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Experts Warn Russia Seeks Influence Over Vast Caspian Oil Reserves

Rising oil prices, a resurgent Russia and continued turbulence in the Middle East have intensified competition for control of the vast oil and gas reserves in the Caspian Sea. The competition, involving big business and power politics, pits Russia against the West. At stake, some experts say, is world domination of the energy market. VOA's Brian Padden recently traveled to Azerbaijan and Germany, and has prepared a series of reports on the politics of oil. This story looks at transnational pipelines, and how they have become battlegrounds for influence and power.

From an off-shore platform in the Caspian Sea, British Petroleum extracts oil from a reserve estimated to contain 5.4 billion barrels of oil. From there, it is piped directly to the Sangachal terminal, located just outside of Baku, the capital of the Central Asian country of Azerbaijan.

From there, it takes a circuitous route, avoiding Russia, to reach energy hungry countries in Europe and Asia. A pipeline, with a capacity of one million barrels a day, transports the oil north to Tbilisi, Georgia, and then southwest to the Mediterranean port city of Ceyhan, Turkey. From there, tankers carry the oil around the world.

The Caspian region now supplies only a portion of the oil the world consumes, but its vast untapped reserves are believed to rival those of Russia and Saudi Arabia.

Alex Alexiev, an analyst with the Center for Security Policy in Washington, says the future development of this energy-rich region could change the balance of power in the world.

"Whoever controls the tap of gas and oil really has tremendous economic power, and that does change the equation," said Alexiev.

The West considered development of the Baku/Tbilisi/Ceyhan pipeline a victory. But, most of the Caspian region's oil and gas still travels through Russian pipelines, built before the collapse of the Soviet Union, when the oil rich countries of central Asia were still ruled from Moscow. Turkmenistan recently signed an agreement to build a new pipeline to send its gas to Russia.

Alexiev warns that an autocratic Russia, if it ever gained a monopoly on the region's energy supplies, would be able to impose its political will upon the world.

"Russia does not want to operate on purely capitalistic principles, where commodities are sold, etceteras, strictly on the basis of profit. They want to use hydrocarbon resources for political purposes," he added.

Construction of a planned Central Asia Oil Pipeline through Afghanistan and Pakistan, designed to bypass Russia, has been stalled because of continuing instability in the region.

In 2006, Russia's government-run gas monopoly temporarily cut its gas flow to Ukraine and Belarus in a dispute over a sharp price increase, a move that was seen by many as politically motivated. That also sharply reduced deliveries to Europe, unnerving European leaders. For supporters of the Baku/Tbilisi/Ceyhan pipeline, these moves reinforced their views that a pipeline bypassing Russia was necessary.

The Caspian region's oil reserves are key, as Russia and the West vie for influence in the region.

Vugar Bayramov with the Center for Economic and Social Development in Baku, says Azerbaijan, which has vast oil reserves, has aligned itself firmly with the West, and supports the building of a second pipeline, called Nabucco.

"West has real traditions, which I mean, big tradition, experience to make richer, to give more benefit, to neighbor or friend countries, but Russia doesn't have such experience," said Bayramov.

A consortium of Western oil companies built the Baku/Tbilisi/Ceyhan pipeline at a time when Russia was economically weak.

Alexander Rahr with the German Council on Foreign Relations in Berlin, says high energy prices have made Russia richer and stronger, and anxious to re-establish its political standing in the world.

"Russia is trying to become an energy superpower again," said Rahr.

Rahr says Russia wants to monopolize the transport of oil and gas to Asian and European markets, in order to bolster its global ambitions. But, he says, the marketplace is too diverse to be controlled.

"Russia exactly needs the Western markets to sell its oil and gas. And, it knows that, if it tries to threaten the markets, if it tries to weaken the West by using energy and gas as a weapon to push others into a kind of corner, it will lose this market and the benefits," he added.

Rahr says developing direct European access to the Caspian Region oil and gas will help keep Russia's political ambitions in check.