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4 A new dividing line
in Europe By M K Bhadrakumar
environmental factors but in effect
compelling Russia (and Kazakhstan) eventually to
reroute Caspian oil via the bypass pipeline of BTC
running through Turkey.
From the US point
of view, the developing Great Game over the
pipelines in the Black Sea region holds the
potential to isolate Russia strategically from the
EU, as the BTC, BTE and Nabucco
in
essence aim at reducing Europe's dependence on
Russian energy supplies.
Thus, at the end
of the day, Russia finds itself falling back on
its famous energy weapon to break out of the web
of containment that the US is weaving around it. A
three-pronged Russian energy offensive seems to be
in the making, which is hugely ambitious in scope
and is fraught with deep significance for the
geopolitics of Eurasia, and Russia's relations
with the EU in particular.
Russia
punctures US containment There are three
emerging dimensions to the developing Russian
energy strategy. First, Russia is pressing ahead
with the trans-Balkan oil pipeline known as the
Burgas-Alexandroupolis project, envisaging the
construction of a 280-kilometer pipeline from the
Bulgarian port of Burgas on the Black Sea to
Greece's Alexandroupolis on the Aegean.
Russian state companies will hold a 51%
stake in the project, with Bulgaria and Greece
holding 24.5% each. The project includes two sea
terminals - one in Burgas able to unload
150,000-tonne tankers from the Russian Black Sea
port of Novorossiisk, and the second in
Alexandroupolis for 150,000-300,000-tonne-tankers.
The $1 billion project has significant
implications. First, Russia has blunted the heavy
US pressure on Bulgaria and Greece not to go ahead
with the project. More important, the readiness of
the two allies of the US not to pay heed to
Washington's demarche and instead to proceed to
cooperate with Russia reveals that the US agenda
of evolving a Euro-Atlantic approach to the energy
dialogue with Russia is not a fait accompli
- at least, not yet.
That leaves
considerable scope for Moscow to work on the
energy-security concerns of the European countries
at the bilateral level, which would incrementally
help harmonize the overall climate of Russia-EU
partnership in the course of time. (The EU has
issued a formal statement welcoming the
Burgas-Alexandroupolis pipeline project despite
its potential to enhance Russia's profile in the
European energy market.)
Second, Russia is
positioning itself through the
Burgas-Alexandroupolis project as a major supplier
of energy for the countries of southeastern
Europe. This frustrates the US regional policy to
build up a tier of countries in southeastern
Europe, which work closely with the US efforts to
isolate Russia in the Black Sea region. (Putin
pointedly drew attention to the implications of
the Burgas-Alexandroupolis project for "global
security".)
Third, the Russian project
frustrates the US attempt to dictate the primacy
of the BTC as the key transportation route for
Caspian oil to the Western market. It preempts the
US attempt to pit Russia against Turkey in the
Black Sea region.
Fourth, Russia intends
to make the Burgas-Alexandroupolis pipeline a
virtual extension of the main 1,510km Caspian
Pipeline Consortium (CPC) that already connects
the oilfields in western Kazakhstan with the oil
terminal at Novorossiisk (which currently handles
90% of Russia's oil exports).
Russia is
now likely to work on increasing the CPC's
capacity. Russia hopes to have this pipeline
system linking CPC with Burgas-Alexandroupolis to
be used by Kazakhstan primarily for the export of
oil from its massive Tengiz and Kashagan
oilfields. In other words, Kazakhstan will
continue to depend on Russian pipelines for the
export of the bulk of its oil to the Western
market despite the sustained US attempts to
persuade Astana to bypass Russian pipelines.
The BTC currently pumps 300,000 barrels
per day of Caspian crude but expects to carry
500,000bpd by next year, half of which is expected
to come from Kazakhstan. That country needed a lot
of persuasion last year at the level of Bush and
Cheney to route part of its oil exports through
the BTC. The coming into being of the
Burgas-Alexandroupolis pipeline deals a body blow
to the BTC's expectations of attracting more
quantities of Kazakh oil. (The BTC's long-term
economic viability has always been in doubt.)
The multibillion-dollar expansion of
Tengiz oilfield is expected to double its
production by the end of this year. The Kashagan
oilfield is expected to come online shortly
thereafter. Inputs of Kazakh oil become critical
for BTC within less than a decade, but an expanded
CPC pipeline connecting the flow of Kazakh oil via
the Black Sea into the Russian-controlled
Burgas-Alexandroupolis pipeline works to the
detriment of the BTC. Somehow, at one stroke,
Russia seems to have knocked the bottom out of the
US strategic calculations in sponsoring the BTC.
A spectacular chapter in the Great Game
seems to be nearing its epitaph. In geopolitical
terms, Russia's strategy to keep Kazakhstan within
its sphere of influence gets reinforced
substantially. Significantly, immediately after
the signing of the Burgas-Alexandroupolis pipeline
project on March 15, Putin met with Kazakh
President Nurusultan Nazarbayev in Moscow on
Sunday and Monday and held detailed discussions
over the prospects of enhanced cooperation between
the two countries in the energy sector. After
their talks, Nazarbayev poured cold water on the
Western media reports in recent months speculating
that Kazakhstan was moving away from Russia's
sphere of influence toward the US camp.
He
asserted at a press conference on Monday in the
presence of Putin, "We are not competitors in the
oil-and-gas sector, we are partners. Russia has
resources and so has Kazakhstan. The fact that in
2006 alone Kazakhstan transported 43 million
tonnes of oil through Russian territory - and
there were 50 million tonnes in total - acts as
proof of this. Kazakhstan exported 24 billion
cubic meters of gas through Russia. We have major
joint ventures in the Caspian shelf - ventures
with a 50% stake. These projects are planned for
decades to come."
Putin on his part
stressed that particular attention was paid at the
summit with Nazarbayev to "transporting energy
resources, developing innovative projects and
creating joint ventures in the fuel and energy
sector". (Putin also revealed, inter alia,
that despite open expressions of reservation by
the US State Department, Kazakhstan would
participate in a joint venture with Russia for
establishing a uranium-enrichment center in
Russia.)
Finally, the
Burgas-Alexandroupolis pipeline will divert the
Caspian oil volumes necessary to the Odessa-Brody
pipeline in Ukraine. (Poland and Ukraine were
hoping to have direct access to Caspian oil via
the Odessa-Brody pipeline.) That is to say, the
attempts by Ukraine and Poland (one "New European"
and another aspiring "New European") to have
direct access to Caspian energy bypassing Russia
will remain a pipe dream.
This has serious
implications for a range of issues in the
geopolitics of central Europe and Eurasia.
Broadly, it gives scope for Russia incrementally
to build up the sinews of a relationship in
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