US pipeline games with China

I am appalled at the mentality of Americans and the English when they are asked a question about why their countries are sending troups to Afghanistan. It seems that few have even a vague notion of why this expensive military invasion persists. Even more appalling is the Western media reports that purport to explain what is happening in China's Xinjiang province. I refer here to the recent regional disturbance between the Uygurs and Han people in Xinjiang.

Western media would have one believe this civil unrest is the result of Chinese communist dictators squelching the rights of outlying indigenous peoples. Of course, one expects nothing less of Western media journalism which supports the farcical notion of democracy of the West spread to the lucky countries of Asia and the Mideast.

Yet the real story of the conflicts in this outlying area of China may be quite different than the mainstream media insinuates. As with many other sensationalist propaganda from the West, the essential detail of energy pipeline politics is omitted from the front page analysis.

Below, F. William Engdahl, one of my favorite economists, has a more rational explanation for the civil unrest in Xinjiang recently...one that details the energy pipeline concerns of the U.S. in constraining the unstoppable Sino/Soviet alliance of providing energy to Europe and Asia. Indeed, all conflicts now about 'democracy' can be re-interpreted as 'oiligarchic' concerns.

Is Washington Playing a Deeper Game with China?

by F. William Engdahl
author of Full Spectrum Dominance: Totalitarian Democracy in the New World Order
July 13, 2009
Source
July 12 —After the tragic events of July 5 in Xinjiang Uyghur Autonomous Region in China, it would be useful to look more closely into the actual role of the US Government’s ”independent“ NGO, the National Endowment for Democracy (NED). All indications are that the US Government, once more acting through its “private” Non-Governmental Organization, the NED, is massively intervening into the internal politics of China.

The reasons for Washington’s intervention into Xinjiang affairs seems to have little to do with concerns over alleged human rights abuses by Beijing authorities against Uyghur people. It seems rather to have very much to do with the strategic geopolitical location of Xinjiang on the Eurasian landmass and its strategic importance for China’s future economic and energy cooperation with Russia, Kazakhastan and other Central Asia states of the Shanghai Cooperation Organization.

The major organization internationally calling for protests in front of Chinese embassies around the world is the Washington, D.C.-based World Uyghur Congress (WUC).

The WUC manages to finance a staff, a very fancy website in English, and has a very close relation to the US Congress-funded NED. According to published reports by the NED itself, the World Uyghur Congress receives $215,000.00 annually from the National Endowment for Democracy for “human rights research and advocacy projects.” The president of the WUC is an exile Uyghur who describes herself as a “laundress turned millionaire,” Rebiya Kadeer, who also serves as president of the Washington D.C.-based Uyghur American Association, another Uyghur human rights organization which receives significant funding from the US Government via the National Endowment for Democracy.

The NED was intimately involved in financial support to various organizations behind the Lhasa ”Crimson Revolution“ in March 2008, as well as the Saffron Revolution in Burma/Myanmar and virtually every regime change destabilization in eastern Europe over the past years from Serbia to Georgia to Ukraine to Kyrgystan to Teheran in the aftermath of the recent elections.

Allen Weinstein, who helped draft the legislation establishing NED, was quite candid when he said in a published interview in 1991: "A lot of what we do today was done covertly 25 years ago by the CIA."

The NED is supposedly a private, non-government, non-profit foundation, but it receives a yearly appropriation for its international work from the US Congress. The NED money is channelled through four “core foundations”. These are the National Democratic Institute for International Affairs, linked to Obama’s Democratic Party; the International Republican Institute tied to the Republican Party; the American Center for International Labor Solidarity linked to the AFL-CIO US labor federation as well as the US State Department; and the Center for International Private Enterprise linked to the US Chamber of Commerce.

The salient question is what has the NED been actively doing that might have encouraged the unrest in Xinjiang Uyghur Autonomous Region, and what is the Obama Administration policy in terms of supporting or denouncing such NED-financed intervention into sovereign politics of states which Washington deems a target for pressure? The answers must be found soon, but one major step to help clarify Washington policy under the new Obama Administration would be for a full disclosure by the NED, the US State Department and NGO’s linked to the US Government, of their involvement, if at all, in encouraging Uyghur separatism or unrest. Is it mere coincidence that the Uyghur riots take place only days following the historic meeting of the Shanghai Cooperation Organization?

