These figures are based in part on estimates provided by the U.S. Energy International Administration, which breaks down the reserves on the following country-by-country basis:
Azerbaijan -- 4-13 billion barrels (bbl)
Iran -- 0.1
Kazakhstan -- 10-18 bbl
Russia -- 2.7 bbl
Turkmenistan -- 0.6 bbl
Uzbekistan -- 0.6 bbl
Some industry estimates, however, are lower. The CRS report also cites figures from British Petroleum/Amoco indicating smaller proven reserves in Azerbaijan (7 bbl) and Kazakhstan (8 bbl) and projecting a regional total of about 16 bbl. (BP/Amoco's figures do not include estimates for Russia and Iran.)
Kazakh President Nazarbaev agreed to provide some oil for BTC, but he specified neither how much nor when. Astana is also seeking to supply China and will largely maintain its current deliveries to Novorossiisk.
These figures are roughly comparable to U.S. oil reserves of 22 billion barrels. But while the Caspian is an important source of oil for Europe, it may not be a long-term strategy for energy independence from Russia or OPEC -- the original goal behind the Baku-Tbilisi-Ceyhan (BTC) pipeline.
The 1,770-kilometer (1,010 mile) BTC pipeline -- built at a cost of $3.6 billion and capable of pumping 1 million barrels a day -- went into operation on 25 May. Regional leaders put on a brave face, hoping to convince the rest of the world that from here on out, Europe would no longer be dependent on Russia and its export routes. BTC, it was hoped, could save the continent from the potential threat of a Moscow energy monopoly.
Vafa Guluzade, a former foreign affairs adviser to the Azerbaijani government, told "The Wall Street Journal" on 25 May that BTC will neutralize any Russian attempts to use economic levers to bring former Soviet republics back under its wing.
THE CPCRussia's stance on Caspian export routes became clear in 1995, with the forming of the Caspian Pipeline Consortium (CPC) -- of which the U.S. Chevron Texaco corporation was one of the largest shareholders. Russia itself owned a 24-percent stake in the CPC and lobbied actively for the construction of a pipeline from Kazakhstan's Tengiz oil field to Russia's Black Sea terminal at the port of Novorossiisk.
A majority of the route crosses through Russian territory, but Chevron Texaco did not appear to share concerns in Washington that Moscow would move to control the flow of oil across Russia.
Chevron Texaco established itself as a player in the Kazakh oil industry in April 1993, when it signed an agreement to set up the company TengizChevrOil on an equal partnership basis with the Kazakh government.
Since the completion of the CPC in 2001, Kazakhstan has steadily increased the volume of crude it ships via this route. According to a 13 January 2005 article in "The Moscow Times," some 350,000 barrels of Kazakh oil passed through the CPC daily in 2004.
At present, almost all of Kazakhstan's oil exports cross Russia and are then shipped by tanker through the Bosporus. But it is uncertain how long this will continue. Turkey, citing ecological risks, is set to limit tanker traffic through the straits. It is reasonable to assume that as Kazakh oil production increases, some of its exports may be routed through the newly opened BTC line, in order to avoid political problems with Ankara.
THE BTC OPENSAt the BTC's 25 May opening ceremonies, Russian President Vladimir Putin's special envoy for energy cooperation, Igor Yusufov, failed to make a scheduled appearance. The Interfax news agency reported that Yusufov had fallen ill and had sent his regrets. No other high-ranking Russian official was apparently available to act in his stead.
Russia's "Kommersant Daily" on 25 May suggested that the BTC, rather than being a purely economic venture, was more of a "political" project meant to isolate Iran and Russia. The paper went on to speculate the United States would also use the BTC for added advantage, by bringing in troops for pipeline security and thus bolstering its presence and influence in the region.
Pipeline security was also in the thoughts of Mikhail Margelov, the chairman of the Russian Federation Council's International Affairs Committee. Interfax on 25 May cited Margelov as saying, "First and foremost, it is a question of [Russia's] national security and the expediency of a foreign military presence in the region, which would look especially strange against the background of the pullout of Russian bases from Georgia," he said.
"Russia has had enormous experience with maintaining a [military] presence in the region. We all are partners in the antiterrorist coalition, and it makes attempts to use the new pipeline as a pretext for enhancing a foreign military presence in the region doubly outrageous," he said.
The British press, by contrast, suggests the BTC is not about bolstering Washington's regional profile. The "Independent" daily wrote on 25 May the BTC was built in order to "ease the reliance of the West on OPEC and bring cheaper fuel to our filling stations."
The "Times" daily added that the BTC "is crucial in lessening Western dependence on oil from the Middle East." Left unexplained was how the Caspian, with its 34-billion-barrel potential, could prove a formidable rival to OPEC, with its proven reserves of over 800 billion barrels.
Britain's anti-OPEC tendencies can perhaps be explained by the fact that British Petroleum (BP) is the main partner in the international consortium that built the BTC. BP is optimistic the pipeline will meet all expectations. Tony Hayward, BP's head of exploration and production told "The Wall Street Journal" on 25 May the pipeline "is opening up a new hydrocarbon province."
BP, however, is also a partner of the Russian oil company TNK, and as such is working to supply Europe with Russian oil as well. It seems fair to say that BP is playing both sides of the coin: ensuring that Russia has a large market for its oil in England and elsewhere in Europe -- and thus increasing the risk of monopoly -- while at the same time leading the forces opposed to a Russian energy blackmail scheme.
It was BP-TNK which, with the support of the Putin government, insisted in 2004 that the Odesa-Brody pipeline built in Ukraine to transport Caspian oil to Europe be used in the reverse direction, to transport BP-TNK oil to a terminal outside Odesa for tanker transport through the Bosporus -- thereby going against Western desires to limit tanker traffic through the straits.
Writing in "The Wall Street Journal" European edition on 10 October 2003, Robert McFarlane, who served as national security adviser to U.S. President Ronald Reagan, noted: "When Ukrainian Prime Minister Viktor Yanukovych was in Washington this week, certainly one issue for discussion was last week's decision by Ukraine's state pipeline company to move forward toward reversing the use of the Odesa-Brody oil pipeline in Russia's favor.... Russian oligarchic interests, however -- with Britain's BP unfortunately in tow -- wish to use that pipeline themselves, in the opposite direction.... This would cancel all the hopes that had been vested in the Ukrainian pipeline."
The new Ukrainian government is attempting to once again reverse the flow of the Odesa-Brody pipeline to its original south-north direction, but is finding few suppliers from the Caspian to fill the pipeline.
The fate of the BTC pipeline will be determined to some degree by Kazakhstan's willingness, or need, to allocate more oil for delivery into the pipeline. And while Kazakh President Nursultan Nazarbaev publicly agreed to provide some oil for BTC, he specified neither how much nor when. Astana is also seeking to supply China and will largely maintain its current deliveries to Novorossiisk. Whether it will need to send a significant quantity of additional oil through the BTC is uncertain. But the success of the Baku-Tbilisi-Ceyhan pipeline depends in large part on that question.