INHERITING THE SEA: CASPIAN NATIONS DREAM OF OIL WEALTH
A EurasiaNet Photo Essay by Steven Weinberg: 8/30/02

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On August 29, a Turkish state-sponsored engineering firm announced that it had finished studying the design of a proposed pipeline from Baku, Azerbaijan to Turkey’s port of Ceyhan on the Mediterranean. Former Soviet republics on the Caspian Sea have vied in recent years to become independent energy exporters, and the Baku-Tbilisi-Ceyhan pipeline (which would run through the capital of Georgia) represents their fondest hopes. However, though the Turkish firm indicated that it could soon submit a construction budget for the pipeline, nobody has guaranteed that the pipeline will go into service. As Steven Weinberg’s pictures show, Caspian countries are living in a present built by the Soviets and struggling to build their own economic futures.

Social and political instability in these countries has marred business development, though, and corrupt business practices have muted foreign companies’ interest in the region. As these photos show, the Soviet Union established an infrastructure for oil and gas extraction on the Caspian that remains intact. The laws that governed the sea have become obsolete, though, and the republics have failed to work out a successor set of laws. Kazakhstan, Turkmenistan, Azerbaijan and Georgia (which does not border the sea but draws gas from it) rest most of their economic hopes in the Caspian bed. But the means they will use to draw riches from the Caspian remain murky.

To be sure, international investors have shown interest in the region. BP, the world’s second-largest energy conglomerate, is leading the development of the Baku-Tbilisi-Ceyhan pipeline and has made other large capital investments in the region. Though the United States has vocally backed the so-called BTC project, which would create an oil source independent of Russia or the OPEC nations, construction on the pipeline has not begun and could face serious delays. Russia is leading another project, the Caspian Pipeline Consortium, in which several multinational energy companies have taken stakes. This pipeline will run from the Tengiz field in Kazakhstan to the Russian port of Novorossisysk.

Russia, as these pictures indicate, still looms large over the Caspian. Its energy companies are more sophisticated and better funded than any of the former republics’ state-sponsored outfits, and its geopolitical weight exceeds the smaller countries’. Even if Washington goes out of its way to support BTC – which might siphon off transport business from Iran – it will not necessarily provide the aid or enforce the efficiency that would make these small countries competitive with Russia. And without a strong international backer, oil and gas development will probably remain erratic and corrupt for several years. [For more on corruption, see the Open Society Institute’s Caspian Revenue Watch].

Russian influence may be dissipating, as American soldiers advise Georgia and as Turkey, a NATO member, seeks a more prominent role. But as these pictures show, Caspian energy runs on deep-rooted systems and confusing trends. The cycle of exploration and production that the Soviets established will be hard to break; time will tell if the cycle of promises and projections the former republics have set in motion will prove as powerful.

Editor’s Note: Steve Weinberg is a freelance journalist who has traveled extensively in the Caucasus. You can see more of his photography at www.stevenweinbergphoto.com.

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Posted August 30, 2002 © Eurasianet
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	The Central Eurasia Project aims, through its website, meetings, papers, and grants, to foster a more informed debate about the social, political and economic developments of the Caucasus and Central Asia. It is a program of the Open Society Institute-New York. The Open Society Institute-New York is a private operating and grantmaking foundation that promotes the development of open societies around the world by supporting educational, social, and legal reform, and by encouraging alternative approaches to complex and controversial issues. The views expressed in this publication do not necessarily represent the position of the Open Society Institute and are the sole responsibility of the author or authors.