Uyghur exile organizations, China and Geopolitics

On May 18 this year, the US-government’s in-house “private” NGO, the NED, according to the official WUC website, hosted a seminal human rights conference entitled East Turkestan: 60 Years under Communist Chinese Rule, along with a curious NGO with the name, the Unrepresented Nations and Peoples Organisation (UNPO).

The Honorary President and founder of the UNPO is one Erkin Alptekin, an exile Uyghur who founded UNPO while working for the US Information Agency’s official propaganda organization, Radio Free Europe/Radio Liberty as Director of their Uygur Division and Assistant Director of the Nationalities Services.

Alptekin also founded the World Uyghur Congress at the same time, in 1991, while he was with the US Information Agency. The official mission of the USIA when Alptekin founded the World Uyghur Congress in 1991 was “to understand, inform, and influence foreign publics in promotion of the [USA] national interest…” Alptekin was the first president of WUC, and, according to the official WUC website, is a “close friend of the Dalai Lama.”

Closer examination reveals that UNPO in turn to be an American geopolitical strategist’s dream organization. It was formed, as noted, in 1991 as the Soviet Union was collapsing and most of the land area of Eurasia was in political and economic chaos. Since 2002 its Director General has been Archduke Karl von Habsburg of Austria who lists his (unrecognized by Austria or Hungary) title as “Prince Imperial of Austria and Royal Prince of Hungary.”

Among the UNPO principles is the right to ‘self-determination’ for the 57 diverse population groups who, by some opaque process not made public, have been admitted as official UNPO members with their own distinct flags, with a total population of some 150 million peoples and headquarters in the Hague, Netherlands.

UNPO members range from Kosovo which “joined” when it was fully part of then Yugoslavia in 1991. It includes the “Aboriginals of Australia” who were listed as founding members along with Kosovo. It includes the Buffalo River Dene Nation indians of northern Canada.

The select UNPO members also include Tibet which is listed as a founding member. It also includes other explosive geopolitical areas as the Crimean Tartars, the Greek Minority in Romania, the Chechen Republic of Ichkeria (in Russia), the Democratic Movement of Burma, and the gulf enclave adjacent to Angola and the Democratic Republic of the Congo, and which just happens to hold rights to some of the world’s largest offshore oil fields leased to Condi Rice’s old firm, Chevron Oil. Further geopolitical hotspots which have been granted elite recognition by the UNPO membership include the large section of northern Iran which designates itself as Southern Azerbaijan, as well as something that calls itself Iranian Kurdistan.

In April 2008 according to the website of the UNPO, the US Congress’ NED sponsored a “leadership training” seminar for the World Uyghur Congress (WUC) together with the Unrepresented Nations and Peoples Organization. Over 50 Uyghurs from around the world together with prominent academics, government representatives and members of the civil society gathered in Berlin Germany to discuss “Self-Determination under International Law.” What they discussed privately is not known. Rebiya Kadeer gave the keynote address.

The suspicious timing of the Xinjiang riots

The current outbreak of riots and unrest in Urumqi, the capital of Xinjiang in the northwest part of China, exploded on July 5 local time.

According to the website of the World Uyghur Congress, the “trigger” for the riots was an alleged violent attack on June 26 in China’s southern Guangdong Province at a toy factory where the WUC alleges that Han Chinese workers attacked and beat to death two Uyghur workers for allegedly raping or sexually molesting two Han Chinese women workers in the factory. On July 1, the Munich arm of the WUC issued a worldwide call for protest demonstrations against Chinese embassies and consulates for the alleged Guangdong attack, despite the fact they admitted the details of the incident were unsubstantiated and filled with allegations and dubious reports.

According to a press release they issued, it was that June 26 alleged attack that gave the WUC the grounds to issue their worldwide call to action.

On July 5, a Sunday in Xinjiang but still the USA Independence Day, July 4, in Washington, the WUC in Washington claimed that Han Chinese armed soldiers seized any Uyghur they found on the streets and according to official Chinese news reports, widespread riots and burning of cars along the streets of Urumqi broke out resulting over the following three days in over 140 deaths.

