Which way will Central Asian oil flow?

uploaded by chowdawg September 3, 2008 at 11:50 am
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Which way will Central Asian oil flow? by chowdawg

In the wake of the recent violence in Georgia, Russia and the EU and the US have been centre stage in managing the fall-out, choosing sides and standing their respective grounds.  What has not been so in the limelight of late are the former Soviet-states, of which Georgia is just one of many.  The decisions they make, the partners they choose and the stances their hold is pivotal to determining not only the stability of the region, but they way in which the rest of us do business.  Central Asia, Uzbekistan, Kazakhstan, Turkmenistan and Azerbaijan in particular are huge oil producers.  Central Asia is also the geographical lynchpin of Asia; borders of the states go from China to Europe, cross both the Black and Caspian seas and hover over Turkey, Iran and Afghanistan.  This means that not only are the oil producers important, but the political stance of the region as a whole has a huge effect on where pipelines can be laid and who has access to them.

 It is important that we keep an eye not only on what Russia and the EU are saying, but what the Central Asia countries are saying.  A few things have happened in the last couple of days that begin to show the leanings of the states.  Last night Uzbek President Islam Karimov and Russia’s Putin signed a pipeline deal that would carry up to 30 billion cubic meters of gas from Turkmenistan and Uzbekistan, boosting Russian imports by 50 percent.

 

Gazprom will set up a joint venture with Uzbekneftegaz to construct the Uzbek leg of the pipeline along the existing transit route that begins in Turkmenistan and runs through Kazakhstan before reaching Russia, the Russian company said in a statement.  "We are interested in this both in commercial terms and as part of the responsibilities that we have as Russia's ally," Karimov said, Interfax reported.

Russia, Turkmenistan and Kazakhstan plan a separate pipeline that would also take Turkmen and Kazakh gas north to Russia. That pipeline would transport 20 bcm, and construction is scheduled to start late this year or early next year, Gazprom said on its web site.

With their energy exports, the Central Asian nations are making an effort to balance the geopolitical interests of the West with those of Russia and another key regional player, China. Turkmenistan and Kazakhstan have not ruled out a westward route across the Caspian Sea that would bypass Russia. Kazakhstan, Turkmenistan and Uzbekistan also entertain plans to send some of their gas eastward to China.

 The Ukraine is in turmoil over its stance towards the west.  President Viktor Yushchenko, who became a darling of the west during the Orange Revolution in 2004, is facing increased dissent in his government regarding his anti-Russian stance.  He has threatened to dissolve parliament and call elections after the collapse of the fragile ruling coalition.   He has recently gone as far as to accuse Prime Minister Yulia Tymoshenko (a supporter of Yushchenko during the voting in 2004) of treason for allegedly siding with Moscow over the conflict in Georgia.

  Mr Yushchenko's supporters walked out in protest following new laws trimming the president's powers. The laws were introduced by the pro-Russian opposition and backed by Prime Minister Yulia Tymoshenko's party.   All but one of 12 ministers from Mr Yushchenko's party boycotted Wednesday's cabinet meeting. "A political and constitutional coup d'etat has started in the parliament," Mr Yushchenko said in a televised speech.  "I will use my right to dissolve parliament and decree early elections if a new coalition is not formed within 30 days," he said.

The BBC's Russian affairs analyst Steven Eke says Mr Yushchenko's popularity is at rock bottom at the moment with opinion polls giving him single-digit levels of support. The prime minister and president are believed to be jockeying for position before next year's presidential election, though our correspondent says Mr Yushchenko's chances of winning with current popularity levels would be slim.

Mr Yushchenko has been a vociferous supporter of Georgia during the conflict but the prime minister's party on Tuesday blocked a parliamentary resolution condemning Moscow.

And U.S. Vice President Dick Cheney arrived in Azerbaijan as a first stop on a Central Asian tour, no doubt to see for himself and for the US which way the CIS governments are leaning.

 U.S. Vice President Dick Cheney assured Azerbaijan on Wednesday of America's "abiding interest" in the region's stability. It was the first stop on a tour of three ex-Soviet republics that are wary of Russia's intentions after its war with Georgia last month.

 Cheney said the principle of territorial integrity was endangered today, noting that they were meeting "in the shadow of the Russian invasion of Georgia." He added that U.S. President George W. Bush had sent him with a clear message that the United States had a "deep and abiding interest" in the stability and security of countries in the region.

 Azerbaijan has some of the largest oil and gas reserves in the former Soviet Union.

 The U.S. vice president later was to go to neighboring Georgia, where Washington is trying strengthen support for President Mikhail Saakashvili's U.S.-allied government, battered by last month's short war with Russia. The U.S. administration was to announce a US$1 billion economic aid package to help Georgia rebuild.

Cheney also planned to visit Ukraine, whose Western-leaning governing coalition has been plagued in infighting and growing wariness about Russia's intentions.

The head of Russia's powerful presidential Security Council criticized Cheney's planned tour, saying his real goal was to trade U.S. support for energy supplies in the region, and to make sure these countries had governments sympathetic to Washington.

Russia has also objected strongly to U.S. plans to place components of a missile defense shield in Poland and the Czech Republic — both former Soviet satellites — as well as to Western support for Kosovo's independence from traditional ally Serbia.

Washington also has courted Azerbaijan, trying to ensure its oil wealth is exported to the West bypassing Russia. Many European capitals are wary of Russia and its vast oil and gas wealth after disruptions in European-bound Russian gas and oil shipments exported via other former Soviet republics.

Stay tuned.

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Title: Which way will Central Asian oil flow?
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Created: Wed, 09/03/2008 - 11:50am
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