Towards the Control of Oil Resources in the Caspian Region

Rating:
Summary: The best study on caspian region since fall SU
Review: Amineh, M.P. (2000), Towards the Control of Oil Resources in the Caspian Region, (New York): St. Martin's Press 264.

With the disintegration of the Soviet Union new oil and gas sources have become available for the world. As energy supply will be one of the main problems of the coming millennium, the Caspian region (Russia, Iran, Turkmenistan, Kazakhstan, and Azerbaijan) as one of the major global oil and gas sources will play a crucial role in this respect. Amineh's book is one of the few recent studies that deal with the developments in the Caspian region since the fall of the Soviet Union. It is an important book to the current struggle for the control of energy reserves in this region

By looking at political, economic, strategic, historical, social, and cultural aspects this book draws a complex picture of the competition on exploitation and transport of energy resources from the Caspian region. The author shows how this struggle takes place between various actors: the advanced industrialised countries (the United States and Western Europe), their backed Transnational Corporations and the regional powers Russia, Turkey, Iran, and also China and Pakistan.

According to the author, the developments in the post-Soviet Central Asia and Caucasus cannot be set apart from the current structure in the International Relations and International Political Economy characterised by international trade, the transnationalisation of production and finance, and the internationalisation of state activities. Through an increasing economic and cultural interdependence this process reduces the power and effectiveness of governments at the nation-state level. This manifests itself especially in the involvement of transnational corporations and transnational oil corporations through joint ventures for the exploitation and export of the Caspian energy resources, the most important ones being the Kazakhstan-Chevron joint venture known as Tengizchevroil and the Azerbaijan Offshore Oil Project. As world wide energy demand will rise in the coming millennium the question on who will gain control of energy resources will be a major topic. All countries involved in the region and also the Central Asian countries themselves aim to hinder Russia from regaining dominance in the region. Up till now Russia controls the only existing pipeline and has used this as a means of pressure against Central Asian countries. The discussion on the construction of possible alternative energy outlets is a crucial issue in this context. According to the book: '[t]he problem with pipeline politics is that it must combine often opposing economic and political interests'. The United States does not want Iran to become dominant in the region and therefore rejects any possible pipeline that would run through Iranian territory. Georgia hopes for a Western pipeline. As a transit country it could profit from tariff revenues. Regional conflicts such as the war in Nagorno-Karabakh, Chechnya, the PKK issue in Turkey and the Taliban rule in Afghanistan as well as the civil war in Tajikistan are mentioned as major obstacles to co-operation in the region especially concerning the pipeline issue. Chapter VIII discusses the problem of the various possible short-term and long-term pipelines. Several alliances have been built around the Caspian's energy resources. Whereas the United States support Turkey's involvement in the region as a reaction to the US-sanctions Iran seeks close ties to Russia, especially in the nuclear field. The author outlines the involvement and activities as well as the contradictions of the various interested actors in the region. Russia sees it as a natural given and historical fact to be active in the region, showing this especially in the military field through their financial support of the Central Asian armies. However Russia's activities are constrained by its own economic problems. It therefore has to keep friendly relations to the West for investment in Russia. Iran and Turkey refer to their historical and cultural links to the Central Asian region in connection to their activities there. Iran has own large energy resources and hopes to be able to develop its resources by expanding its infrastructure toward Central Asia. Also other Asian countries, especially China and Pakistan who see the Central Asian energy resources as a necessary precondition for their own economic development try to develop closer ties to the region. The author looks in detail looks at the energy resources and major oil and gas projects in the former Soviet republics in the Caspian region: Kazakhstan, Azerbaijan and Turkmenistan

However, the exploitation and export of the Caspian energy resources is also constrained by various aspects. The struggle for power between the ruling faction and the popular Islamic oriented Welfare Party (now Virtue Party) in Turkey, or between the more liberal faction around president Khatami and the traditionalists around Ayatollah Khamenei in Iran, are obstacles to the involvement of these countries in the region and make other investors cautious to co-operate with them. According to the author another obstacle to development are the internal factors of the Central Asian countries themselves. Ethnic conflicts, poor infrastructure and technology, lack of commercial and legal expertise cause problems to attract outside investments. Further, the legal regime dispute around the demarcation of the Caspian Sea has hindered a rapid exploitation of the Caspian energy resources. These and other aspects contribute to the difficulties around the exploitation and export of the Caspian energy resources.

The passages on the various oil fields and joint ventures in the Caspian region are a bit too long. However, this book has made a brilliant attempt to cover the various aspects of the complex problems around the Caspian energy resources and the countries involved. It is the best contribution to the scarce literature on the Caspian region since the fall of the Soviet Union. As an introductory book it is highly recommendable to all those who are interested in the current developments of the Caspian region.