China’s official Xinhua News Agency said that protesters from the Uighur Muslim ethnic minority group began attacking ethnic Han pedestrians, burning vehicles and attacking buses with batons and rocks. "They took to the street...carrying knives, wooden batons, bricks and stones," they cited an eyewitness as saying. The French AFP news agency quoted Alim Seytoff, general secretary of the Uighur American Association in Washington, that according to his information, police had begun shooting "indiscriminately" at protesting crowds.

Two different versions of the same events: The Chinese government and pictures of the riots indicate it was Uyghur riot and attacks on Han Chinese residents that resulted in deaths and destruction. French official reports put the blame on Chinese police “shooting indiscriminately.” Significantly, the French AFP report relies on the NED-funded Uyghur American Association of Rebiya Kadeer for its information. The reader should judge if the AFP account might be motivated by a US geopolitical agenda, a deeper game from the Obama Administration towards China’s economic future.

Is it merely coincidence that the riots in Xinjiang by Uyghur organizations broke out only days after the meeting took place in Yakaterinburg, Russia of the member nations of the Shanghai Cooperation Organization, as well as Iran as official observer guest, represented by President Ahmadinejad?

Over the past few years, in the face of what is seen as an increasingly hostile and incalculable United States foreign policy, the major nations of Eurasia—China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan have increasingly sought ways of direct and more effective cooperation in economic as well as security areas. In addition, formal Observer status within SCO has been given to Iran, Pakistan, India and Mongolia. The SCO defense ministers are in regular and growing consultation on mutual defense needs, as NATO and the US military command continue provocatively to expand across the region wherever it can.

The Strategic Importance of Xinjiang for Eurasian Energy Infrastructure

There is another reason for the nations of the SCO, a vital national security element, to having peace and stability in China’s Xinjiang region. Some of China’s most important oil and gas pipeline routes pass directly through Xinjiang province. Energy relations between Kazkhstan and China are of enormous strategic importance for both countries, and allow China to become less dependent on oil supply sources that can be cut off by possible US interdiction should relations deteriorate to such a point.

Kazak President Nursultan Nazarbayev paid a State visit in April 2009 to Beijing. The talks concerned deepening economic cooperation, above all in the energy area, where Kazkhastan holds huge reserves of oil and likely as well of natural gas. After the talks in Beijing, Chinese media carried articles with such titles as “"Kazakhstani oil to fill in the Great Chinese pipe."

The Atasu-Alashankou pipeline to be completed in 2009 will provide transportation of transit gas to China via Xinjiang. As well Chinese energy companies are involved in construction of a Zhanazholskiy gas processing plant, Pavlodar electrolyze plant and Moynakskaya hydro electric station in Kazakhstan.

According to the US Government’s Energy Information Administration, Kazakhstan’s Kashagan field is the largest oil field outside the Middle East and the fifth largest in the world in terms of reserves, located off the northern shore of the Caspian Sea, near the city of Atyrau. China has built a 613-mile-long pipeline from Atasu, in northwestern Kazakhstan, to Alashankou at the border of China's Xinjiang region which is exporting Caspian oil to China. PetroChina’s ChinaOil is the exclusive buyer of the crude oil on the Chinese side. The pipeline is a joint venture of CNPC and Kaztransoil of Kazkhstan. Some 85,000 bbl/d of Kazakh crude oil flowed through the pipeline during 2007. China’s CNPC is also involved in other major energy projects with Kazkhstan. They all traverse China’s Xinjiang region.

In 2007 CNPC signed an agreement to invest more than $2 billion to construct a natural gas pipeline from Turkmenistan through Uzbekistan and Kazakhstan to China. That pipeline would start at Gedaim on the border of Turkmenistan and Uzbekistan and extend 1,100 miles through Uzbekistan and Kazakhstan to Khorgos in China's Xinjiang region. Turkmenistan and China have signed a 30-year supply agreement for the gas that would fill the pipeline. CNPC has set up two entities to oversee the Turkmen upstream project and the development of a second pipeline that will cross China from the Xinjiang region to southeast China at a cost of some $7 billion.

