energy resources, the world’s third largest, to a Turkish port en route to Western markets.

Construction of the pipeline, estimated to cost about $3 billion, is to be completed by early 2004, and the first oil is expected to flow through it a year later. About 349 million to 421 million barrels of oil are expected to move through the pipeline annually and could generate $100 million a year to the regions through which it passes.

V. Putin would like to keep oil prices above $30.00 per barrel indefinitely. This is at the heart of his opposition to an Iraq under US dominion. I imagine that this pipeline will need some extraordinary security deployments.

Reza

[Stelios]

[I found this from a usenet post and I do not have URL.]

Writing in daily RADIKAL (18.09.02) under the title "The Critical
Truth and the Caucasus" Murat Yetkin refers to strategic balances in
Caucasus.

The full text is the following:

"The Baku-Tbilisi-Ceyhan oil pipeline that will carry the Caspian oil
to the world markets set off in the midst of the Iraqi crisis -- a
crisis that is closely related to the Middle Eastern oil. After waging
a 10-year commercial and diplomatic struggle, Azerbaijani, Georgian,
and Turkish presidents Aliyev, Shevardnadze, and Sezer will finally be
able to launch this project.

As of 2005, when it will be operational, the 1730-kilometer pipeline
will annually carry 50 million tons of Caspian oil to the Ceyhan Port
that is located along the Mediterranean. There is no doubt that with
its current capacity, this pipeline constitutes no alternative to the
Iraqi or the Middle Eastern oil. This is the first time, however, that
an oil pipeline and an outlet that are not under the control of the
Arabs or the Russians and that are being physically secured by the
United States and its allies have been established. The fact that
Ceyhan is very close to the Incirlik Airbase, one of the United
States' largest operational centers in the world, has played an
important role in the realization of this project.

Despite the fact that for the time being adequate emphasis is not
being put on Ceyhan, we have to admit that it is a very important
outlet. As a matter of fact, Ceyhan constitutes the outlet of two
additional pipelines. Two pipelines that carry the Iraqi oil from
Mosul and Karkuk end in Ceyhan. Currently Iraq is the second richest
country in the world in terms of oil fields. The first country is
Saudi Arabia. The star of the Iraqi oil is the oil fields in Karkuk --
and not in the Basra. The quality and the quantity of the oil in
Karkuk are very high. Furthermore, the oil in Karkuk is very close to
the surface. In other words, compared to the other oil fields, the
cost of the Karkuk oil is low. Due to the embargo and within the
framework of the United Nation's oil in return for food program only
enough oil to prevent the Karkuk oil fields from drying flows through
the Karkuk-Ceyhan line. The fact that Iraq did not allow the UN weapon
inspectors to conduct inspections in its territories until yesterday
constituted the greatest obstacle that prevented the removal of the
embargo. The day before yesterday however, UN Secretary General Kofi
Annan announced that a letter has been received from Iraq, saying that
the Baghdad Administration "unconditionally" allows the inspectors to
conduct inspections in its territory. Similarly to Turkey, a great
number of European countries viewed this as a positive development.
The US Administration, on the other hand, viewed this as a new tactic
that resembles Iraq' former tactics.

This once again proves that the US Administration is determined to hit
Iraq.

Ankara, which sees preventing a military operation against Iraq as its
primary goal and which has been making efforts to this end for months,
knows that it cannot remain neutral and impartial in the face of such
an attack that will be launched by its closest ally. Foreign Minister
Gurel said to the US delegation that visited Ankara a while ago: "If
we are your strategic partners and if we will be at your side in Iraq,
you should support us against the EU regarding the Cyprus issue." The
fact that the written statement that was issued after Prime Minister
Ecevit talked to UN Secretary General Kofi Annan on the evening of 16
September put emphasis on Iraq and Cyprus is also very meaningful.

There is yet another country that demands the support of the United
States in return for its support in Iraq: This is Russia. Turkey is
trying to prevent an intervention against Iraq. Keeping in mind that
it might not be possible to prevent such an intervention, however,
Turkey is also making efforts to prevent the establishment of Kurdish
or a Shiite state. Russia, on the other hand, has demands related to
the armed Chechnyan groups that are positioned in the Pankisi Valley
in Georgia. Exploiting the lack of supervision, Turkey had pursued the
PKK [Workers Party of Kurdistan] in the Iraqi territory -- for example
in the Hakurk Valley. Russia wants to do the same thing in Georgia. To
this end, Russia is presenting as evidence the US intelligence reports
to the effect that the Chechnyan groups cooperate with the AL Qai'da
militants who have escaped Afghanistan in the Pankisi Valley. Giving a
speech on terrorism on 11 September, Putin issued a warning. Following
this speech the tension further intensified. Despite the fact that
Russia's warning was issued after signing a $40 million oil agreement
with Iraq, we should not forget that Russia also wants to remain as
close as possible to the Caspian oil basin.

Not being able to control its territory, the Georgian Administration
is quite distressed. Despite the fact that it has deployed additional
troops to the region following the Russian warning, the Georgian
Administration also drew attention to the fact that Russia has issued
this warning just prior to the ceremony of the Baku-Tbilisi-Ceyhan
project. As a matter of fact, Shevardnadze even tried to cancel his
participation in the ceremony in Baku on this basis.

Ankara is closely following this issue. Turkey has military observers
in the region. Furthermore, Ankara has agreements both with Azerbaijan
and Georgia. The United States constitutes the third axis in these
agreements. Within the framework of these agreements, the US soldiers
positioned in Georgia constitute the guarantee of Turkey and, in fact
that pipeline. On the other hand however, the United States is not
expected to take any steps that will prevent Russia from "fighting
against terrorism." In this regard, the tension might further
intensify in the region."

