Robert M. Cutler on Energy and Eurasia

With the dismantlement of the inherited Soviet nuclear arsenal now under way, it is the apparent lack of well defined long-term goals (apart from "stability") that largely account for Washington's inability to clarify the nature of its engagement in Central Asia, leading it to deal with immediate issues (such as the Tajikistan situation) on a piecemeal basis. There are, however, at least two key areas of central Asian concern (not counting the burgeoning drug trade or the Tajikistan civil war) that directly engage "vital" U.S. interests. These areas are nuclear nonproliferation and energy security.

Корреспондент "НГ" Игорь Ротарь в своей статье "Чеченские проекты получают международную поддержку" обратил внимание на новые аспекты кавказской политики, значение которых трудно переоценить. Речь идет об инициативах одного из чеченских лидеров Хожахмеда Нухаева по созданию "Общего рынка Кавказ - Евразия", способного лишить Россию монополии на транспортировку каспийской нефти. Дело в том, что и самому мне неоднократно доводилось выступать с аналогичными предложениями - например, в январе 1995 г. на международной конференции, организованной администрацией президента Финляндии совместно с Институтом мировой политики (Нью-Йорк) и МГИМО, собравшей представителей высокого уровня из почти всех новых государств Евразии, в октябре этого года - в Вашингтоне, на международной конференции, поддержанной IREX и неправительственным Национальным бюро азиатских исследований. В 1996 г. в Tбилиси вышла моя статья на ту же тему в научно-политическом журнале "Кавказские рeгиoнaль-ныe исследования". В ней я защищал проект создания евроазиатской нефтяной и газовой ассоциации, или EAOGA.

Invited Speech to the Plenary Session "Caspian Sea Resources", Monaco Summit on Energy (Crans Montana Forum in Monaco sponsored by UNIDO).

The new year has already established two new trends in Caspian Sea geo-economics as well as confirmed an old one. Two important new trends are an improvement in Turkmenistan's finances and the refusal of the Baku-Ceyhan pipeline to vanish from the drawing board. The old trend, which is accentuated, is Iran's economic isolation.

When Nursultan Nazarbaev was re-elected president of Kazakhstan earlier this month, there was little surprise in the West and some disappointment. The disappointment was not that he won the election—the result was never really in doubt—but rather that he held the election at all, on short notice and ahead of schedule.

In March, the private U.S. consulting firm Legal Technical & Advisory Services will hold a training session for energy officials from Turkmenistan, Uzbekistan and Kazakhstan. This high-level, hands-on seminar will focus on legislation, policy and regulations of the oil and gas sectors. A particular advantage will be the simultaneous presence of leading officials from the three most important energy-producing countries in Central Asia.

A prospective loosening of investment controls by the OPEC states, formerly most concerned to constrain foreign direct investment, makes it likely that at least some attention will be diverted from the Caspian region to the Arabian peninsula. Both Saudi Arabia and Kuwait have publicized their intentions of allowing international energy companies to acquire equity stakes in developing prospective new fields on the peninsula. However, this does not necessarily mean that the international energy companies will cease operations in the Caspian.

Iran, Iraq, and Turkey continue to dominate energy developments in Southwest Asia. Current events make it imperative to assess the state of play in the region as a whole. This week's column analyzes the significance of recent developments for the former Soviet area.

The military operations in the Balkans affect the calculations concerning export routes for Caspian oil. The near-term regional effect of the hostilities in Kosovo is to make the Baku-Ceyhan line slightly more likely.

Competition among export pipeline companies in the Caucasus is heating up, even while the Baku-Ceyhan pipeline project remains on at least temporary hold. As predicted here some time ago, transit fees are beginning to play a major role in at least the short-term development of pipeline routes. This may have unexpected implications for the longer-term future, inasmuch as seven years ago no one was even thinking about Baku-Supsa.

Transit of oil through the Baku-Novorossiisk pipeline continues to be a problematic affair. Since the beginning of the month, the pipeline has been shut down three times. The reasons given are the age of the Russian section of the pipeline and defects in its reconstruction as well as theft of oil along the Chechen part of the route. Although the Azerbaijan International Operating Company (AIOC) says it intends to continue cooperation with the Russian oil pipeline operator Transneft to use the route, the decision to seek other routes such as Baku-Supsa seems now well justified. However, it is clear that Baku-Supsa can only be a temporary bypass in its present state and that the early oil pipeline is unlikely to satisfy all export needs even if upgraded and expanded.

In the early 1990s, the Caspian oil exploration was like a high-ante, high-stakes game of poker with several rounds of draw and a large (but unknown) number of wild cards. A lot of the players frankly acted like cowboys shooting from the hip, and there was a lot of bluffing as well. It was, moreover, a "table stakes" game: if you couldn't meet the level of the bet when it came your turn to call, you had to clear out or find some kind of collateral, usually by signing an IOU to another player who would back you and split any winnings. This is why consortia were established: to pool resources and intelligence.

At the end of this summer, the Kazakhstani government is scheduled to reach a decision on the export route for Tengiz oil. Of course, in the AIOC main-export-pipeline tradition, it could decide to postpone the decision. Still, it is instructive to review the options. There are a number of possible routes. The principal ones are the Caspian Pipeline Consortium (CPC) line projected across southern Russia, the gigantic project eastwards into western China (and supposedly further east) signed with the Chinese National Petroleum Company (CNPC), undersea to Baku and out through Ceyhan, and south through Iran. This is an involved issue.

The problem the AIOC has in the short term is the opposite of the one that everyone has been talking about in the long term. In the long term, the general opinion is that there will be a problem is finding enough oil to fill the Baku-Ceyhan pipeline if it is built. In the short term, the problem is finding enough pipelines to take its oil production exported from Baku.

The current situation around the Caspian is sometimes compared with the nineteenth-century "Great Game." However, it differs on at least three accounts: the players are more numerous, the stakes are not control of territory but access to resources, and the decisive players are multinational-financial bureaucracies rather than state-political structures. Also, the financial environment is unstable and constantly changing. This week's commentary begins a two-part series on the latter theme. This week I discuss the need for strategic alliances and their strengths, and selected issues of financing and feasibility. Next week I argue that financing is not everything, and conclude on the relationship between financing and other forms of engineering.

This week's commentary concludes the theme begun last week on the unstable and constantly changing financial environment for energy development in the Caspian region. Last week I discussed the need for strategic alliances and their strengths and selected issues of financing and feasibility. This week, I explain why financing is not everything and conclude with the relationship between financing and other forms of engineering.

Kazakhstan is now in the midst of a comprehensive re-evaluation of its export options. The strategies and choices open to Astana concerning international energy development must be seen in the perspective of the difficult political and economic problems facing the country's leadership. This week begins a multi-part article on Kazakhstan and international energy development. This four-part article begins here with a review of the political geography of Kazakhstan's economy and an assessment of why China cannot be the preferred export solution.

Three weeks ago, the first article in this series discussed how the economic and physical geography of Kazakhstan has constrained and conditioned President Nursultan Nazarbaev's choices for export routes for Tengiz oil. It gave a series of reasons why the once highly-touted route to Xinjiang province in western China was unlikely to be constructed. It also observed that although earlier this year Almaty set this autumn as a time by which a definitive choice of an export route should be made, it was just as likely that no such decision would be in fact taken. Events over the last three weeks appear to confirm that no definitive choice will soon be made. The principal reason is the opening of new possible export routes. The present article discuses these developments and why have occurred.

The first article in this series discussed how the economic and physical geography of Kazakhstan has constrained and conditioned President Nursultan Nazarbaev's choice of export routes for Tengiz oil. The second analyzed recent events leading to the multiplication of export route possibilities despite the Asian financial crisis and the temporary fall in the price of oil. This week, I take a broader view to inspect the problems behind the expansion of Kazakhstani oil exports.

The last article in this series distilled three central problems that have impeded the development and export of Caspian energy resources. From those three problems, three lessons were drawn. In turn, it was shown that those three lessons are directly analogous to the lessons from research on the effectiveness of international environmental institutions.

In mid-June, I wrote that "if and when construction begins on Baku-Ceyhan, it will be due to a major shift in a variable whose immutability everyone now takes for granted." Construction has not yet begun, but such a variable has shifted. That variable is the attitude of BP-Amoco, the largest shareholder in the Azerbaijan International Operating Company (AIOC), which on October 19 stated that "the Baku-Ceyhan pipeline is a strategic transportation route that should be built."

This week’s commentary continues the analysis begun last week, of the terms and prospects for agreement on construction of the Baku-Ceyhan main export pipeline (MEP). The column last week discussed two of the four agreements being negotiated: the MEP agreement itself and the cost guarantee agreement. This week, I begin discussion of the prospective agreement between investors and transit states.

Part one of this series, published after BP-Amoco made an announcement in support of the Baku-Ceyhan Main Export Pipeline (MEP), reviewed the background to that decision and its implications with regard to the four agreements being negotiated between Turkey and Azerbaijan. It also discussed what the MEP agreement and the cost guarantee agreement might look like. Part two began the discussion of the agreement between investors and transit states. This week's column is being written on the weekend preceding the November 18-19 meeting of the Organization for Security and Cooperation in Europe (OSCE) in Istanbul. It is expected that a set of framework agreements will be signed at that meeting, at least by Turkey and Azerbaijan. In anticipation of that event, the discussion of the agreement between investors and transit states will continue here, with special attention to Georgia. First, however, will come a few necessary preliminary remarks about BP-Amoco and the Istanbul conference.

The signing of the Istanbul Protocol on the Baku-Ceyhan pipeline at the recent OSCE meeting was highly important politically to the leaders who signed it. But the project will in the long run be more important to the peoples of the region than to those leaders who expended so much effort bringing it about. The pipeline deal presents regional leaders with a fateful decision. Should they fail to use local suppliers and train local labor for its construction, current disparities in income distribution will become aggravated. This could create civil unrest, leading to political instability that would threaten the pipeline project itself. But by using local NGOs to train a capable workforce, individual workers would experience the decision-making autonomy necessary to foster democratic institutions, build civil society, and perhaps also lead to civil unrest.