As well, Russia and China are discussing major natural gas pipelines from eastern Siberia through Xinjiang into China. Eastern Siberia contains around 135 Trillion cubic feet of proven plus probable natural gas reserves. The Kovykta natural gas field could give China with natural gas in the next decade via a proposed pipeline.

During the current global economic crisis, Kazakhstan received a major credit from China of $10 billion, half of which is for oil and gas sector. The oil pipeline Atasu-Alashankou and the gas pipeline China-Central Asia, are an instrument of strategic 'linkage' of central Asian countries to the economy China. That Eurasian cohesion from Russia to China across Central Asian countries is the geopolitical cohesion Washington most fears. While they would never say so, growing instability in Xinjiang would be an ideal way for Washington to weaken that growing cohesion of the Shanghai Cooperation Organization nations.

Copyright © 2009 F. William Engdahl

US Oil Hegemony - Bye Bye

Watching the dramatic gesticulations of America's hegemons trying to intimidate the planet into being their oyster, has been both unnerving and amusing. The last eight years of American superpower prowess has been a nightmare for the world; now the nightmare of America's creation has engulfed and crippled it's own economy and people.

All the turmoil and violence inflicted on the Mideast, Iraq, South Africa, South America has all been for one purpose; domination of the oil market to keep the dollar as world reserve currency. At the centre of this struggle has been the BTC Nabucco pipeline running through Georgia and Turkey. Another pipeline through Afghnistan to Pakistan and then India has been the reason for the USA's bombing, invasion and murder of people in these areas to secure that oil corridor.

However, from the time of the Bill Clinton presidency, American officials have made it clear that they view the BTC pipeline as part of a grand strategy to isolate Russia further in the region and, in the process, secure guaranteed supplies of oil and gas from the Caspian region. The argument being put forward in the West is that Caspian oil will diminish forever the influence of the Organisation of Petroleum Exporting Countries (OPEC). However, according to many oil experts, it was realpolitik and not market economics that created the BTC pipeline. Source

The US Oiligarchy's big mistake was poking the Bear with it's plans to build missile bases all along the Russian Caucasas border (to of course secure dominance of oil corridors). Had Saakashvili not made his fatal error in invading, South Ossetia, the Russian bear would have just hunkered along with it's honey pot of oil in tow in a congenial mood. In this sense, Saakashvili did the world a favor by waking up the power of Russia, the only country in the world who has stood up to the murderous regime of Washington since 2001.

In the midst of the economic destruction of this last week, another story much more important has been overlooked: the return of the world to a multipolar balance. All the schemes and propaganda of the Bush Administration have only undermined their own odious objectives and assured its own destruction.

"The world runs on oil and gas and those who control it will wield commercial and geopolitical power. The United States simply cannot afford to allow Russia and Iran to dominate the energy resources of the Caspian," wrote Sheila N. Heslin, who was a senior member of President Bill Clinton's National Security Council in charge of Russian, Eurasian and Ukrainian affairs, in an article published in 1997. As the U.S. unfolds its blueprint for the region, other major countries will also be charting out their strategies for the new "great game" in Central Asia and the Caucasus. Source

A bitterly delicious twist of fate, indeed. As the American empire disintegrates, we can only hope that the remaining powers will be wiser and that the American model of greed at any cost to people, will be abandoned.

The article below details quite nicely the really important news of the past two weeks: the shifting in the balance of powers controlling oil supply and transport corridors. America has lost it's imperial aspirations much to the relief of the rest of the world.

US standing in Caspian drips away















By M K Bhadrakumar Oct 11, 2008
On Sunday, en route to Astana, Kazakhstan, after a "very nice trip to India", US Secretary of State Condoleezza Rice told reporters accompanying her, "I just wish I could have stayed longer in India". New Delhi must be one of a handful of capitals where officials from the George W Bush administration receive an expectant welcome, and the doomsday warnings emitted from New York and Washington do not seem to matter.

But there was another reason for Rice's trepidation as her jet descended to Astana - US influence and prestige in Central Asia and the Caspian region has again plummeted. Rice realizes there is hardly any time left to retrieve lost ground, and the Bill Clinton administration's legacy in the Caspian and Central Asia has largely dissipated. Central to this has been the failure of the Bush administration to handle relations with Russia. The stocktaking has already begun.

