The New Worker

The Weekly paper of the New Communist Party of Britain

Oil imperialists will bleed black gold dry

The Caspian region - Capitalism's 21st century oil bonanza

Map of the caspian region

WHEN imperialism wants oil, it finds any means necessary to get it. Violent provocation is standard: war is oil, oil is war -- this is the way imperialism expects to gain control in the last and frequent resort.

In 1918 26 commissars of Baku in Azerbaijan were executed by White Guardists, backed by British and allied intervention forces keen to lay their hands on the rich Baku oil fields and to smash the Bolshevik government.

They failed then, but oil imperialism has never ceased to probe and exploit new inroads into the former Soviet Union in its quest for new markets. Since Gorbachov, the West's "free marketeers" have had a field day.

Russia and the so-called independent states, fading shadows of their former well-being, are little more than greedilyeyed locations on company boardroom strategic maps today -- resources of raw materials, minerals and energy above all else.

It might almost be said that the United States' Cold War maps of nuclear first strike targets in the Soviet Union, have now been replaced by Western corporate maps with economic targets. Imperialist economic interests, which was always behind the fear of nuclear war, has now struck -- as intended ever since the 1917 Bolshevik Revolution.

And what makes capitalism particularly rapacious is the merest whiff of oil. In the oil-rich former Soviet Union, in fact there is a huge sea of proven and potential capacity that, as a whole, rivals deposits anywhere else in the world.

But the undisguised corporate conquest of Russia and the former Soviet Republics is leaving a trail of blood and ruin in its wake. All to ensure that business as usual is not impeded and the rate of Western oil companies' profits is sustained. And the aim is to secure hundreds of billions in profits running for decades into the next century.

Former Republics, no longer part of a socialist economic structure of support as they had in the days of the Soviet Union, are selling out their fundamental interests to the highest oil- energy consortium bidder.

They find themselves descending into savage and bitter conflicts because the interests of imperialism, having aided the counter-revolution in the former Soviet Union, is pressuring states to walk a tightrope between Russia and Western interests. What the West hopes to do in the aftermath of conflict is to mop up once opposing forces have exhausted themselves.

What's happening with the former Soviet Union's oil, whose gaining and whose losing?

According to a London-based think tank report published in November by the Centre for Global Energy Studies (CGES) -- directed by the former Saudi Arabian oil minister Sheikh Ahmed Zaki Yamani -- oil production in the former Soviet Union from 1997 is set to increase.

The report explained that while there has been lower production from Russia and Azerbaijan, increases will balance this from Kazakhstan and Uzbekistan. While the study is cautious about Russian oil, it believes that: "The main increases in output are expected to come from the Caspian region companies of Kazakhstan and Azerbaijan" it said.

These are the two key "regions" now for Western interests. And talk of regions and sectors, incidentally, reveals the imperialist intent to ride roughshod over governments. This is also noticeable in the way the oil profits are portrayed as being divided between states and companies as though they were of equal standing.

The report wenton: "A continuous lack of investment in the Russian oil industry raises serious doubts about whether a recovery...can be sustained while the output contribution made by the joint ventures with foreign companies remains small. What is more, there are few clear signs of anything being done to break the log jam that is holding up the start of a number of large-scale joint ventures in Russia."

According to another report, the key fuel and energy projects in Russia itself failed to get off the ground due to problems over the "legal framework". Foreign investment remained "interested", but only in the fuel and energy sector in 1996.

To that end serious foreign investment is said to have been made in western Siberia (oil and gas). the Volga region (car and petro-chemical) and eastern Siberia (ferrous metallurgy and timber). But the battle is in and around the Caspian Sea area between Western oil consortiums, former Republics in the region and Russia.

Siberia is no longer the focus for LUKoil, Russia's largest oil company, even though it has a few strategic exploration rights dating from the beginning of the 90s. In the early 1980s, western Siberia had proven oil fields stretching over an enormous three million square kilometres. Most of it is still untapped.

But whatever the Russian domestic crisis, it's business as usual for Western companies linking up with other Russian oil capitalists -- Yukos and Rosneft, for instance -- to exploit Siberia, the former Soviet Arctic and Far East.

It is imprecisely estimated that Russia has total oil deposits of between Iraq's 100 billion and Saudi Arabia's 256 billion barrels. But LUKoil's head Vagit Alekperov, former acting Soviet oil minister, said recently that the Caspian shelf is 'Project No l."

Newly appointed deputy secretary of the Russian Security Council Boris Berezovsky -- known as one of the so called Group of Six top capitalists in Russia -- has recently been making high level visits to all the key oil-strategic states to secure Russia's interests. He didn't meet opposite numbers, he met the Republic's premiers.

Although he is said to have officially denied such a purpose at the time, it is clear that oil was central to the visits. With the mounting economic, social and political crisis, efforts are being made to safeguard the gains of Russia's "New Rich" and secure lucrative profits from the former Republics.

On the list of those Berezovsky is said to have visited are the Chechen leaders -an issue for which he is specifically responsible. Nothing has changed the underlying factor which caused the war between Russia and Chechen separatists in the first place: oil.