This commentary provides background on Javakhetia, the ethnically Armenian region in southern Georgia, in order to establish that is not the next Karabakh and not another Abkhazia, and therefore neither flashpoint nor bottleneck for oil pipelines crossing the Caucasus from the Caspian to the Black Sea. Stability in Javakhetia is likely to continue, although in the long term there is a wild card: the Meskhetian Turks, a people deported by Stalin whose has been mandated to their homeland, which lies west of Javakhetia proper and east of Ajaria.

This column continues the series on the Baku-Ceyhan pipeline agreements and their fall-out. Previous articles discussed the cost guarantee agreement, the Main Export Pipeline (MEP) agreement itself, and the agreement between investors and transit states. This week, I wish to interject remarks on the role of the Azerbaijan International Operating Company (AIOC). Future articles will continue discussion of the Istanbul accords, including the Trans-Caspian Gas Pipeline (TCGP) for natural gas from Turkmenistan to Turkey and the problem of identifying sufficient oil to fill the MEP, as well as the construction contract and Iran’s recent moves to cut the cost of its swaps to the producer countries.

This week's column continues the discussion, begun last year, of the Baku-Ceyhan main export pipeline (MEP) accords initialled in Istanbul during the November OSCE summit. Although none of these agreements has yet been published, their outline and some of their details have already been analyzed here from available information. Of the four agreements initialled, previous columns this series looked at the MEP agreement itself and the cost guarantee agreement. As suggested earlier in this series, it turns out that the agreement between the investors and the transit states is complex and still subject to further clarification, as a precondition for establishing the definitive terms of the construction contract itself.

[Note: This article was written after Turkmenistan had agreed to resolve a territorial dispute, before it subsequently reversed that decision.]

The territorial dispute over the Kyapaz/Serdar offshore oilfield that was a major stumbling block to the Baku-Ceyhan Pipeline agreement, no longer is an impediment to Caspian energy development or a barrier to cooperation between Azerbaijan and Turkmenistan. Now, however, a more important question confronts the region. Will Azerbaijan be permitted to put natural gas from its newly proven Shah-Deniz gas-and-condensate field into the Trans-Caspian Gas Pipeline (TCGP) that is planned to bring Turkmenistani gas to Turkey via Azerbaijan and Georgia? This crucial issue may well influence whether, when and how the Baku-Ceyhan Main Export Pipeline (MEP) for Azerbaijani oil is built. In the new scenario, it is possible that negotiations over TCGP implementation will set the logistical precedents for the MEP to follow.

In mid-January, the first multilateral meeting of parties interested in the Trans-Caspian Gas Pipeline (TCGP), which will carry natural gas from Turkmenistan to Turkey, was held in Ashgabat. It included the countries concerned, parties to the TCGP consortium that will be building the TCGP and interested observers. TCGP consortium is 50% owned by PSG International, which in turn includes the U.S. companies GE Capital and Bechtel, plus Royal Dutch/Shell. It has been known for some time that the initial volume of gas to be pumped through the TCGP will be 16 billion cubic meters per year, subsequently to be raised to 30 billion. As in the case of the Baku-Ceyhan main export pipeline (MEP) for Azerbaijani oil, the fact that the pipeline will traverse more than two countries makes the negotiations technically intricate.

For much of the period since the November 1999 OSCE summit in Istanbul, this column has principally discussed developments concerning the Baku-Ceyhan main export pipeline (MEP). I wish to shift gears here for an extended review of recent events related to Turkmenistani gas exports. The first two sections of this article address, respectively, the background and current prospects of the Trans-Caspian Gas Pipeline (TCGP). The next two do the same for the "Blue Stream" project from Russia under the Black Sea to Turkey. Then I set out some broad geopolitical considerations, focusing on European and American misperceptions of each other and of Turkey. After that, I briefly discuss the Iran factor as it affects Turkey's geopolitical considerations and conclude with Turkey's stake in the TCGP.

In mid-February, Turkmenistan's President Saparmurat Niyazov rejected a proposal to split equally with Azerbaijan exports of natural gas through the proposed Trans-Caspian Gas Pipeline (TCGP) with a projected volume of 30 billion cubic meters (bcm) per year. The contract to construct the TGCP was awarded last year to PSG, a joint venture of Royal Dutch Shell, Bechtel and the GE Capital unit of General Electric. Turkmen President Niyazov accused US President Clinton's Caspian advisor John Wolf of pressing Ashgabat to accept unfavorable conditions from Baku. Later on March 9, Niyazov announced an agreement with Azerbaijan President Aliev to scale down Azerbaijan’s demands from nearly one-half of the pipeline's capacity to one-sixth, thus defusing the latest clash between the Caspian’s hydrocarbon titans.

This article continues a series begun late last year as an analysis of the then-accelerating negotiations that led to the initialling of agreements on the Baku-Ceyhan main export pipeline (MEP) at the OSCE's mid-November summit in Istanbul. There were four such agreements: a cost guarantee accord, an accord between investors and the transit states, the MEP accord itself and the construction contract. The first four articles in this series addressed the four agreements and the role played by the Azerbaijan International Operating Company (AIOC), including its component companies and BP-Amoco in particular, in the talks. The fifth looked at Georgia's demands, which by then were the main obstacles holding up to the talks. In late March, the talks were brought to a successful conclusion, with all of Georgia's demands receiving satisfaction. Therefore, it is appropriate to bring this series to a conclusion, although future columns will undoubtedly revisit the MEP and related issues. The present column traces the negotiations from early January until their conclusion, with special attention paid to Georgia's demands and how they were satisfied.

Secretary of State Madeleine Albright arrives April 14 in Kazakhstan, on the first leg of a week-long tour of Central Asia that will also take her to Kyrgyzstan and Uzbekistan. The visit occurs against a backdrop of increasing Russian diplomatic activity in the region in the period since Vladimir Putin's appointment as Acting President by Boris Yeltsin and subsequent election in his own right. This coincidence opens speculation about United States-Russian relations in Central Asia and the directions Central Asian countries themselves will choose to chart their futures.

This week I begin a new, short series on an issue that few people talk about and fewer people do anything about. This is the industrial infrastructure problem. It is already clear that problems of energy development in the Caspian are unique. Over the last 10 years, companies have devised new organizational methods of work to deal with human-resource issues. In international-legal and project-structuring terms, the Baku-Ceyhan agreement is apparently the first instance ever of a trilateral intergovernmental project that includes a transit country and that was concluded through intergovernmental accords, with industry consortia representing strategic alliances sitting at the table during negotiations and concluding side agreements to facilitate and implement the overall plan. However, infrastructure limitations add themselves to other idiosyncratic factors, political and economic, that slowed Caspian energy development in the 1990s.

It was announced recently that Georgia will sign this week a host government agreement with private investors in the oil pipeline pipeline from the Azeri capital Baku, through the Georgian capital Tbilisi to the Turkish Black Sea port of Ceyhan. This agreement represents the final piece in the legal framework for the Baku-Ceyhan Main Export Pipeline (MEP). Accordingly, I bring the series I began late last year on this topic to a conclusion, although future columns will undoubtedly revisit the issue.

Three weeks ago I began describing part of the industrial infrastructure problem in the Caspian region. Limitations of physical geography require relative self-sufficiency in the development of basic infrastructure and installation of production facilities. The amount of investment required to build up the infrastructure capacity also limits the pace of the region's development. Steel fabrication capacity is especially key.

Russian President Vladimir Putin just spent the weekend of May 19-21 in Ashgabat where he reached an agreement in principle to increase Russian gas purchases from Turkmenistan. It is yet another indicator of Russia's renewed interest in Central Asia since Putin assumed control. Russia and Turkmenistan have reached an agreement in principle to renew and expand their December 1999 agreement to export 20 billion cubic meters (bcm) for calendar year 2000 and increase this figure by 10 bcm per year for three to four years until import levels reach 50-60 bcm per year. But Russia's real target in Central Asia is neither Turkmenistan nor Uzbekistan but Kazakhstan.

One of the properties of increasingly networked relationships is that they seem to begin to take on a life of their own. The word "self-organization" is used for describing this. In the evolution of networks, events can occur that seem insignificant at the time but which, in retrospect, stand out as crucial markers of qualitative development. (The technical name for this phenomenon is a "bifurcation point.") In this column, I will explore—without using the technical jargon—the question of whether we are approaching such a bifurcation point in the self-organization of the emerging network of Caspian energy pipelines.

On the natural gas front, all signs are "go" for Azerbaijani gas from the offshore Shah-Deniz deposit to find purchasers in Europe. The head of the European Union's TACIS (Technical Assistance for the Commonwealth of Independent States) program, visiting Baku, declared earlier this month that anticipated industrial growth in southwestern Europe would assure a stable long-term market for this gas. Norway's Statoil, which owns a 25.5 per cent share in the Shah-Deniz consortium and has experience with deep-water gas development in the North Sea, is proposing a strategic partnership to the State Oil Company of the Azerbaijan Republic (SOCAR). In particular, it seeks to organize and operate, together with SOCAR, the country's midstream gas development. Significant investment in Azerbaijan's Soviet-era gas infrastructure would be necessary.

In a series of public statements last month including a May 17 seminar at the Central Asia-Caucasus Institute at Johns Hopkins University-SAIS, Andrei Urnov, head of the Caspian Sea working group of the Russian Foreign Ministry, suggested a new approach to the demarcation of national sectors in the Caspian Sea. His announcement followed a decision by the Security Council of the Russian Federation to re-activate Russian policy in the region through sea-bed delineation for the purpose of subsoil use which may thus signal a qualitatively new development in the stalled negotiations over the legal regime of the Caspian Sea.

The one formal organization is the Central Asian Economic Union which includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. The leaders of these countries have concluded several agreements on expanding economic cooperation, but these will remain a dead letter until the Uzbek som is made fully convertible. The two multilateral formations are not embodied in formal organizations. One is a coalescence of energy-related issues bringing together Kazakhstan, Uzbekistan and Turkmenistan, in a geo-strategic sense, as a north-south axis along the eastern shore of the Caspian Sea. The other is a coalescence of counterinsurgency-related issues bringing together Kyrgyzstan, Tajikistan and Uzbekistan, also in a geo-strategic sense, as an east-west axis along the southern border of the Commonwealth of Independent States.