Writing in The Washington Post on Wednesday, former secretaries of state Henry Kissinger and George Shultz rebuked the Bush administration for its "drift towards confrontation with Russia" and pointed out that "isolating Russia is not a sustainable long-range policy". They said much of Europe is "uneasy". Their target was Rice, a self-styled "Sovietologist", and her inexcusably vitriolic attack on the Kremlin in a speech at the Marshall Fund of Germany in Washington on September 18.

Confrontational diplomacy
Kissinger and Shutlz particularly cautioned the Bush administration against encouraging confrontational diplomacy towards Russia by its neighbors, which would be counter-productive. Most certainly, there is already a backlash in the region. Azerbaijan, which the Bush administration once regarded as close regional ally, snubbed Vice President Dick Cheney during his visit to the capital, Baku, last month. Washington pretended not to notice, and deputed to Baku last week yet another top official - Deputy Secretary of State John Negroponte - whom the State Department's website describes as Rice's "alter ego".

On arrival on October 2, Negroponte forthwith said he was carrying a "simple message" - that the US has "deep and abiding interests" in Azerbaijan and these are "important interests" which hold implications for regional and international security. He implied Washington that was not going to roll over and give way to Moscow in the southern Caucasus.

Against the backdrop of the conflict in the Caucasus in August, the Caspian Sea basin has become a focal point. This was inevitable. At the core lies Washington's determination to avoid Russian participation in the European energy-supply chain. To quote Ariel Cohen of US conservative think-tank the Heritage Foundation, "Since August, US diplomats have been busy trying to shore up Washington's geopolitical position all around the Caspian, including Baku, [Turkmenistan capital] Ashgabat and Astana."

Russia is gaining the upper hand in the region. Despite robust US diplomacy in Ashgabat - over 15 American delegations arrived there in the past year - Turkmenistan, which already exports around 50 billion cubic meters of its gas through Russia, has responded well to Moscow's overtures. It has decided to stick to the terms of an April 2003 deal whereby virtually all its exports are handled by Russia "up through 2025", and Turkmen gas exports to Russia are expected to rise to 60-70 billion cubic-meters by 2009, leaving hardly any surplus for Western companies. Ashgabat has also committed to the construction of a pipeline to Russia via Kazakhstan along the eastern coast of the Caspian Sea.

The clincher was Russia's offer to buy Turkmen gas at "European prices" - the same approach that Moscow adopted for securing control of Kazakh and Uzbek gas exports. Russia has since made a similar offer to Azerbaijan, which Baku is considering. Azerbaijan was the true success story of US oil diplomacy in the post-Soviet era. Clinton literally snatched it from Russia's orbit in the 1990s by pushing through the Baku-Tbilisi-Ceyhan [BTC] oil pipeline against seemingly impossible odds. Azerbaijan is now edging back toward Moscow.

It is negotiating with Russia an increase in the annual capacity of the Baku-Novorossiisk pipeline. Azerbaijan reducing its commitment to the US-supported Baku-Supsa and BTC pipelines, which have a massive capacity of 60 million tonnes annually and could easily handle Azeri oil exports, is a breakthrough for Russia.

Russia's resolute stance in the Caucasus has caught Baku's attention. Baku understands Russia's resurgence in the southern Caucasus, and President of Azerbaijan Ilham Aliyev dislikes the mercurial personality of Georgian President Mikheil Saakashvili. Azerbaijan might have lost $500 million in revenues due to the suspension of oil transportation via the Baku-Supsa and Baku-Tbilisi-Ceyhan pipelines in August due to the conflict, and Baku's new interest in the Russian pipeline stems from a desire to protect its relationship with Moscow.

The implications are quite serious for Washington. Any reduction in the Azeri exports via BTC could impact the viability of the pipeline, which has been a cornerstone of US oil diplomacy in the Caspian, pumping early 1 million barrels of oil per day from Azerbaijan to Turkey's Mediterranean coast, where most of the supply is then shipped to Europe. The BTC pipeline looks secure for now, but has come under the increased watch of Russia.

