Posted on 08/10/2008 3:04:59 PM PDT by BenLurkin
The force of Russia’s attack against Georgia this weekend sends a strong signal that Moscow is determined not to relinquish control over the oil-rich Caspian region.
Georgia has scant energy resources of its own, but hosts pipelines built by international oil majors to carry Caspian oil and gas to western markets. Its railways also transport substantial volumes of oil from the region to Black Sea ports.
The east-west energy corridor across Azerbaijan and Georgia to Turkey established with strong political backing from the US, has eroded Russia’s stranglehold over energy exports from one of the world’s few remaining untapped oil provinces
Dubbed the “pipeline for peace” by its western promoters in the 1990s, the 1m-barrels-a-day Baku-Tbilisi-Ceyhan (BTC) oil pipeline commissioned in 2006 has brought a new source of high-quality oil into the Mediterranean to compete with Russian supplies.
Meanwhile, the parallel South Caucasus gas pipeline to Turkey has freed Azerbaijan and Georgia of dependence on Russian gas and opened the possibility of a new source of supply route to European markets.
However, the conflict in Georgia will rock confidence in the security of the pipelines already dented last week when Kurdish separatists claimed responsibility for an explosion on the Turkish section of the BTC pipeline that halted deliveries, depriving world oil markets of about 1 per cent of supplies.
Kaan Nazli, the director of emerging markets at Medley Global Advisors, said prolongation of military hostilities would “deal a devastating blow to prospects of maintaining a safe non-Russian route [across the Caucasus] for Caspian and central Asian oil and gas”.
In particular, the conflict could mark a setback for European Union-backed plans to build the Nabucco pipeline across the Caucasus to bring Caspian and central Asian gas into Europe to ease dependence on Russian supplies.
Nabucco’s backers have so far failed to secure enough Caspian gas to fill the pipeline amid strong competition from Gazprom for supplies from Turkmenistan and Kazakhstan. But the Nabucco plan has spurred Russian efforts to build an additional gas pipeline into southern Europe across the Black Sea and to lock in additional supplies from Turkmenistan.
Analysts said Russia would hesitate to risk upsetting relations with its oil-rich Caspian neighbours by attacking Georgian energy export facilities.
Kazakhstan, the Caspian country with the biggest oil reserves, already controls Batumi oil port on the Black Sea and is seeking to invest in Georgian railways serving the terminal.
Azerbaijan has built an oil terminal at Kulevi further north on the Georgian coast and is financing the construction of a railway from Tbilisi, the Georgian capital, to Kars on the Turkish border to provide a new export route for Caspian oil.
Russian military aircraft bombed Poti, a container port on the Black Sea on Saturday, but avoided striking coastal oil terminals.
A claim by Ekaterina Sharashidze, the Georgian economic development minister, that Russian jets had targeted the BTC pipeline on Saturday was not independently verified.
A Russian foreign ministry official denied reports that Russia was preparing to blockade Georgian ports, but admitted that military checks on shipping could delay tanker loadings in the Black Sea.
Analysts said the conflict could deter Caspian oil and gas producers from committing oil and gas exports to routes across Georgia.
Gurbanguly Berdymukhammedov, president of Turkmenistan, offered on Friday to increase the volume of gas it had contracted to supply China through a new pipeline east out of central Asia.
Azerbaijan is considering an offer from Gazprom to import gas from its Caspian fields, a move that could sink the Nabucco pipeline’s prospects altogether.
SO ... Russia is doing what the US was accused of doing in Iraq.
The are invading Georgia to take complete control of the real estate, and destroy the pipeline, to force a deal for GazProm to transport the oil.
Model citizens of the world, aren’t they?
James Bond.
007.
Ah, so it is about OIL!
Meanwhile the U.S. will do everything to avoid drilling for oil.
If you like $4/gal, Thank Congress.
Pray for W and Our Troops
Where are all the worldwide neo-hippie protestors that preceded our UN sanctioned and pre-announced invasion of Iraq in 2003? Where is Code Pink? There are no where to be found, and the reason is that all those protestors cared about was criticising the U.S.
Great point.
It is time for us to mobilize and confront them at every venue, the workplace, conversations at the gas pump (already happening), when you hear some loud, boisterous lib yapping about Obama at a Chili’s, everywhere. No slack, no break, NO QUARTER! (no, I’m not talking about “change” here!—but in the days of yore, when men were men).
Do ya think this could have something to do with the drastic drop in oil prices? The severe drop was apparently an unforeseen occurrence by those buoyed by high oil prices. Taking 1million bbls/day, or even threatening to do so, will have serious market repercussions. Guess what the price of oil will do on Monday, if not already? I’m thinking oil will return to it’s recent highs, maybe even go higher. Strikes me as blatant market manipulation on Pootie Poot’s part. I prefer to look at it as another reason to Drill Here, Drill Now and another blow to the senate’s Gang of 10’s (Chambliss, Isakson, et al) attempt at providing the Dims cover for being so dang recalcitrant on the oil supply issue. I’m dreadfully embarrassed to say both of the senators mentioned above are mine. They are being duped under the guise of ‘compromise.’ Compromise from the left means never giving in, only rhetorical and legislative Orwellian gymnastics.
By the way, where are the anti-war activists? Shouldn’t they be protesting this ‘unilateral’ invasion by the Russian’s at the embassy in DC? Lets go hippies, time for some tie-dye, bongo-circles and hacky-sac.
the Deets
bttt
“Where are all the worldwide neo-hippie protestors that preceded our UN sanctioned and pre-announced invasion of Iraq in 2003? Where is Code Pink?”
If they protested ‘there’, like they did ‘here’, they would be shot dead in the streets, and left for others to see.
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