Fall-out continues from the Shah-Deniz gas find offshore from Azerbaijan. Several weeks ago, part one of this series examined developments around the Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan, and Iran's problems with Turkmenistani gas imports. The evident withdrawal of PSG from the TCGP has brought to the surface many subterranean possibilities that have been silently percolating. Whereas a few weeks ago, it was generally thought that Turkmenistan would be left only with Gazprom as a gas-buyer and would have to take whatever price it was offered, other suitors have presented themselves.

China has declared ownership of its planned pipeline from Xinjiang to Shanghai open to foreign entities. This follows President Jiang Zemin's visit to Turkmenistan, where he discussed the possibility of a pipeline to carry natural gas from that country across Uzbekistan and Kazakhstan to Xinjiang. The announcement comes three weeks after Hong Kong tycoon Li Ka-shing, whose companies recently bought a stake in PetroChina, reportedly made the suggestion to Chinese officials at a June 23 meeting.

This week I continue my analysis of the fall-out from the gas discovery in the Shah-Deniz deposit offshore on Azerbaijan, which, as explained earlier in this series, has led Turkmenistan to turn away from the Trans-Caspian Gas Pipeline (TCGP) project.

This week I resume my series on the fall-out from the discovery of vast natural gas resources at the Shah-Deniz deposit, located off the coast of Azerbaijan. That discovery put into question the Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Turkey, though this project has recently been re-endorsed by Ashgabat. I will cover the latter development in a future column. For the present, however, I wish to focus on the neglected Turkmenistan-Ukraine-Russia energy triangle and discuss how TCGP politics have contributed to a political battle among elites in Kyiv.

The Chinese National Petroleum Corporation (CNPC) asserts that Xinjiang has 17.4 trillion cubic feet of proven gas reserves. However, it is not clear that they are all recoverable. The geology is frequently difficult and the depths are often extreme. It is more likely that this figure is for potential or estimated reserves. Indeed, several years ago western energy companies, encouraged by Beijing's touting of Xinjiang's natural energy resources, paid high fees to test-drill for oil, and they came up dry. Now, the 2,600-mile-long "West-East" pipeline is projected to carry gas from Xinjiang to Shanghai at a construction cost of $5 billion and to open in 2003.

I resume my series on the fall-out from the discovery of vast natural gas resources at the Shah-Deniz deposit, located off the coast of Azerbaijan. That discovery put into question the Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Turkey, though this project has recently been re-endorsed by Ashgabat. I will cover the latter development in a future column. For the present, however, I wish to focus on the neglected Turkmenistan-Ukraine-Russia energy triangle and discuss how TCGP politics have contributed to a political battle among elites in Kyiv.

The article examines once more the results of the Shah-Deniz find for the Russia-Turkmenistan-Ukraine triangle. It first dissects the most recent developments in their interactions over energy supplies and policy. It then examines the question of what the Russian contract for an additional 10 billion cubic meters (bcm) means for Turkmenistan, for the Baku-Ceyhan pipeline, for the Shah-Deniz project and for the TCGP itself.

Reports have recently circulated of an agreement between Russia and the European Union (EU) for long-term energy sales. Europe wants more Russian oil and gas, but this does not mean that it will not continue to seek oil and gas from other Caspian countries. However, for Europe to take more oil and gas from Russia, new pipelines would have to be constructed, and this in turn would require a clear legal framework. The best step Russia can make right now in that direction is to ratify the Energy Charter Treaty (ECT).

[This edited translation by of "Russia and Europe's Energy Strategy," published by Нефтегазовая Вертикаль, contains all the main points of the original text but re-arranges some of them and includes additional explanatory material for a more general Russophone readership.]

Между Россией и Европейским Союзом (ЕС) идет серия переговоров о новых соглашениях на долгосрочные поставки российских энергоносителей. Европа хочет заручиться гарантией значительного увеличения поставок нефти и газа из России на длительную перспективу. Имеющиеся транспортные магистрали справиться с дополнительным потоком энергоносителей не смогут. Строительство новых трубопроводов, в которых заинтересованы и Россия, и Европа, потребует значительного финансирования. Оно должно придти из Европы. Обсуждаемая формула "энергоносители за инвестиции" сможет работать только при наличии в стране ясной законодательной базы. Первым эффективным шагом России в этом направлении может стать ратификация Договора к Энергетической Хартии.

In my most recent installment in this series, I indicated that recent developments pointed towards the need to review Turkmenistan's options for export of its natural gas. That is the subject of this article.

The Shah Deniz gas discovery had the effect of decreasing the volume of the Trans-Caspian Gas Pipeline (TCGP) allocated to Turkmenistan, whose President Saparmurad Niyazov consequently sought other new routes. However, he has so far failed to conclude any agreement other than his fallback plan, which is to sell more gas to Russia, which, because of the absence of signficant pipelines for export to other countries, remains his only big customer. In this context, Iran has again come forward as a potential consumer of Turkmenistan's gas.

The beginning of the year 2001 has seen a re-inauguration of economic and political warfare over the production, distribution and consumption of natural gas in the greater Caspian region. On the first day of the year, Turkmenistan stopped exporting gas to Russia because of a failure to agree with the energy-transport company Itera on prices for the year to come. On the very same day, for the second time in a month, Russia cut off gas supplies to Georgia, in abrogation of existing contracts.

The results of the recent visit by Russian president Vladimir Putin to Baku have received different interpretations in different media. This week’s column focuses on figuring out exactly what those results are, and what they mean, for the aspects of Russian-Azerbaijani relations that are most pertinent to Caspian Sea division and related issues.

Armenia has suffered severe energy shortages since 1991 and has long been looking to Iran to relieve its energy needs. Last year the European Commission decided to back a project for construction of a pipeline from Iran into Armenia. Discussions have now begun with Ukraine concerning the possibility of Iranian natural gas transiting Armenia and Georgia, then travelling either overland through Russia or under the Black Sea into Ukraine and onward to European markets. However, it is unlikely that the gas will get any further than Armenia. Nevertheless, Turkmenistan's President Niyazov must now face Russia and Iran as potential competitors for the European market. Unless Niyazov decides to build the Trans-Caspian Gas Pipeline (TCGP), both Russia and Iran will have a stranglehold on Turkmenistan's gas and oil exports.

In an official announcement, the government of Turkmenistan put its cards on the table concerning the diplomatic position that it plans to take on the demarcation of the Caspian Sea and the division of its resources at the summit meeting that will take place on March 8-9 in the port city of Turkmenbashi. This column analyses the content and significance of that announcement in the context of new developments in the region.

The current, contradictory phase of events around the Caspian is captured by the difficult realism of Viktor Kalyuzhnyi, Russia's deputy foreign minister, who also serves as President Vladimir Putin's special envoy on Caspian affairs. As developments continue to accelerate, Russia is seeking to trace a course between the Scylla of hardball Realpolitik, which could alienate neighboring states, and the Charybdis of exclusively economic gain to the possible detriment of state interests. This contradiction is clearest in Russian policy towards Iran, which includes the question of influence over the choice of export pipelines for Kazakhstan's now undeniably significant energy resources.

The selection several weeks ago of Italy's ENI as operator of the Offshore Kazakhstan International Operating Company (OKIOC), which is exploring the vast Kashagan deposit offshore from Kazakhstan, came as a surprise to most observers. Eni was a dark horse in OKIOC and not one of the front-runners to become operator.

The opening, or at least the beginning of the filling, of the oil pipeline of the Caspian Pipeline Consortium (CPC), from the Tengiz field in northwest Kazakhstan to Novorossiisk on the Russian Black Sea coast, received deserved if extended—indeed sensational—publicity several weeks ago. The CPC line is, after all, the first new pipeline to be built from the Caspian region since the demise of the Soviet Union. The pumping of oil into the pipeline began belatedly, but it is now expected that the first tanker will be filled in Novorossiisk in June.

All the attention paid to western Kazakhstan makes it difficult for most observers to gain an understanding of the overall energy balance in Central Asia. For example, sight is often lost of Uzbekistan's regional role as an energy producer because of its two better-endowed neighbors, Kazakhstan and Turkmenistan. Yet as explained below, Turkmenistan does not really come into play although it is certainly a regional actor; rather, Kazakhstan and Uzbekistan are the main players on the scene. This article calls attention to overlooked aspects of the Central Asian energy balance, with special attention paid to Kazakhstan and Uzbekistan and the contrasts between them and the significance of those contrasts.

Following meetings with Turkmenistan's President Saparmurad Niyazov in Ashgabat, Viktor Kaluzhnyi, President Vladimir Putin's special envoy on Caspian affairs, announced earlier this month that the five-way summit to define the Caspian Sea's legal status and the question of its division into national sectors, planned for early April (and postponed from early March at Iran's request), would take place in the middle of the current month. He was contradicted a few days later by an announcement from Putin's own office that the summit would be indefinitely postponed, which turned out to be the case.

In one of the generally less remarked-upon recent political earthquakes, the reform-oriented government of Prime Minister Viktor Yushchenko of Ukraine has lost a no-confidence vote in the Ukrainian Rada (parliament) but will stay on at the head of a caretaker government for up to 60 days. The column analyses the significance of the political crisis in Ukraine for energy questions in Europe and Eurasia.

The recent summit of Turkic-language countries in Ankara provided Turkmenistan's President Saparmurad Niyazov with the opportunity to insist yet again that his country and his person are central, if not key, to the resolution of major problems in the region. His suggestion that the next Turkic summit be held in Ashgabat inevitably recalls his plan for a summit of the Caspian Sea states in the port city of Turkmenbashi.

SUMMARY: Earlier this month India's Prime Minister Atel Behari Vajpayee became only the second Indian head of government to visit Tehran since the disintegration of the Soviet Union, and the first in over seven years. At the head of a large delegation, he signed seven cooperation accords on energy, water, trade and science but sought to downplay efforts at bilateral defense cooperation.

Two weeks ago, in the context of Turkmenistani President Saparmurad Niyazov's visit to Ankara for the Turkic-speaking countries' summit, this writer discussed how Ashgabat is currently situated in the "great game" over Caspian Sea energy resources, especially with respect to relations with Azerbaijan, the Trans-Caspian Gas Pipeline (TCGP) project and Caspian Sea demarcation. The discussion of Turkmenistan's position continues in light of Niyazov's subsequent visit to Ukraine.