Again, question marks have appeared regarding the future of the Nabucco gas pipeline, which, if constructed, would bypass Russian territory and bring Caspian gas from Azerbaijan via Georgia and Turkey to the European market. What if Azerbaijan accepts the Russian offer to buy gas at "European prices"? Has the Caucasus conflict fatally hurt Nabucco's prospects?

Russia comes out on top
There is indeed a new ambivalence in the geopolitics of the region. All across Western Europe, Eurasia and China countries are assimilating what happened in the Caucasus in August and are assessing their stakes vis-a-vis a resurgent Russia. They seek accommodation with Russia. Moscow has come out very much on top.

The war in Georgia has somewhat clouded the relations between Russia and the European Union. The final declaration of the EU summit on September 1 underscored the need to reduce energy dependence on Russia. But the EU's options, too, are limited. Europe has pinned its hopes on Nabucco, but it can only be implemented with Russian participation. Claude Mandil, former head of the International Energy Agency, said recently in an interview with the Russian daily Kommersant, "There is much oil and gas in Central Asia, but still less than in Russia or Iran."

Mandil, who advises French President Nicolas Sarkozy on energy issues, was critical of the US pressure on Europe to isolate Russia, calling it "counter-productive". He said, "The EU alone should decide the issue of energy security. The US itself is highly dependent on oil imports from Venezuela, but no EU members tell Washington that it's time to attend to that problem".

China also recognizes the Russian consolidation in the Caspian-Central Asian region. A commentary in the People's Daily in early September took note that Russia's Central Asia diplomacy has been "crowned with great success". It noted that visits by Russian leaders to Central Asian capitals in August helped "consolidate and strengthen" Moscow's ties with the region and achieved "substantial outcomes" in energy cooperation.

The Chinese commentary concluded: "Against a global backdrop of Russia's growing contradictions with the West � the high-level shuttle diplomacy of Russian leaders will further enhance Russia's strategic position in Central Asia, beef up the control of oil and gas resources and help coordinate the positions of Russia and these Central Asia nations on the Transcaucasia issue". Beijing has obviously made a realistic assessment of its own options in Central Asia.

Tashkent on September 1-2, Uzbekistan and Russia agreed to build a new pipeline with a capacity of 26 to 30 billion cubic meters (bcm) annually to pump Uzbek and Turkmen gas to Europe. Such a pipeline will undermine the US efforts to develop a trans-Caspian energy route bypassing Russia. Again, Russia's LUKoil has announced plans to produce 12 bcm gas in Uzbekistan's Kandym and Gissar fields annually.

All in all, therefore, Rice's visit to Kazakhstan took place against a grim backdrop. Neither Azerbaijan nor Kazakhstan appears interested in US entreaties to re-route energy exports to bypass Russia. Both hope to maintain good relations with the US but that cannot be done by picking a quarrel with Russia. At a press conference with Rice in Astana on Sunday, Kazakh Foreign

Minister Marat Tazhin stressed relations with Russia will remain a top priority. "Our relationship with Russia, I can formulate, is just excellent. We have very good political relations. Russia is our strategic partner� At the same time, I should underline that our relationship with the United States has a stable, strategic character."

Neither Tazhin nor Kazakh President Nurusultan Nazarbayev apparently made any commitments to Rice regarding US-sponsored pipelines. On the contrary, addressing the media jointly with Russian President Dmitry Medvedev following the Russian-Kazakh border region forum in Aktyubinsk, Kazakhstan, on September 22, Nazarbayev said Kazakhstan will be increasing its oil production by 12 million metric tons in 2009 and it proposes to pump the additional oil via Russia. "It is very important that Kazakh oil should pass through Russia", he said.

Kashagan puzzle
Nazarbayev hinted Astana would use the Russian-controlled Caspian Pipeline Consortium (CPC) to carry Kazakh crude from the Kashagan deposit in 2012-2013 to the Russian terminal on the Black Sea. Nurlan Balagimbayev, adviser to Nazarbayev, said on Thursday that Kazakhstan is interested in buying an additional 13.7% of stakes belonging to both BP and Oman in the CPC, in which Russia holds 24% besides Chevron, Shell and ExxonMobil.
Rice would have utilized her visit in Astana to check out Kashagan. Kazakhstan and a group of Western oil companies led by Italy's Eni are due to finalize details on Kashagan's future by October 25. A new operating company is expected to be formed and individual companies - Eni, Shell, ConocoPhillips, Japan's Inpex Holdings and Kazkhstan's KazMunaiGas - are likely to control different aspects of the operation such as production or shipping.