Russia's capitalists are attempting to prevent Chechenia and the Caspian-area states concerned -- Georgia, Azerbaijan, Kazakhstan, Turkrnenistan and Armenia in particular -- from falling in line with the divide-and-rule strategy powerful Western companies are employing to secure control of all the oil interests inthe most significant parts of the former Soviet Union.

According to the Russian news agency Interfax, this is exactly what James Collins, leader of a US delegation to Azerbaijan at the end of November appeared to be suggesting when he said Washington is in favour of proposals to divide the Caspian into national sectors. A senior Russian diplomat interviewed by Interfax voiced concern that the states and countries of the Caspian region were being carved-up by this means.

Iran, incidentally, has secured oil deals in both Azerbailjan and Kazakhstan. This comes two years after the US had successfully stopped Azerbaijan's President Aliyev from bringing Iran into the Azerbaijan International Operating Company (AIOC).

Now, a new consortium has been set up which includes: Azerbaijan's State Oil. British Petroleum (BP), French Elf Aquitaine, Turkish Petroleum, LUKoil and Iran's Oil Industries Engineering and Construction. Kazakhstan has agreed to export around five million tons of its Tengiz oil to northern Iran.

Russia maintains that the Caspian is a lake not a sea, meaning that the bordering states of Kazakhstan, Turkmenistan, Azerbaijan, should deal co-operatively with Russia, not individually. In other words, Russia wants all of what has come to be called the "near abroad" to remain "in the Russian family". The former Republic's see this as restricting their expansionist options with Westem companies, so Moscow is being forced slowly to make concessions.

The point is that the mighty Western oil companies are determined not to let rival Russian capitalists, perform precisely the same job on theCaspian area when the West has the dominant financial and increasingly military clout from outside. This is clearly the stuff of endless conflicts, but it is also the means to Western dominance. The Caspian has 30 billion barrels of proven oil, but some suggest it may be as high as 250 -- at least on a par with Saudi Arabia.

Berezovsky and his partners in the Group of Six control a great deal of Russian oil: Sibneft, Sidanko, Yukos, Alfa Eko, Rosneft and others. These account for over half of the extraction, processing and export of Russian oil. But LUKoil, though not part of the Six, is linked to it through the Union of Oil Industrialists group. Russia's 20 private oil companies belong to this umbrella organisation.

These interests are pressing Chechenia's leaders, the Prermer Asian Maskhsadov particularly, to use Russian territory for oil transport and to be paid accordingly. But for Russia there are complications with Chechenia which leave the conflict far from settled.

Among them is Chechen Premier Maskhadov's war compensation claim, somewhere between $125-$150 billion or 6-700 trillion rubles; another relates to the Premier's as yet undisclosed documents apparently implicating Russian financial interests in wanting to keep the Chechen war going.

How concerned are imperialist oil interests about Chechenia at this time? A detailed report, apparently sent out from the US embassy in Moscow at the end of October 1996, laboured at some length on the prospects for the regeneration of the oil industrv infrastructure in Chechenia.

The study said the war -- apart trom some damaged pipelines - has left the processes largely intact. This is no surprise. Geologist and president of the Azerbaijan International Operating Company (AIOC) Terry Adams, said in early March this year, as the Chechen war raged threatening oil exports to the West: "It is a risk we clearly recognised when we started the project and it will be a continuing risk we will have to manage."

War is "managed" to secure Western profits, just as war is first created to "manage" what was "unmanageable" by civil means. Infact, more recently Adams was equally icy when he reflected on ethnic conflicts in Georgia: "These areas of localised disruption will persist. But we can manage the broader picture to accommodate them."

The US embassy report on Chechenia says the future of its highgrade oil will not be as great as before the war, but that it was possible to restore the pipeline as a transit route for Caspian oil. This is part of the Baku-Grozny-Novorissysk pipe-line for pumping Caspian oil and it's what the West's oil companies are concerned about: the oil infrastructure feeding into and from the Caspian Sea.

And to meet the practicalities this far flung oil empire-building demands, the Clinton administration has adopted what it calls a "multi-pipeline policy". The administration is keen to keep central Asian nations "independent" to keep Russian influence at bay, picking each off in turn and thereby maximising US and Western company profits.

And oil companies are searching every possible pipeline route to get around any obstacle: from Baku to the Turkish Mediterranean coast at Ceyhan; from the Black Sea Bulgarian port of Burgas to the Greek port of Alexandroupolis; from Chardzhou in Turkmenistan to Pakistan's new port of Gwardark via Afghanistan, and so the options multiply.

US ambassador to Azerbaijan Rick Kavelaric, was blunt when he emphasised the need to ensure: "That American companies get as much of a chunk as possible" of the oil free-for-all. The conditions for this were laid the moment the "independent" states were formed when US defence secretary William Perry made numerous shuttle missions signing defence agreements.

The current struggle over Nato's eastward expansion is clearly synchronised with Western economic interests. And Eduard Shevardnadze, former Soviet foreign minister, collaborator of Mikhail Gorbachov and recently elected President of Georgia, is a particular advocate of imperialist interests.