[Reza_Rahmani]

It is easy to conclude that the Putin regime is actually against a U.S.-U.K. strike at Iraq for the following reasons:

1. Moscow has, in Iraq, new projects and old debts totaling at least $40 billion and doesn't want to put them at risk.

2. Even more important, Moscow is against actually solving the Iraqi problem as well as easing Middle East tensions because the present situation provides Russia with an approximate $10 "war premium" per each barrel of exported oil and oil products. The same is true, though in less degree, for natural gas, the other major Russian export item. Moscow would be eager to preserve the present unstable situation indefinitely.


How would Moscow react to a U.S.-U.K. strike at Iraq?

1. Various diplomatic-propaganda measures (no need to elaborate).

2. Probably additional weapon supply to Iraq (mostly in the weeks directly preceding the strike) via Belarus and Ukraine.

3. Upgraded cooperation with China, Iran, North Korea and other countries hostile to America. By the way, on Oct. 10, the Tokyo-based Asahi Shimbun newspaper reported on joint maneuvers of the Russian Pacific Fleet and the North Korean navy, to be held in November.

4. Very probably, a "tit-for-tat" strike in Georgia – to terminate the construction of the Baku-Ceyhan oil pipeline (this project is the only real factor in the recent deterioration in Russian-Georgian relations) and to establish a new hotbed of instability, preventing the fall of world oil and gas prices.

5. Some other "instability-increasing actions" (cautiously speaking, similar to the apartment explosions in Moscow in September 1999) in former Soviet republics and far abroad are not out of the question.

[Stelios]

George Caffentzis, a Greek-American autonomist Marxist has a written a very sophisticated anaylsis of the geopolitics surronding Iraq back in 1998 which can be read here:

http://www.midnightnotes.org/pamphlet_usiraq.html

... "The Iraqi government's insistence on specific terms in the interpretation of the accords came from its desire to maintain at least a shred of sovereignty. It wanted the terms of the accord to be open to negotiation at each turn in the story and the story itself to have a temporal limit that would lead to the end of sanctions."

"The US government, on the other hand, claims the right to carry on an absolute surveillance over the entire Iraqi territory, for an indefinite span of time, and wants the absolute right to control and destroy any possible means that might lead to the development of weapons of mass destruction and their delivery. This demand is tantamount to requiring that the Iraqi nation becoe a pre-industrial colony producing crude oil, at best. For, as we have learned from the ecological movement, almost any industrial development is either a potential weapon of mass destruction, or allows for the development of such weapons. For example, any petro-chemical industry makes chemical weapons possible; any aero-space industry makes delivery vehicles possible; any bio-engineering or pharmaceutical industry makes biological weapons possible. What the US is, in fact, demanding is the elimination not only of Iraqi sovereignty but the total control over of its future industrial development, if not the total destruction of its industrial capacity." ...

... "A key to understanding the present situation is to realize that the Iraqi government has managed to face seven years of total military surveillance and economic sanctions without capitulating completely to the military subordination and economic dependence that US has demanded of the states in the region. The Iraqi state is still insisting on some control over the nation's resources and its independent entrance as a seller into the global oil market. For example, the Iraqi state has made major deals with a number of non-US oil companies to bring them into the joint development of oil fields in Iraq once the sanctions are lifted. These deals involve French companies like Elf Aquitaine and Total SA (involving fields of 12.5 billion barrels) and Russian companies like Lukoil, Zabrubezneft and Mashinoimport (involving fields of 7.5 billion barrels). The only companies left out of the oil exploration bonanza when sanctions are lifted will be US-based, unless the Saddam Hussein regime is somehow persuaded otherwise (Wall Street Journal 2/23/98: A17)."

"The economic situation now is the inverse of what it was during the 1991 Gulf War. In 1990, Iraqi authorities were the primary oil price hawks in OPEC. They were calling for $25 per barrel and one of their official reasons de guerre was that Kuwait was violating its OPEC quota and depressing the price of oil. In 1998 Iraq is objectively not a force for higher oil prices. In fact, the full return of Iraqi oil into the international oil market would substantially lower oil prices. In 1994, the Clinton Administration estimated that, with the full lifting of sanctions, a return of Iraqi oil on the world market would depress prices by almost 50% and there is no reason to believe that this estimate does not hold any longer today. Such a price collapse would be especially problematic for the world petroleum corporations in a period when they believe that there are new, profitable large-scale investments to be made in oil exploration and development (especially in the former non-Russian Soviet republics), but at the same time they face a decline in short-term demand because of the "Asian Crisis" (Beck 1998). Such a price collapse would also undermine the present control structure of OPEC (where Saudi Arabia, a US client state, is king-pin), and would devastate the capitalists of the local "oil patch" in Texas and Louisiana. These are no small losers in the short-run, and they have tremendous power with the US government." ...

"The Russian government is also deeply concerned, as indicated by Yeltsin's remark that a US attack on Iraq could trigger "World War III" (NYT 2/5/98). The planned attack on Iraq is an attack on its future as well--it puts an end to the hope that the Russian state and capital may draw some benefit from liberalization and that the oil resources of the previous Soviet Union will not be monopolized by US and English oil companies. With the intensification of its strategy of tension, the US state is telling its Russian colleagues that their management of oil resources must comply with the its schemes or else." ...