A sensational report has arrived that Moscow may be altering its policy on the Baku-Tbilisi-Ceyhan (BTC) export pipeline, so as to permit Russian companies to participate in its construction and operation. Russia's foreign minister Ivan Ivanov is said to have stated a few days ago in late May, that although in his judgment BTC will not be economically viable, Russian companies would not be blocked from participating in it. However, now that Caspian Pipeline Consortium (CPC) from Kazakhstan is scheduled to arrive later this year in Novorossiisk, it is clear that high-ranking Russian officials are take seriously the environmental objections from Turkey concerning the flow of excessive quantities of oil through the Straits.

It is projected that the Blue Stream pipeline will increase Turkey's dependence on Russian sources of natural gas from the current two-thirds level to about four-fifths. For this reason, the United States has reportedly raised hesitations to Ankara over the past several years.

Mavi akım projesinin tamamlanması konusundaki kuşıkular son dönemlerde daha da arttı. Bunun birinci nedeni, Türkiye'deki krizin sürmesi ve bizzat Mavi Akım anlaşımasına yönelik yolsuzluk soruşıturması.

In late March, Kazakhstan's Prime Minister Kasymzhomart Tokaev turned the tap at the Tengiz field to begin filling a pipeline built by the Caspian Pipeline Consortium (CPC). This 1,580-kilometer pipeline was built to take oil from Tengiz (estimated to hold between 6 and 9 billion barrels in recoverable reserves) from western Kazakhstan to the coast of the Black Sea. The Tengiz deposit is being developed by TengizChevrOil (TCO), a consortium led by the US oil major Chevron (50%) and also including ExxonMobil (25%), LUKArco (5%) and the government of Kazakhstan (20%).

A good deal of attention has been devoted in recent days to the incident in the south Caspian on July 23, when Iranian military airplanes buzzed vessels that had been chartered by BP to begin exploring the Alov deposit, a component of the Araz-Sharg-Alov offshore block. Iranian ships subsequently intervened that evening, to dispute ownership of the block (which Iran calls "Alborz") and warn these exploratory vessels off. Almost paradoxically, this show of military force came only a day after Hassan Rouhani, the secretary of Iran's Supreme National Security Council, signed an agreement in Baku with Ramiz Mehdiev, the head of the analogous Azerbaijani body, concerning security cooperation and covering drugs, crime and terrorism. Indeed, it came only a few weeks before a long-planned visit by Azerbaijan's President Heidar Aliev to Tehran.

Toward the end of President Bush's September 24[, 2001] statement about freezing terrorists' assets, one finds the overlooked but no less remarkable assertion that the U.S. is "working closely with the United Nations, the EU and through the G− 7/G−8 structure to limit the ability of terrorist organizations to take advantage of the international financial systems."

Oil from the Tengiz deposit in western Kazakhstan is being pumped westward through a pipeline through southern Russia. The pipeline, built by the Caspian Pipeline Consortium (CPC), has cost $2.6 million to construct: twice the originally estimated cost. It will have an initial capacity of somewhat less than 600,000 barrels per day (bpd). Its eventual full capacity will range from 1 to 1.5 million bpd. The date for loading the first tanker in Novorossiisk has been postponed several times, now likely to take place to be sometime in September.

The effect of events in Afghanistan on public opinion in Central Asia is difficult to gauge. Yet this public opinion is already in general either exhausted by economic hardship or increasingly discontent with political repression. That very situation is what presents the danger that the U.S. rapprochement with Central Asian regimes will negatively affect its long-term interests.

The Azerbaijan International Operating Company (AIOC) has sought for nearly a decade to develop for export Azerbaijan’s “Contract of the Century” oil fields, i.e., the major offshore deposits in the Azeri-Chirag-Guneshli sectors. As it was determined that the Baku-Ceyhan pipeline would go through Georgia, it acquired the name of the Baku-Tbilisi-Ceyhan route, or BTC for short. Only a few weeks ago, the AIOC announced its definitive decision to proceed with the construction of the BTC line, now expected to open in late 2004 or early 2005.

In late 2000, the EU and Russia began extensive high-level commercial talks about the prospects for European importation of Russian energy resources over the course of coming decades. However, Russia's failure to pursue adequate investment in its natural gas industry would require significant capital outlay from the European side in order to increase imports significantly. In essence, an entirely new pipeline system would have to be constructed in order to satisfy Europe's upcoming energy requirements, whether in gas or in oil. Because it is ecologically cleaner, the EU had taken a policy decision in favor of gas. The European Commission began to look still more definitely towards Iran to satisfy at least some of its long-term gas demand, as well as to put price pressure on Russia.

Late last year, the flagship venture TengizChevrOil took the unusual step of holding its board meeting in Almaty and voting to suspend the next stage (planned at $3 billion) in the project’s development. A number of explanations filtered out over subsequent weeks to explain the decision, although all the explanations turned on the issue of the level of TengizChevrOil's taxes. A more disturbing explanation later emerged, that KazMunaiGaz, the Kazakhstani partner in TengizChevrOil, had put forward a bureaucratic stategem that amounted to making ChevronTexaco to pay its portion of the cost.

Iran has been seeking since the mid-1990s to undertake oil swaps with Kazakhstan and Turkmenistan as a way to increase its own exports. Such swaps involve Iran’s importing oil in the north on its Caspian Sea coast for domestic refining and consumption, while exporting compensatory quantities to the world market from its southern ports on the Persian Gulf. This has been part and parcel of Iran’s strategy not only for developing its own energy sector but also for situating itself as an important transit country for international trade flows in general.

Real GDP fell throughout the first half of the 1990s in all newly independent states, declining by about half in Kazakhstan. The country was also adversely affected towards the end of the decade by the Asian and Russian crises as well as by fluctuating world market prices for energy. However, Kazakhstan's economic performance has significantly improved since late 1999, due partly to capable macroeconomic engineering, partly to the rebound of world energy prices, and partly to spillover effects from energy-sector growth taking hold in the domestic economy.

The significance of the agreements on energy cooperation achieved during Russian President Vladimir Putin's recently completed visit to Kazakhstan is only an indicator of the consolidation of deeper tectonic shifts in Eurasian security and economic affairs. A new triangle is emerging in East Central Eurasian geo-economics among Russia, Kazakhstan and China. (It is being complemented by the emergence of another such triangle in West Central Eurasia among Russia, Turkmenistan and Ukraine.) Energy cooperation is a linchpin of each of the emerging triangular ententes, but the ententes themselves go far beyond energy.

В Евразии происходят глубинные тектонические сдвиги в области обеспечения безопасности и экономического сотрудничества.

На минувшей неделе пресса продолжила комментировать итоги недавнего визита президента Путина в Казахстан.

After a slow start in 2002, the SCO's St.-Petersburg summit in May 2003 approved development of a military arm to assist SCO anti-terrorist cooperation. The organization’s first multilateral military exercise (called “Interaction-2003”) took place that August in Kazakhstan and China, although without Uzbekistan’s participation. In September of that year, the prime ministers of the member states agreed in Beijing to fund the SCO in the amount of $4 million during 2004, establishing its secretariat in Beijing (moved from Shanghai in accordance with a September 2002 decision) and the Regional Anti-Terrorist Structure in Tashkent (rather than Bishkek, and beginning operations in January 2004).

Public speech invited at the International Symposium Examination of the Regions of Crisis from the Perspectives of Turkey, NATO and the European Union, and the Impacts of These Crises on the Security of Turkey, organized by the Strategic Research and Study Center (SAREM), Turkish General Staff, Istanbul, 27–28 May 2004.

SUMMARY: The supergiant Karachaganak energy field, onshore in northwestern Kazakhstan, sends gas for processing over the Russian border to a processing plant in Orenburg operated by Gazprom. Production is slated to increase. The joint operators of the Karachaganak gas venture, BG and ENI, together with the Government of Kazakhstan, are considering building a plant on-site in Karachaganak to process the new volumes. Gazprom argues against this and is trying to offer incentives to send the gas instead to an expanded Orenburg plant. The eventual decision, coming soon, will have significant implications for how Kazakhstan's national pipeline system develops in the future.

Since the end of the Cold War, global international relations are more clearly a "complex system," a self-organizing network rather than a top-down hierarchy. Superpowers (or at least one), great powers, and regional powers still exist, but middle-level phenomena have become important drivers in a world that now self-organizes from bottom up.

India's rise to sustained attention on the global world energy agenda has happened sooner than at least some observers expected it to happen. An RFE/RL article earlier this year gives background to relatively recent developments concerning (and threats to the realization of) the Iran-Pakistan-India gas pipeline.

A geopolitical and geo-economic inventory of Turkey's assets in the middle of the first decade of the twenty-first century reveals such strengths, beyond its military capa-bilities and other state institutions, as industry, population, and, above all, geographic lo-cation. These are foremost among the instruments of the country’s national power that may be mobilized or put to the projection of national power and defense of national inter-est. The territory of the Turkish Republic, in comparison with that of its neighbors, does not hold vast quantities of energy resources (with the exception of coal). However, the country’s well-known geographic situation as a crossroads of continents makes it espe-cially well suited to pursue a policy as a facilitator of energy transport. This strategic di-mension of Turkey's new geopolitical environment provides unique opportunities for en-gagement in response to new policy challenges. It should become a central, indeed defin-ing feature of Turkish diplomacy in years to come.

The key issue identified in this essay, relating to the changes in Turkey's neighborhood and how Turkey might respond to them, is therefore energy security, both national and international. The “change in Turkey's neighborhood” (to adopt the lan-guage of the Call) that make this issue especially salient for Turkey is the increased sig-nificance of Eurasian energy resources towards the end of the first decade of the twenty-first century, when world energy demand is growing faster than expected and prices have risen as a reflection of tighter supplies. This change holds implications for the whole of Turkey's immediate as well as extended neighborhood. It has already affected and will only affect more deeply Turkey's relations with the European Union, Russia, the Balkans, the Caucasus, Middle Eastern neighbors, and Central Asia, as well as Turkey's potential role in transatlantic relations.

Just as neighboring states are the regional international environment for the for-eign conduct of the Turkish Republic, so is Turkey a component of the international environment of other states in the neighborhood. The discussion here, of how Turkey might respond to these changes, sets out Turkey not just as a reactive but pro-active agent in both its immediate and extended neighborhood, an international actor not only respond-ing to changes but also capable of influencing their development by creating trends based upon Turkey's own elements of national power and its capacity to employ them not only for Turkey's benefit but also for that of its partners.