Apart from support of Nato's expansion he is busy making his state safe for corporate oil interests. He is promoting Georgia as the launch-pad for a "Eurasian Corridor" which will cut through Azerbailjan to the Caspian Sea and central Asia, and aims to avoid Russian territory.

Berezovsky apparently made more visits to Georgia than the other states. Which may also be linked to Shevardnadze's view that Russian oil barons were responsible for the assassination attempt on him last year.

Georgia formerly produced three million tons of oil a year and Shevardnadze aims to reclaim a third of that. His sights, like other former Republics, are set on new gas and oil exploration in the Black Sea. Lorries from Turkey and Georgia's Black Sea ports currently travel over hazardous roads. But these are being repaired courtesy of a World Bank loan.

Its no wonder that some analysts are speculating that, through Nato machinations, a Turkish-Georgian alliance is possible despite the Kurdish battle in the southeast of Turkey.

The future of the Georgian economy, what Shevardnadze calls "comprehensive and vital economic reforms", is quite lterally being drawn up with the World Bank and International Monetary Fund, according to an interview with Shevardnadze in the Wall Street Journal's November 1996 issue ofits threeyear-old quarterly Central European Economic Review (CEER).

This means the particularly severe provise enforced by the IMF will apply: a complete crackdown on any social-welfare spending. It will mean cutting the workforce by 30 per cent ending subsidies for bread and energy, and going over to the "free market". Such IMF conditions operate in Armenia too, where the social structure has been wrecked and poverty, unemployment and homelessness have become endemic.

According to the Russian daily Sovetskaya Rossiya, Russia's capitalists fail to realise the limitations of their power. western companies are by-passing Russia to run pipelines through Georgia and Turkey. It said that Russia's capitalists are temporary junior partner of Western interests.

The paper says, as soon as the correlation of forces changes in the Caucasus and central Asia, Georgia, Azerbaijan Armenia, Chechenia, Kazakhstan and Russia, they will simply be discarded or swallowed up. This "correlation" is the nub of US oil foreign policy proposing "national sectors" and the "multi-pipe line" strategy.

One Westem analyst has suggested that the Caspian resources could act as a counterpoise to the Organisation of Petroleum Exporting Countries (OPEC) Such a long-term strategic plan to create an alternative oil-bloc dominated by the US and other Western interests, virtually parallel to imperialist military expansion, will create a more precarious an dangerous world. But such competition will also drive the price of oil down fo US companies.

On 6 December 1996, a barely reported event took place -- the delayed signing of the Caspian Pipeline Consortium (CPC) agreement. According to Jeet Bindra, Chevron's senior vice-president: "We have agreed to build a pipeline that will unlock the reserves of the Caspian region." The consortium was set up in 1992 to build a 1,440 kilometre pipe line from Tengiz oil fields in Kazakhstan to Russia's Black Sea port of Novorossysk.

Many interests are involved in this agreement: three governments (Russia, Kazakhstan and Oman) and several mostly foreign, oil companies. The share allocation clearly indicates who benefits Russia (24 per cent), Kazakhstan(l9 pe cent) and Oman (7 per cent). But the biggest slice of 50 per cent is divided among the oil companies.

These are Chevron (15 per cent) an Oryx (1.75 per cent) (US), LUKoil (12.i per cent) and Rosneft-Shell (7.5 per cent) (Russia), AgipPetroli (2 percent) Otaly) Munaigaz (Kazakhstan) (1.75 per cent) and British Gas(1.75 per cent). All in all not much of a deal for Kazakhstan's people.

Two giant consortiums between them are capturing Azerbaijan and Kazakhstan oil. The Azerbaijan International Operating Company (AIOC), which will work the deposits in the Azerbaijan sector of the Caspian, and intends to invest $20 billion in the project.

The other consortium isTengizchevroil, which will extract oil in the Tengiz area of Kazakhstan along the Caspian coast. And also a $20 billion project is underway to modemise existing pipelines while new ones are being built to the Black Sea oil terminals at Novorissysk, Odessa, Poti and Batumi.

The AIOC consortium of Western oil companies from seven countries -- ineluding British Petroleum (BP), Amoco, Exxon, Pennzoil, Unocal and LUKoil was set up in the Azerbaijan capital of Baku in October 1995. Developing an offshore field may create as much as $100 billion over the next 30 years. The bulk, of course, will fill Western corporate coffers.

And in the geographically huge country of Kazakhstan the state oil sector, along with most of the rest of state industry, has been sold off allegedly to make the economy more effective for its citizens. But many big viable enterprises were sold off at ludicrously low prices and most deals were processed at iightning speed to complete the changeover before any of the consequences could come to light. It's a tale repeated throughout these states.

One Western lawyer aptly described their orgy of money-making: "Privatisation is lurching along. But progress is greased by bribes, chaos and threats of violence." Communists and trade unionists are now bearing the brunt of this as they resist the coming great Western oil theft of the Caspian Sea.