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Azerbaijan/Russia: Oil Deal Stirs Chechen Diplomatic Activity In Georgia

Prague, 29 August 1997 (RFE/RL) - As the date approaches for the start of extraction of oil from the rich Azerbaijani offshore fields of the Caspian, negotiations and other diplomatic activities intensify among all parties interested in the vastly lucrative and politically important deal.

Chechnya's President Aslan Maskhadov travels to Georgia tomorrow, as Russian negotiators in Grozny express hope that talks with Chechen officials this week are finally on the right track to settle a dispute over the key export pipeline to deliver Caspian Sea oil across Chechnya.

Georgia's President Eduard Shevardnadze has said he and Maskhadov will discuss ways of broadening Georgia-Chechnya relations. Georgia's Security Council Secretary Nugzar Sadzhaya was in Grozny this week to prepare the talks. Maskhadov is expected to hold two days of talks in Tbilisi, but no details of the agenda have been released.

However, Interfax news agency quotes Chechnya's Vice President Vakha Arsanov, who was in Azerbaijan this week, as saying in Baku that Chechnya has nearly completed a feasibility study of a pipeline that could transport Azerbaijani oil from Baku to Tbilisi through Grozny, and farther to the Black Sea terminals.

Arsanov said that Chechnya and Georgia government experts are actively discussing prospects for implementing this project, but he did not elaborate further. He said that, in his opinion, the 150 kilometers section of a pipeline connecting Azerbaijan's Caspial oil fields to the Black Sea port of Novorossiisk via Chechnya will not be operational by October 1, when an international consortium plans to start pumping so-called "early oil," or limited-production oil capacity. Arsanov said that Russia "has not allocated a single kopeck to the restoration of the Chechnya stretch of the pipeline."

Russia's Security Council Secretary Ivan Rybkin has dismissed Arsanov's words. He told Interfax that "no more than three weeks" is needed to finish the restoration of the pipeline. Rybkin added that equipment has already been delivered to Chechnya, and Russian officials hope that this week's talks remove the last barriers hampering the conclusion of economic agreements.

Azerbaijan's President Heydar Aliyev said, during a visit in Poland this week, that the pipeline "must work by October 1." Aliyev said that Baku, alarmed by Arsanov's statements, would send an inquiry to the Russian government, and thoroughly study the situation.

At the beginning of July; Russian, Chechen and Azerbaijani companies signed an agreement under which the Baku-Grozny-Novorossiisk pipeline would be fully repaired within 30-40 days. Aliyev said Azerbaijan had fully repaire its stretch of the pipeline. He said an international oil consortium spent about 50-million dollars for the restoration works. Other top Azerbaijani officials expressed hope that Russia would give a "clear answer soon," seemingly sending a message to Chechnya's leadership that Azerbaijan will think twice before risking ties with Moscow. Azerbaijan's Prime Minister Artur Rasizade said Russia is interested in an agreement among all parties involved in the transit of Azerbaijan oil, and does not want to appeal to international courts to settle the problem.

Natik Aliyev, the president of Azerbaijan's State Oil Company said that the Chechen pipeline "is linked to a range of other issues." He added that after meeting Chechen officials in Baku, he had "realized that Chechnya is using the pipeline as a trump card in tackling its problems with Russia."Natik Aliyev said Azerbaijan "shall be glad to come to terms with Russia."

But if this is not the case, he said, Azerbaijan "shall find other ways of supplying Azerbaijan oil to world markets." He said a possible option, "until the end of next year or the beginning of 1999," could be refining oil at Baku oil refineries, and then transport it in tanks to the Black Sea, and farther on tankers. The so-called Western route through Georgia that the international consortium has chosen as an alternative route for the export of Caspian oil is expected to be operational by the end of 1998.

Immediately following those developments, Russia seemingly resumed its activity. Interfax quoted First Deputy Prime Minister Boris Nemtsov as saying yesterday evening that after two days of intense talks in Grozny, Deputy Fuel and Energy Minister Sergei Kirienko reported to him that "some of the problems, which until last night seemed insolvable" have been solved.

Kirienko leads the Russian delegation at the Grozny talks. The Chairman of Chechnya's oil company Yunko, Khodzhakhmed Yarikhanov, leads the Chechen delegation. Nemtsov described the negotiations as "fairly hard," but added that after yesterday's progress he hopes negotiators initial a final agreement.

Nemtsov dismissed Chechen representative's statements that Moscow is trying to oblige Chechnya's leadership to give up its independence bid in exchange for assistance in restoring the pipeline and Chechnya's oil industry. Nemtsov, who is also Russia's Fuel and Energy Minister, said he has "no intention" of using oil issues for political ends. He added that Moscow has suggested all the restoration work of Chechnya's pipeline be funded by Moscow.