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Russia's single-minded pursuit of
energy
By Sergei Blagov
MOSCOW - All of a sudden, the Central Asian
energy "great game" is being echoed in Russia's media
maneuvers. With the exit earlier this week of US
financier Boris Jordan as CEO of Russia's popular NTV
channel, Russian media outlets have speculated that his
ouster might have been prompted by NTV's critical
coverage of Russia's energy ties with Central Asia,
notably Kazakhstan.
Last December, Jordan
approved airing of a special report, "Kazakhstan
Transit," which lashed out at the oil-export policies of
Kazakhstan. Top managers of Gazprom, Russia's natural
gas monopoly, were outraged by the report, which they
viewed as detrimental to some major deals of Gazprom in
Central Asia.
Moreover, the incident took
political coloration when on January 20, the US
ambassador to Russia, Alexander Vershbow, met Russia's
deputy Foreign Minister Georgy Mamedov to voice US
concern over Jordan's demise. This diplomatic move could
have raised more eyebrows in Moscow as some of NTV's
critics alleged that by airing controversial reports,
Jordan, a US citizen, aimed at damaging Russia's energy
interests in the region.
Subsequently, the
Russian NG daily newspaper commented that Jordan was
swapped for 38 billion cubic meters of Turkmen and Uzbek
gas, the amount that would be transited every year under
an upcoming deal between Gazprom and KazTransGas, the
Kazakh gas transit monopoly. Although the agreement is
yet to be finalized, notably the deal with Turkmenistan,
the stakes are clearly high.
For Russia,
Kazakhstan is not just a Central Asian country of 15
million people and 3 million square kilometers, a vast
tract of empty steppe which stretches from the Caspian
Sea to China. It is also a nation with huge oil
reserves, as well as an important transit route from
gas-rich Turkmenistan.
Not surprisingly, the
Russian government has been keen to remain in charge of
lucrative business to transit oil from Central Asia.
Last October, Russia's deputy Prime Minister, Viktor
Khristenko, announced that in 2003 Kazakhstan will
funnel 19 million tons of crude oil through Russian
pipelines, compared to an estimated 17.5 million in
2002.
Some Russian oil firms moved to lobby
against the Kazakh quota so as to increase their own
exports, but the Russian government seemingly remains
firm. On January 15, Khristenko stated that the Kazakh
oil transit quota of 19 million tons "would not be
reviewed".
Moscow also has defense interests in
Kazakhstan. Last October, Russia approved four
agreements with Kazakhstan on the long-term lease of
Russian military facilities, "The Central State-Run
Testing Site," Sary-Shagan and Emba testing sites, as
well as an airforce testing site, with lease payments
totaling more than US$20 million a year.
In
recent years, Kazakhstan has tended to support Russia on
a variety of post-Soviet issues. For instance, last
November some 2,000 Chechen refugees asked Kazakhstan
for asylum. Kazakh President Nursultan Nazarbayev
replied by stating that the issue of Chechen refugees is
"an internal affair of Russia, our neighbor and
strategic partner".
In the meantime,
Kazakhstan's romance with Western investors has dealt a
sensitive blow. Last December, a consortium led by
ChevronTexaco announced that it would shelve a
long-planned $3 billion expansion project for the Tengiz
oil field on Kazakhstan's Caspian shore. ChevronTexaco,
the largest foreign investor in the former Soviet Union,
owns half of the Tengiz consortium, which has invested
$2 billion so far in rehabilitating the Tengiz field.
Under the expansion plan, Tengiz would produce
450,000 barrels per day by 2005, compared to 260,000
today, doubling revenues for all partners. In addition
to ChevronTexaco's 50 percent, ExxonMobil owns 25
percent, Kazakh oil and gas monopoly KazMunaiGaz owns 20
percent and LukArco owns 5 percent.
The
cancellation of the huge project - nearly double the
size of Kazakhstan's annual budget - came at an awkward
time for the Kazakh government - often synonymous with
the family of President Nursultan Nazarbayev. Moreover,
foreign direct investments in Kazakhstan brought an
unwanted by-product: allegations of bribes and
kickbacks, known as "Kazakhgate".
Incidentally,
Nazarbayev is in Switzerland from January 20-28,
officially for talks with Swiss officials and to attend
the World Economic Forum in Davos. However, Nazarbayev's
opponents argued that the trip was designed to deal with
"Kazakhgate". Bank accounts in Swiss banks of some $60
million reportedly held under the names of Nazarbayev
and other leading Kazakh government officials in Pictet
and Credit Agricole banks in Geneva reportedly remain
frozen pending the Swiss investigation. A US grand jury
in New York is also conducting an inquiry into possible
corruption involving Kazakh officials.
The
Eurasia web site, affiliated with Kazakh opposition
leader Akezhan Kazhegeldin, speculated that Nazarbayev's
lawyers might explore a deal with Swiss investigators
under which the Kazakh president would be offered
immunity from prosecution in return for his testimony
against others implicated in the investigation.
"Kazakhgate" emerged in 2002 when in April
Kazakh Prime Minister Imangali Tasmagambetov conceded
the existence of secret Swiss accounts in the
president's name, but he indicated that Kazhegeldin, who
was prime minister at the time, was responsible for
opening these accounts without Nazarbayev's knowledge.
Incidentally, the Kremlin had a similar
experience. Two years ago, former Kremlin kingmaker
Pavel Borodin narrowly escaped trial in Switzerland on
money laundering charges, after three months in US jail.
Under former Russian president Boris Yeltsin, Borodin
was in charge of the Kremlin's real estate. He was
arrested in New York in January 2001, as Swiss
prosecutors claimed they had evidence that Borodin had
received at least $25 million from a Swiss building
company in exchange for lucrative contracts for
restoring the Kremlin worth of more than $500 million.
Swiss prosecutors failed to produce evidence and
Borodin's case dropped into irrelevance. However, Moscow
arguably might be tempted to view "Kazakhgate" and the
cancellation of the Tengiz project as Kazakhstan's
weakness so as to secure more lucrative transit deals.
(©2003 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com
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