The first section of this essay reviews the evolution of Turkey's geo-economic situation in the changing regional and international environment over the past fifteen years, i.e., since the Soviet Union ceased to exist. The second section examines in greater detail Turkey's situation at the center of the compass of the Eurasian geo-economic envi-ronment. The third section draws policy recommendations on the basis of the preceding analysis. The concluding section of the essay ties the threads together and summarizes the argument.

When US President George W. Bush was in India this month, he caused a flurry of commentary, especially in the Indian media, by appearing to lift long-standing American objections to the construction of a natural gas pipeline from Iran through Pakistan to India. "Our beef with Iran is not the pipeline," he said in Islamabad. "Our beef with Iran is the fact that they want to develop a nuclear weapon ... We understand that you [Pakistan] need to get natural gas, and that is fine."

Last January, Russia, unhappy with Kiev's shift to a western oriented foreign policy, threatened to quadruple gas prices for Ukraine and triggered supply disruption. Robert Cutler, an energy specialist at Carleton University in Ottawa, Canada says Moscow's action called into question its reputation as a reliable supplier. "The current presidential administration did something that no Soviet leadership ever did during the cold war. They cut off gas," he said.

Analysts say the United States has reason to watch closely for signs of anti-American sentiments at the SCO. Robert Cutler, a senior research fellow at Carleton University in Canada, says the underlying purpose of the organization is for Russia and China to assert their influence in Central Asia. He says this is especially true of China, with its bid to secure energy resources.

Robert Cutler, a senior fellow at the Institute of European and Russian Studies at Carleton University in Ottawa, Canada, agrees that Russia’s political and economic strength is growing. He says it was clearly demonstrated by Russian President Vladimir Putin in his recent response to the European Union's call to sign on to a multilateral commerce treaty.

Azerbaijan's oil exports are set to jump 61 percent to 22.3 million tons in 2006 as the BTC comes online, at least according to BP. Meanwhile a lecture by BP's Chief Scientist responsible for formulating long-term strategy is available on line, and a report of some American views about the relationship between oil and democracy in Azerbaijan (as well as Kazakhstan) is available from Voice of America.

A significant indicator of Turkmenistan's future diplomatic and economic course is whether new President Gurbanguly Berdymuhammedov will undertake a rapprochement with Azerbaijan.

Recent weeks have seen increasing United States activity in favor of constructing the Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Azerbaijan. But what are the chances of anything really happening? From the technical standpoint, there is no obstacle.

A little over a month ago, Kazakhstan’s President Nursultan Nazarbaev signed amendments passed several weeks previously by the Majilis (parliament) to the law “On the Subsurface and Subsurface Use” that would allow the government to amend or annul natural-resource contracts if these are judged to threaten the country’s national security. This dispute indicates the changing nature of Kazakhstan’s energy sector.

Two weeks after successful renegotiation of Kazakhstan's participation in the Kashagan offshore project, the country's energy minister stated on January 29 that Kazakhstan may impose a duty on nearly half of all exports of crude and oil products beginning in 2009. The Italian company Eni will cease to be operator of the Kashagan consortium, but the Kazakhstan state company KazMunaiGaz will not gain that status, which it coveted.

Kazakhstan's Prime Minister Karim Masimov has announced major energy-related decisions in the wake of President Nursultan Nazarbaev's address to the nation last week. First, and most strikingly, he has ordered the suspension all negotiations with foreign investors on exploration, development and extraction of subsurface natural resources pending the working out of a new tax code.

Известный американский эксперт по евразийской политике профессор Роберт Катлер поделился своим видением развития геополитических и экономических процессов в Центральной Азии и Евразии с нашим внештатным корреспондентом Мавляном Юлдашевым.

Azerbaijan’s president Ilham Aliev has announced a doubling of the reserves of both oil and gas in his country’s Caspian offshore. New finds in as many of five fields to be developed contain perhaps 50 trillion cubic feet of gas, such as to require a new gas export pipeline. An executive of the national oil company SOCAR has hinted that gas from Turkmenistan could be included, starting even in the near term with small quantities. The French company And although Gazprom has lately offered to buy Azerbaijani gas at near-market prices, probably for re-export to Europe via its planned South Stream pipeline, Azerbaijan has not shown much interest, instead declaring that it will feed the first contracted gas into the rival Nabucco pipeline destined for Bulgaria and beyond.

New prospects for a Trans-Caspian Gas Pipeline (TCGP) from Turkmenistan to Azerbaijan have been receiving deserved attention in recent months. However, another project to pipe energy resources from the western to the eastern shore of the Caspian Sea also demands attention, with implications that loom as large as those of the TCGP. This is an overland oil pipeline that Kazakhstan intends to build from the Tengiz field, in the northwest of the country, to the port of Aqtau in the southwest.

Kazakhstan and Azerbaijan have culminated years-long negotiations with agreements that increase the amounts of Kazakhstani oil to be shipped across the Caspian Sea, supplementing Azerbaijani crude in the Baku-Tbilisi-Ceyhan (BTC) pipeline. Still more significant, redevelopment and expansion of ports on Georgia’s Black Sea coast now prepare the way for Kazakhstani crude to enter the Odessa-Brody pipeline (OBP), which will be reversed again so as to flow east-to-west, and so to reach world markets by way of Gdansk. This oil will come from the massive offshore Kashagan field or even the onshore Tengiz field itself.

Ground was broken in Kazakhstan last week for construction of that country's segment of a natural gas pipeline from Turkmenistan to China, set to be the longest and most expensive such pipeline in the world - its length is usually given as 7,000 kilometers, and although this looks like a rounding-up of a distance exceeding 6,500 km it may when work is finished be a more accurate figure than the most recent construction estimate of US$26 billion.

Corruption and politics in Ukraine threaten to choke off, at least in the near term, the expansion of oil exports from Azerbaijan and eventually Kazakhstan to Europe. This is the significance of Ukrainian Prime Minister Yuliya Tymoshenko's efforts in July to halt what she called the "shadowy privatization" of the Odessa-Brody oil pipeline.

The armed conflict between Russian and Georgia has further exposed the fragile position of the energy links running through the smaller country from the Caspian Sea to developed market economies

The realities of Turkey's economy and politics would alone have killed off the summer revival in the country's stock markets. Russia's invasion of Georgia, on Turkey's back doorstep, made sure.

Türkiye’nin ekonomik ve siyasi gerçekleri tek başına, piyasalardaki yaz canlanmasının canına okurdu. Rusya’nın Türkiye’nin arka kapısı Gürcistan’ı işgali de bunu kesinleştirdi.

Թուրքիայի տնտեսական և քաղաքական իրողությունները միայն բավական կլինեին երկրի արժեթղթերի շուկայում ամռանը գրանցված աշխուժությունը սպանելու համար: Իսկ Ռուսաստանի ներխուժումը Թուրքիայի դրկից Վրաստան դրան թափ հաղորդեց:

Kazakhstan, whose economy has endured a switchback progress since independence from the Kremlin in 1991, is discovering the benefits of salting away wealth in the good times as it seeks to survive the global downturn without recourse to foreign aid.

Стоимость свопов кредитного дефолта снизилась

The Kazakhstan government, concerned about runaway costs and repeated delays in the vast Kashagan oilfield, has increased its role in the Italian-led consortium charged with developing the most important oil reserves in the Caspian Sea Basin.

Under the terms of a newly amended North Caspian Sea Production Sharing Agreement (NCSPSA), the share in the Agip KCO consortium held by state-run KazMunaiGaz will more than double to 16.81%, equal to those of Italian company Eni, ExxonMobil, Shell, and Total. ConocoPhillips and INPEX retain 8.4% and 7.56% respectively.

Azerbaijan's state oil company SOCAR and Kazakhstan's state monopoly KazMunaiGaz this month signed an agreement setting out the main principles for a transport system to convey Kazakhstani oil across the Caspian Sea for entry into the Baku-Tbilisi-Ceyhan (BTC) pipeline and subsequent re-export to world markets. This represents a step forward in the realization of the Kazakhstan-Caspian Transportation System (KCTS) that, while long discussed, has become Kazakhstan's response to Russia's unwillingness and/or inability to implement the long-promised doubling of the capacity of the Caspian Pipeline Consortium (CPC) line.

The re-eruption of the conflict between Ukraine and Russia over payments for gas deliveries illustrates that developments in Eurasian energy geo-economics do not take vacations, even over the New Year holidays. The Ukrainian-Russian dispute, for example, takes place in circumstances (economic, financial, political, military, even cultural) that are different from those surrounding their last tiff three years ago. Its significance and its dynamics differ accordingly.

The crisis over Turkmenistan's gas, transmitted by Russia via Ukraine, demonstrates the need for other energy routes from the Caspian Sea region to Europe.

As Russia and China seek to augment their influence over the development of Kazakhstan’s energy production, Astana looks for other routes to overcome the restraints. The reinvigoration since 2007 of prospects for a Trans-Caspian Gas Pipeline (TCGP) with Turkmenistan's participation creates the possibility for Kazakhstan, which already cooperates with Azerbaijan on trans-Caspian oil shipments, to participate also with gas exports. Delays in the development of the offshore Kashagan field make associated gas from the onshore Tengiz oilfield the first candidate for such exports.

Eastern Europe freezes as Brussels fiddles, while with Moscow's help Gazprom extends its grasp of energy production in the Caspian Sea region.

Rising concern that Ukraine, suffering tumbling demand for its exports as the global economy slows down, is heading towards default on its international debt may yet nudge its government to rein in political infighting, even as leading factions position themselves for an election next year.

The agreement announced late last month between Russia and China for construction of a pipeline branch to China from the East Siberia-Pacific Ocean (ESPO) oil pipeline is only one aspect of a relatively new strategic policy direction from Beijing to acquire foreign assets during the ongoing global economic downturn.

Turkey is continuing to make unacceptable demands for the transit of Azerbaijani gas across its territory as part of the Nabucco pipeline project. That is unlikely to keep that gas from reaching Europe in the long run. The Turkish government is seeking to extract advantageous terms that, according to reports from Baku, include taking 15% of the transit gas for domestic consumption.

