MOSCOW'S FIGHT FOR OIL CASH FUELS CHECHEN CONFLICT By Philip Sherwell in Tbilisi
AS Russian troops fought their way through the streets of Grozny last week, strategists in the Kremlin had their eyes on a different - and highly lucrative - target several hundred miles to the east: the vast oil deposits beneath the Caspian Sea.
Moscow is waging more than a military campaign in Chechnya. It is also fighting for access to the Caspian Sea oil reserves pumped to the West through the former Soviet state of Georgia by a British-headed consortium, the Azerbaijan International Oil Company. The region's pipeline politics are a striking parallel to the latest James Bond film, The World is Not Enough, in which tycoons, terrorists and spies vie for control of the Caspian's oil in the former Soviet Union.
There are two pipelines running from Baku, the bustling Azerbaijani capital known to Western expatriates as "Oil Dorado". The original route - north-west through Dagestan and Chechnya to the Russian Black Sea port of Novorossiysk - was closed this year, a few months before the current conflict began. But, to the fury of Moscow, the Baku-based AIOC consortium, headed by BP Amoco, built a second pipeline to skirt Russian territory, removing Moscow's political control over the oil flow to the West and the millions of pounds it earned from tariffs.
Plans to build another AIOC pipeline from Baku through Georgia and south to the Turkish Mediterranean port of Ceyhan have heightened the belief in Russia that the West is attempting to impose its political and economic writ over the southern flanks of Moscow's dwindling empire in the Caucasus and central Asia. In the region's power politics, Turkey is firmly in the West's camp.
Russia is now fighting back and the Transneft oil transport company last week announced that the first stage of a Baku-Novorossiysk pipeline by-passing Chechnya has been completed. However, the costs of the new route will be prohibitive if the company cannot woo foreign investors.
And that means that winning the war in Chechnya is crucial for Moscow's oil politics. Victory would give back control of the troubled northern pipeline through Grozny. Just as significantly, it would also allow the Kremlin to resort to its old trouble-making tactics in Georgia: a tactic that could harm the country's pivotal role as a transit route to the West for Caspian oil.
With its ethnic pot-pourri and separatist movements, Georgia is the most unstable of the Caucasian states that gained independence eight years ago. Moscow is already believed to have backed assassination attempts on President Eduard Shevardnadze and sponsored separatist groups in flashpoint areas.
The confrontation between Russia and Georgia is deepening. Moscow has accused Tbilisi of backing "terrorists" for refusing to agree to joint Russian-Georgian border patrols along the Chechen frontier and for accepting Chechen refugees. Georgia countered that Moscow's helicopters and jets had routinely breached its air space and that Russian rockets had slammed into Georgian territory.
A Western oil analyst said: "Part of the Russian strategy is to reassert their influence in the Caucasus. They have been sidelined there for the past five years and their involvement in Caspian exploration is minimal. Regaining control of the pipeline through Chechnya is undoubtedly a reason for the Russian offensive."
But the realities of international geo-politics leave no other pipeline options. Washington refuses to countenance a southern route through Iran, while few in the West would want to be dependent on oil delivered via Russia. BP, which merged with Amoco last year, has invested more than £300 million in Azerbaijan over the past decade.
The current Georgian pipeline carries about 100,000 barrels of Azeri crude oil a day, a figure that can be increased several-fold, even if the new route through Turkey - a project that could cost up to £2.5 billion - is not completed.
In the office of the AIOC's Tbilisi partner, a sticker proclaims: "Happiness is multiple pipelines." But the machinations and plotting of the new Bond film provide a more accurate backdrop to events in the Caucasus.