Kashagan is estimated to hold 7 billlion to 9 billion barrels of recoverable reserves and is undoubtedly the jewel in the crown of the Caspian Sea Basin. Several different routes are likely to be needed for delivering oil from Kashagan to customers, involving the construction of major new oil pipelines. Rice would have easily anticipated the keen rivalries that lie ahead in advance of the 2013 production start date of Kashagan. The battle for Kashagan is about to be joined.

The transportation route for the Kashagan will have a vital bearing on the long-term economic viability of the BTC pipeline. But Astana has shown no hurry so far in committing Kashagan oil to the BTC. Kazakhstan may well be playing for time and synchronizing with Russia's expected completion of the pipeline from East Siberia to the Pacific (ESPO) by 2012 for routing oil to the Asian markets.

Russian Energy Minister Sergei Shmatko said on Wednesday that Kazakhstan's state-owned oil pipeline operator KazTransOil is interested in transporting Kazakh oil through the ESPO. "Our Kazakh partners are looking at the project with great interest and enthusiasm. We are happy about that", he said at a function launching a section of the ESPO between Talakan and Taishet. The Taishet-Talakan section of the ESPO line was completed in September, while the remaining stretch to Skovorodino, near the Chinese border, is scheduled to be completed by end-2009.

Will Astana decide to ship its projected oil output - 150 million tons a year by 2015 - through ESPO? If that happens, China will be a huge beneficiary and the geopolitics of the Caspian will undergo a historic transformation.

Russian-Kazakh "oil alliance"
Rice put on an appearance, saying, "This is not some kind of contest for the affection of Kazakhstan between the countries of the region". But it is very obvious that Washington is nervous Kazakhstan is showing alarming signs of shifting towards Moscow. Astana supported the Russian action in the Caucasus and cut down its investment in Georgia. If Rice was hopeful of encouraging Kazakhstan to stand up to Russian "bullying", she was disappointed.

On the eve of Rice's arrival in Astana, Nazarbayev said, "I personally was a witness to the fact that Georgia attacked first. I was in Beijing on August 8 with Mr Putin, when we first heard the news. I think the coverage of those events was biased. Whoever you may blame for the conflict, the facts are bad enough."

Since assuming office in the Kremlin on May 7, Medvedev has visited Kazakhstan three times. During his last visit, he promised, "We [Russia and Kazakhstan] will keep building up the production and the export of hydrocarbon raw materials, build new pipelines when it is beneficial and necessary, and attract large-scale investment into the fuel and energy sector."

On Wednesday, while on a visit to Almaty, Kazakhstan's largest city, the influential head of the CIS (Commonwealth of Independent States) committee of the Russian parliament, Vadim Gustov, floated a new idea that the two countries needed to develop a common energy market. He said an "oil alliance" would be mutually advantageous.

"A common energy market of Russia and Kazakhstan would help develop energy cooperation, supply cheap energy resources to the domestic markets and increase energy supplies to third countries", Gustov said. According to him, Russia and Kazakhstan should develop and adopt a joint concept of the energy market, which could serve as basis for Euroasian Economic Community space.

Evidently, Washington is barely keeping pace with the Russian diplomacy. To make matters worse, the financial crisis at home has eroded US credibility. An entire ideology of economic development that US diplomats propagated in the region stands discredited.

There is huge political symbolism when Iceland expresses "disappointment" with the Western world and turns to Moscow for a 4 billion euro (US$5.5 billion) loan to salvage its economy from imminent bankruptcy. Such images make a lasting impression on the Central Asian steppes.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for more than 29 years, with postings including ambassador to Uzbekistan (1995-98) and to Turkey (1998-2001).

(Copyright 2008 Asia Times Online (Holdings) Ltd. All rights reserved.

Source











Chinese toy