In mid-February, Russia and China signed an agreement providing for Chinese agencies to lend US$25 billion to the Russian energy trusts Transneft and Rosneft in return for the construction of a branch from the East Siberia-Pacific Ocean (ESPO) oil pipeline from Skorovodino to the Chinese border and the guaranteed supply of significant amounts of oil over the long term. In the wake of the breakdown of American efforts to build its tactical cooperation with the Central Asian states over Afghanistan and the “global war on terror” into a broader strategic vision, the ESPO accord agreement signifies a reestablishment of the ability of China and Russia to cooperate together on geo-economic questions even within the context of their competition for influence in Central Asia.

В середине февраля Россия и Китай подписали соглашение, по которому китайские кредитные учреждения выдадут заем в 25 млрд. долларов российским энергетическим компаниям 'Транснефть' и 'Роснефть' в обмен на строительство ответвления нефтепровода 'Восточная Сибирь - Тихий океан' от Сковородино до китайской границы и гарантированные долгосрочные поставки значительных объемов нефти. После провала усилий США во встраиванию тактического сотрудничества с государствами Центральной Азии по вопросу Афганистана в более широкое стратегическое видение, соглашение о ВСТО означает, что Китай и Россия вновь способны вести сотрудничество по геоэкономическим вопросам даже в контексте своего соперничества за влияние в Центральной Азии.

The European Council, in a meeting principally devoted to determining the European Union's policy towards its eastern members and preparing an EU position for next week's Group of 20 summit in London, also took an important decision last week on energy with a compromise to keep plans for the Nabucco gas pipeline on life-support.

The leaders of Russia and Turkmenistan have been unable to agree on terms for the (re)construction of a Soviet-era gas pipeline in western Turkmenistan. While subsequent negotiations are not excluded, Ashgabat has declared its intent to allow companies other than Gazprom, including Western companies, to bid for the work. In the context of recent developments, a pattern begins to form that may signify the breaking of what is left of Russia’s hold on Central Asian gas transport, to which its relationship with Turkmenistan has been central in the post-Soviet era.

The US$10 billion deal this month allowing China National Petroleum Corporation (CNPC) to purchase 50% of Kazakhstan's privately owned MangistauMunaiGaz (MMG) and a $5 billion loan from China will come as welcome boost to the Central Asian country's economy, which shrank in the first quarter after years of double-digit growth.

Over 100 years ago, Sir Halford Mackinder famously identified territories to the east and north of the Caspian Sea as the "geographical pivot of history" in his Heartland Theory of geopolitics. Much of that territory corresponds to modern-day Uzbekistan, whose importance was rediscovered in the wake of the disintegration of the multinational Soviet state. The term could now equally apply to Azerbaijan's role in the South Caucasus, and not only because it provides the most secure and efficient transit of Caspian Sea energy resources westward to Europe and beyond.

The European Union (EU) and Turkey have resolved two major differences that were preventing agreement on the terms for the Nabucco natural gas pipeline, and the Turkish President Abdullah Gul is reported to have promised that a signing ceremony will take place on June 25 in Ankara.

In a 1955 essay in The Economist, British historian C Northcote Parkinson formulated the now well-known "law" forever after eponymously associated with him, that work expands so as to fill the time available for its completion. Another of his aphorisms, less well known but still more cogent, states that delay is the deadliest form of denial. While the European Union was for years up until a May summit in Prague threatened with this latter lesson, it may now be Turkey that needs to remember it.

The unrest in China's far-west region of Xinjiang, notably in the local capital of Urumqi, comes after 15 years of development and transformation of the area to be a geo-economic springboard for projecting influence into Central Asia and the Caspian region in the wake of the collapse of the Soviet Union.

The signing this week of a transit agreement to govern the Nabucco natural gas pipeline marks an important staging post in bringing to reality the long-touted energy route, which is projected to run 3,300 kilometers from the Caspian Sea region to Europe. Yet it is important to understand what such a transit agreement is intended to do - and what it is not intended to do.

Волнения в Синьцзян-Уйгурском районе разразились спустя 15 лет после начала масштабной трансформации этого региона в геоэкономический трамплин для китайского прыжка в бывшие советские республики.

Question: The future of Iraq is related to the success of the political process and national reconciliation among Kurds, Shiites and Sunnis. To avoid dictatorship of the majority, consensus democracy has been pursued in Iraq. What is your opinion as how this process will succeed and how these three main components of Iraq may unite?

İran və Rusiya arasında Xəzər dənizində başlayan ikigünlük birgə təlimlər digər Xəzəryanı dövlətlər - Azərbayjan, Türkmənistan və Qazaxıstan tərəfindən diqqətlə izlənilir. Bu barədə "Asiya Times" qəzetində Robert Katler yazıbdır.

In order to understand energy geopolitics in Asia, even in East Asia, it is no longer adequate to look westward to Central and Southwest Asia across the Arabian Peninsula to North Africa. A new, massive liquefied natural gas (LNG) development in Australia has just passed an important environmental hurdle, and China, India and Japan are lined up to be customers.

Question:  There's an opinion, that during the Aqtau summit, the questions concerning Caspian sea were discussed, without Iran. What is your opinion on this? If, for example its true, how would it affect the future talks with all five Caspian littoral states?

Интервью Т. Теймурa (Day.Az) с канадским ученым, исследователем Института европейских, российских и евразийских учений Карлтонского университета, Робертом Катлером.

Robert Cutler, Senior Research Fellow at Institute of European, Russian and Eurasian Studies at Carleton University spoke to Day.Az in an interview. Published under by-line of T. Teymur.

The presidents of Azerbaijan, Kazakhstan, Russia, and Turkmenistan ended their meeting in Kazakhstan's resort city of Kenderly last weekend with its purpose and consequences as clear as distant figures in an early autumn mist. Two elements did emerge more clearly than others - Turkmenistan's determination to diversify its energy export routes and to make future price talks with Russia tough going, and Iran's displeasure at not being invited to the party.

Вопрос ограничения доступа Ирана к газовому проекту Набукко вызван недоверием общественности к выполнению этой страной своих обязательств, считает американский эксперт Роберт Катлер.

[Excerpt from news article (interview) by Turan News Agency (Baku).]

[News article (interview) first published by Trend News Agency (Baku), 29 September 2009, under by-line of A. Bədəlova.]

[Interview on Caspian energy security, broadcast in Azeri translation from the original English, and also published in Azeri by Azadlıq Radiosu (Baku), 29 September 2009, under the by-line of Arifə Kazımova.]

[News article (interview) first published by Trend News Agency (Baku), 29 September 2009, under by-line of A. Badalova.]

Azərbaycan prezidenti yanında Strateji Araşdırmalar Mərkəzində “Genişlənmiş Qara dəniz-Xəzər hövzəsi regionunda Azərbaycanın enerji strategiyasına geosiyasi amillərin təsiri” mövzusunda dəyirmi masa keçirilib. APA-nın məlumatına görə, tədbirdə əsas məruzəçi qismində Kanadanın Karlton Universitetinin Avropa,

«Набукко» нужно воспринимать как реальный проект. Об этом в Центре стратегических исследований при Президенте Азербайджана во время «круглого стола» на тему «Влияние геополитических факторов на энергетическую стратегию Азербайджана в Каспийско-Черноморском регионе» заявил научный сотрудник института исследований Европы, России и Евразии канадского университета Карлтон Роберт Катлер.

В 2002 году Тегеран негативно отреагировал на военные маневры России на Каспии и отказался направить на них военных наблюдателей. Теперь ситуация иная. Россия с большими сомнениями относится к энергетическим проектам в регионе, поддерживаемым США. Кроме того, Москва не удовлетворена тем, что администрация Обамы не пошла на компромисс по системе ПРО.

Как сообщает Vesti.Az, об этом на состоявшемся в Центре стратегических исследований при президенте Азербайджана круглом столе на тему «Влияние геополитики черноморско-каспийского региона на энергетическую стратегию» сказал американский эксперт, старший научный сотрудник института исследований Европы, России и Евразии университета Карлтон Канады Роберт Катлер.

[News article (interview) first published (in Azeri translation from English) in Yeni Şərq (Baku), 29 September 2009.]

[Text of television report (interview excerpt in Azeri translation from English original) by Azərbaycan Televiziya və Radio Verilişləri Qapalı Səhmdar Cəmiyyəti, 29 September 2009, 6:47PM local time.]

[News article (interview) first published in Yeni Azərbaycan (Baku), 30 September 2009.]

«Проект прокладки газопровода по дну Каспия, с восточного берега в Азербайджан – Транскаспийский газопровод, наиболее реальный путь транспортировки среднеазиатского газа на западные рынки». Об этом заявил на встрече с журналистами старший научный сотрудник Карлтонского университета, известный эксперт по евразийской политике профессор Роберт Катлер.

Неслаженная внешняя и энергетическая политика Европейских стран и политическая переориентация Турции мешает Азербайджану играть более значимую роль в энергетической безопасности Евросоюза. Об этом заявил канадский аналитик Роберт Катлер, выступая во вторник на круглом столе в Баку по вопросу влияния геополитических факторов на энергетическую стратегию Азербайджана, представитель Канадского университета "Карлтон" выразил уверенность, что Европа увеличит усилия для реализации проекта Набукко.

Азербайджан является важнейшим звеном в транзите каспийской нефти на европейские рынки, отметил в ходе встречи с журналистами старший научный сотрудник Карлтонского университета, известный эксперт по евразийской политике профессор Роберт Катлер.

Bu gün Azərbaycan Prezidenti Yanında Strateji Araşdırmalar Mərkəzi “Genişlənmiş Qara dəniz hövzəsi regionunda Azərbaycanın enerji strategiyasına geosiyasi amillərin təsiri” mövzusunda dəyirmi masa keçirib. SİA-nın məlumatına görə, tədbirdə əsas məruzəçi Kanadanın Karlton Universitetinin Avropa, Rusiya və Avrasiya tədqiqatları institutunun baş elmi işçisi, doktor Robert Katler idi.

советует научный сотрудник института исследований канадского университета Карлтон Роберт Катлер.

[This article is the Russian translation (from http://www.inosmi.ru) of the Bulgarian translation (from the newspaper 24 Часа [Sofia]) of the Georgian translation (from the newspaper 24 Ⴑაათი [Tbilisi]) of an interview originally conducted in English, on Caspian and Caucasus region energy security, in Tbilisi on 30 September 2009.]

«Проект прокладки газопровода по дну Каспия, с восточного берега в Азербайджан – Транскаспийский газопровод, наиболее реальный путь транспортировки среднеазиатского газа на западные рынки». Об этом заявил на встрече с журналистами старший научный сотрудник Карлтонского университета, известный эксперт по евразийской политике профессор Роберт Катлер.

Фридрих Энгельс писал, что исторические события зачастую представляют собой «нежелательный результат» различных импульсов в «параллелограмме сил».

В самом деле попросту американский ученый, однозначно научный работник Института европейских, отечественных и евразийских изысканий Университета Карлтон Роберт Катлер не считает потенциальным роль Армении в плане газопровода «Набукко».

АрмИнфо. В обозримом будущем энергетические потоки со стороны Каспия будут проходить в обход Армении. Такое мнение высказал сегодня журналистам эксперт по Южному Кавказу и Центральной Азии, профессор Мичиганского университета Роберт Катлер, выступая в Институте Кавказа в Ереване.

French President Nicolas Sarkozy's visit to Kazakhstan for the signing of an energy pipeline deal marked a week that included two other significant events, including a novel approach to bank restructuring, that trace how the embattled country is seeking to surmount the economic crisis. Kazakhstan, Central Asia's largest economy, has moved to reinforce its banking system, hard hit by the world economic crisis, by agreeing with the creditors of Alliance Bank on terms for restructuring the financial institution. This is the first time that such a deal has been struck without the bank first having been taken under the state's protection.

Визит президента Франции Николя Саркози в Казахстан для подписания сделки по трубопроводу ознаменовал собой неделю, на которой произошло два других важных события (в том числе новый подход к реструктурированию банка), "отслеживающие", как страна, приведенная в боевую готовность, стремится преодолеть экономический кризис.

«Asia Times Online» басылымының авторы Роберт М.Катлер (Robert M Cutler) қазанның 10-ы күні «Kazakhstan points route out of crisis» атты мақала жариялап, соңғы уақытта біздің еліміздің халықаралық деңгейде үлкен саяси-экономикалық маңызы бар шешімдерге қол жеткізіп, дағдарыстан шығар жолды көрсеткені туралы тұжырым жасаған.

Russian Prime Minister Vladimir Putin's visit to China this week is the latest indicator that the rapprochement in Russian-Chinese relations, initiated through the 2001 bilateral "Treaty on Good-Neighborly Relations, Friendship and Cooperation", which provided for increased Russian arms sales to China and the training of Chinese officers at Russian military schools, is developing steadily into closer strategic cooperation. Burgeoning cooperation in the energy sphere dates from Putin's December 2002 visit to China, as president, when it was agreed that a project for a gas export pipeline to China would be elaborated, with the Kovytka gas field being the most likely candidate for supply.

การไปเยือนจีนของนายกรัฐมนตรี วลาดิมีร์ ปูติน แห่งรัสเซียในสัปดาห์นี้ บ่งบอกให้ทราบว่าความร่วมมือในระดับยุทธศาสตร์ระหว่างประเทศทั้งสองกำลังมี การพัฒนาขยับเข้าใกล้ชิดกันมากยิ่งขึ้น อย่างไรก็ดี การที่ปักกิ่งตกลงใจที่จะใช้วิธีต่อรองอย่างเต็มเหนี่ยว สำหรับราคาก๊าซที่จะนำเข้าจากแดนหมีขาว อันเป็นท่าทีที่เปลี่ยนแปลงไปจากความอะลุ้มอะล่วยด้วยการเสนอให้เงินกู้แบบ ผ่อนปรนในโครงการเกี่ยวกับน้ำมันของมอสโกเมื่อต้นปีนี้ ก็เป็นเครื่องบ่งชี้ว่าความร่วมมือกันดังกล่าวนี้มีข้อจำกัดของมันอยู่

Визит российского премьер-министра Владимира Путина в Китай на этой неделе является последним показателем того, что сближение в российско-китайских отношениях, начатое в рамках двустороннего «Договора о добрососедстве, дружбе и сотрудничестве» 2001 г., который предусматривал увеличение поставок российского оружия в Китай и подготовку китайских офицеров в российских военных ВУЗах, стабильно перерастает в более тесное стратегическое сотрудничество.

In all the debate and speculation over the various pipelines planned for the Caspian-South Caucasus corridor and adjacent regions (Nabucco, South Stream, White Stream, and Trans-Caspian Gas Pipelines in addition to various oil pipeline projects), the troubled state of energy relations between Azerbaijan and Turkey has been lost from view, mainly due to their stellar cooperation in the past over the Baku-Tbilisi-Ceyhan oil pipeline and South Caucasus Pipeline for gas in particular.

Более ста лет назад сэр Халфорд Макиндер (Halford Mackinder) произнес знаменитые слова о том, что территории к востоку и северу от Каспийского моря могут стать “географической осью истории”, выдвигая свою геополитическую теорию о евразийском “центре мира”. Значительная часть этой территории соответствует месту расположения современного Узбекистана, чья значимость вновь дала о себе знать после распада многонационального советского государства.

Questions have been raised this month about whether the gas resources of Turkmenistan are in fact as spectacularly voluminous as verified last year by the British firm, Gaffney Cline & Associates.

В этом месяце были подняты вопросы о том, являются ли на самом деле газовые ресурсы Туркменистана столь огромными, как было установлено в прошлом году английской фирмой "Gaffney Cline & Associates ". "Gaffney Cline & Associates" подтвердила, что новое газовое месторождение "Южный Йолотан" содержит от 4 трлн. до 14 трлн. кубометров газа, вероятнее всего- 6 трлн. кубометров. А месторождение "Яшлар" - от 0,3 до 1,5 трлн. кубометров, вероятность - 0,7 трлн. кубометров.

Recent energy and other developments in Southwest Asia, particularly involving Turkey, Iran and Iraq, sketch the outline of an imminent reorganization of international relations in the region. This will have knock-on effects for Eurasia as a whole and the shape of the international system in coming decades. At the same time, it suggests new and unexpected relevance of the mid-20th century geopolitical theorist Nicolas Spykman.

The differentiation in Russian policy and politics between President Dmitry Medvedev and Prime Minster Vladimir Putin is becoming more accentuated.

Prepared remarks to the Wilton Park Conference The South Caucasus and Wider Black Sea Neighbourhood: Regional Developments and Euro-Atlantic Integration, Wiston House, West Sussex (U.K.), 23–26 November 2009.

China's emergence as an important player in the development and use of energy resources found in the Caspian Sea basin, alongside longer established interests emanating from Russia, Europe and the United States, is a reminder of the ever-changing dynamics of the region, too easily overlooked during periods of apparent stasis, such as during the late Soviet era. Yet the appearance of this new power in the region also confirms the essential stability of a core group of relationships about which others wax and wane, with a periodicity of possible future importance that China's presence can help us to identify. Regarding the perspective on the past and future of Caspian Sea basin energy geo-economics, two observations establish the basis on which to proceed.

UE; viac ako 15 rokov sa Spojené štáty usilujú zintenzívniť kooperáciu medzi nezávislými krajinami kaspického regiónu v oblasti energetiky. Od začiatku 90. rokov je cieľom americkej energetickej politiky zabezpečiť, aby tieto krajiny nezáviseli len od jednej vývoznej trasy, ktorá by mohla byť ľahko prerušená.

For over 15 years the U.S. has worked to promote cooperation over energy issues among the newly independent states in the Caspian Sea region. A proclaimed goal of U.S. energy policy in the region since the early 1990s has been to make certain that countries in the region do not have to depend upon any single export route that could easily be squeezed off.

Azerbaijan's efforts to diversify gas export routes and reduce its reliance on Turkey as a transit country for moving the fuel on to Europe are increasing as its negotiations with Ankara over supplies continue to face difficulties. As talks with drag on with Turkey, Azerbaijan has recently added Iran and Bulgaria to its customer base.

The distinguishing feature of Iraq's auction of oil rights this weekend is the relative absence of American companies, in contrast to five weeks ago, when US firm ExxonMobil and Anglo-Dutch Shell signed an agreement to develop the West Qurna Phase 1 field.

В том, что касается разработки и использования энергоресурсов бассейна Каспийского моря, Китай постепенно превращается в игрока, с которым приходится считаться. Вкупе с давно сложившимся пересечением региональных интересов России, Европы и США это должно послужить напоминанием о динамично меняющейся ситуации в регионе, хотя о динамике этой легко забыть в период кажущейся стабильности, как было, например, в позднесоветскую эпоху.

Bangladesh, long known in the West as an "international basket case", is doing its best to consign to history the dismal label so firmly attached to it by US diplomat Henry Kissinger. The economy is humming and the stock market surging. Now the government is being urged to pursue reforms while the opportunity lasts.

With the entry of Iraq into the mix of potential suppliers of natural gas for the Nabucco pipeline to Europe and the proliferation of alternative supply lines beyond the Russian-sponsored rival South Stream pipeline, the "classical" variant of the Nabucco pipeline is undergoing significant modification, just as it moves closer to final realization.

The opening of the first segment of the Turkmenistan-China gas pipeline last month is only one in a series of recent events in Caspian Sea basin energy developments. It signifies Turkmenistan’s first real moves to break its dependence upon Gazprom and the Russian state for international sales of its energy resources. These developments are to the detriment of Europe, which remains dependent upon Russia and Turkey as transit countries and has been unable to push forward the implementation of its Nabucco pipeline project.

Ukraine's run-off election between Prime Minister Yulia Tymoshenko and rival Viktor Yanukovych, to be held on Sunday, may decide the future of a pipeline that could be used to deliver Caspian Sea oil to Europe, bypassing both Russia and Turkey.

Viktor Yanukovych came first in the presidential elections in Ukraine, but Yuliya Tymoshenko has instructed lawyers to bring to the courts evidence of voting irregularities to put Yanukovych’s margin of victory under question. Even if the latter is able to muster a negative majority to oust her from office and form his own parliamentary majority, he may be forced to call new parliamentary elections. Nevertheless, he has already moved on the energy front through floating new proposals, if not yet able to offer them formally for legislative consideration. The elections in Ukraine change the odds also for other projects in the east-west energy corridor from Central Asia and the Caucasus to Europe.

In recent days, energy diplomats on both the Azerbaijani and Turkish sides have revealed that an agreement in principle over the price that Turkey will pay for Shah Deniz gas from Azerbaijan has been reached. However, there are several ongoing sets of simultaneous negotiations over Shah Deniz, also taking place in the context of larger implicit bargaining games over other the Caspian Sea basin deposits of natural gas and indeed the geo-economics of their supply to Europe over the next several decades. These subtleties must be unpacked in order to understand the wide-ranging significance of even seemingly small agreements.

Various diplomats appear to be questioning the supposed competition between the Nabucco and the South Stream natural gas pipelines. In fact, Russia and Turkey are collaborating to block the full implementation of the EU’s Southern Corridor energy strategy so as to assert a duopoly over natural gas supplies to Europe.

Kazakhstan, which is seeking to strengthen its influence over the scale and pace of development of its natural resource projects, appears to have the onshore Karachaganak natural gas venture in its sights after driving through a shake-up at the offshore Kashagan deposit.

Казахстан, стремящийся усилить свое влияние над масштабом и темпом развития своих проектов по природным ресурсам, похоже, имеет в поле зрения прибрежное газовое месторождение Карачаганак после проведения коренной реорганизации на месторождении Кашаган.

Statements by Azerbaijani and Turkish diplomats indicate that the two sides have reached an agreement in principle concerning the price that Turkey will pay for gas from the offshore Shah Deniz deposit for its own domestic consumption. With these signals, the two countries are on the road to settling issues related to conditions for Shah Deniz gas to transit Turkey to Europe through the Nabucco pipeline.

Turkey last week strengthened its energy ties with Iraq by renewing a contract to import Iraqi oil to the Turkish Mediterranean Sea port of Ceyhan, where Azerbaijani oil also arrives via the Baku-Tbilisi-Ceyhan (BTC) pipeline. Earlier this year, it was announced that Iraq will export between 5 billion and 10 billion cubic meters per year of natural gas to Turkey for inclusion in the Nabucco pipeline carrying the fuel to Europe.

Евросоюзу не следует спешить и поздравлять себя с тем, как он поступил в ситуации, связанной с проведением президентских выборов на Украине. Будущее, а не прошлое, покажет, что произойдет дальше. И будущее должно отличаться от прошлого.

The EU should not be too quick to congratulate itself for its handling of the situation surrounding Ukrainian presidential elections. The future, not the past, will tell the story, and the future has to be different from the past.

The Moscow metro bombings on Monday hit the Russian currency, the rouble, yet ironically were a factor in gains on the energy-biased local stock market, on concern that further attacks could push up oil prices.

Ukraine's new government, formed by President Viktor Yanukovych after he was inaugurated in March, this week affirmed that the country's gas transportation network is for sale to no one, including Russian gas monopoly Gazprom. At the same time, Russia has made it clear that it is willing to cooperate with the European Union in any project to modernize the network, which includes more than 60,000 kilometers of pipe plus 71 compressed air plants and 13 underground gas storage facilities. Last year, it carried over three-quarters of natural gas exports from Russia to Europe.

Two events coincided this week to point towards further complications in Euro-Caspian energy geo-economics. Azerbaijan has signed a memorandum of understanding (MoU) with Georgia and Romania to promote liquefied natural gas (LNG) transportation across the Black Sea, and has separately announced the possibility of postponing a decision on the start-up of production from the offshore Shah Deniz Two natural gas field until 2017 (press reports cite various years from 2016 to 2018).

Last month, after years of on-again, off-again negotiations, Iran and Pakistan signed an agreement for a bilateral natural gas pipeline to be sourced from the South Pars deposit. India has since asked to reopen negotiations, from which it had earlier withdrawn, to make the project trilateral. While pricing issues between Iran and Pakistan appear to be resolved, questions about pipeline security in Pakistan, pricing with India, and the role or non-role of China, are only three of the sets of problems still awaiting resolution.

An anonymous but highly placed representative of the Azerbaijan state oil company, SOCAR, confided to Trend News Agency in Baku last week that agreement has been reached with Turkey concerning the price of Azerbaijani gas and its transit through Turkish territory.

As you know, Europeans with an interest in energy affairs get very excited when discussing the source of the gas they’ll in 5-10 years. Especially in Italy, where Berlusconi’s center-right government is openly defying EU policy on the matter and nurturing very close ties to Russia, the debate tends to be quite heated and often partisan. We would like then to here the view of an informed and independent outsider on this.

Эксклюзивное интервью 1news.az с профессором Института европейских, российских и евразийских исследований Карлетонского университета (Канада), Роберт Катлером (Robert Cutler).

Энергетические конференции в регионе Каспийского моря в последние годы сменяют друг друга с такой головокружительной скоростью, что некоторые представители отрасли и правительственные чиновники перестали относиться к ним серьезно. Правда, иногда сами организаторы получают от них больше пользы, если принимать во внимание резко возросшие сборы за участие. Тем не менее, проходящая в настоящий момент Международная конференция и нефтегазовая выставка, судя по всему, может стать исключением их этого правила. Эта семнадцатая по счету из серии подобных конференций и пройдет она в Баку.

Energy conferences in the Caspian Sea region have come so fast and furious in recent years that some industry and government figures consider them a dime a dozen. In fact, the organizers are sometimes the ones who draw most advantage from them, in view of steep fees for participation. Nevertheless, the current International Oil and Gas Conference and Exhibition looks to be an exception. It is the seventeenth in the series hosted in Baku.

Robert M. Cutler amerikai politológus-tanácsadó szerint a közép-európai országoknak muszáj együttműködniük az orosz befolyás csökkentéséért. Az oroszok a gázt politikai fegyverként használják, és a nagy nemzetközi vezetékekért folyó küzdelem akár fegyveres konfliktusok kitörésében is szerepet játszik. Az azeri gázmezők válthatják meg térségünket a moszkvai nyomástól.

Petroleum Industry Review: In your opinion, how will the international energy market change, given the high energy demand (in the EU and the U.S. energy consumption increased by more than 40% since 1970, in Japan it doubled and in China it is more than four times higher) but also the decrease of the world hydrocarbons resources? What is your opinion concerning alternative energy sources? Is renewable energy a solution for the world economy during this time of crisis? Is it a solution for the future?

With moderate fanfare, yet another multilateral economic cooperation agreement was signed among a limited number of the Soviet successor states this month, in Astana, the capital of Kazakhstan. Belarus, Kazakhstan and Russia signed up to a customs union in the margin of a meeting of the EurAsian Economic Community (EurAsEC), which also counts Tajikistan and Kyrgyzstan as members.

В столице Казахстана Астане под несколько приглушенные звуки фанфар было заключено очередное многостороннее соглашение об экономическом сотрудничестве между некоторыми из стран-наследниц Советского Союза. На встрече Евроазиатского экономического сообщества (ЕврАзЭС) три его члена (Белоруссия, Казахстан и Россия) из пяти (остальные — это Таджикистан и Киргизия) подписали договор о вступлении в Таможенный союз.

Turkmenistan has broken Russia’s stranglehold on its gas exports by opening a pipeline through Uzbekistan and Kazakhstan to China. The country’s president Gurbanguly Berdimuhamedov has just made his first trip to New Delhi where the Turkmenistan-Afghanistan-Pakistan-India natural gas pipeline project was discussed. Earlier this year a short pipeline was opened in order to increase exports to Iran, and gas is in the process of being identified for eventual export to Europe via a Trans-Caspian Gas Pipeline and the EU’s Southern Corridor. The era of Russian control over the country’s exports is over, and Ashgabat is taking care to make certain that it is not squeezed between Moscow and Beijing.

Embattled oil giant BP, which is looking for ways to meet bills arising from the Deepwater Horizon blowout in the Gulf of Mexico, has numerous assets it could sell to meet its obligations, but reports that these could include Caspian Sea projects appear to be unfounded.

Investors are pouring money back into China's stock markets, helping to reverse a plunge of more than 27% this year, on signs that the government's efforts to cool the economy are having their effect and on the hope that policy tightening measures may thus be relaxed.

Political friction over economic issues between the US and China has faded for the time being, but its sources remain and may reappear at any time.

President Nursultan Nazarbaev of Kazakhstan publicly endorsed the Nabucco natural gas pipeline earlier this month, then criticized Europe for putting too much talk into the project and not enough action.

Bulgaria and Romania have over the course of the summer been setting down their markers as regards the Nabucco and South Stream pipeline projects in an on-again, off-again manner. What they finally decide may determine which pipelines from the South Caucasus and Turkey get built where in Southeast Europe. Major investment decisions are also on the line in coming months. It is consequently little exaggeration to say that the next year, if not the next half-year, will set the main lines of the blueprint for Caspian/Black Sea hydrocarbon development for the better part of the oncoming decade.

In mid-August, BP Azerbaijan announced that oil from Turkmenistan is now entering the BTC in Azerbaijan and will constitute between four and five percent of its present throughput of 800,000 barrels per day (bpd), which is being upgraded to 1.2 million bpd with a view towards eventual inclusion of oil from Kazakhstan’s offshore Tengiz field. These practical steps of cooperation with Azerbaijan, combined with the mid-August announcement in Ashgabad of new directions in Turkmenistan’s gas export policy, point the way towards a European direction for future Turkmenistani production, not forgetting China and the possibility of South Asia, while Iran is given only marginal reference and Russia is ignored.

"We are currently constructing the East-West Pipeline [across southern Turkmenistan, which] will be laid along the coast of the Caspian Sea. … Nabucco is associated with this project." Thus spoke Turkmenistan's President Gurbanguly Berdimuhamedow at a press conference last week, as reported by many international sources, including Azerbaijan's Trend News Agency, despite the fact that these words did not appear in the official transcript of his remarks as cited by his government's news agency.

Kazakhstan's economy has responded strongly to the return of international demand for its energy, mining and manufacturing exports, growing at an 8% rate during the first half from the equivalent period in 2009. That is helping to fuel optimism that Astana looks like weathering the global financial crisis in much better shape than many other countries.