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Caucasus: All Oil Routes Lead To Power

Prague, 12 February 1998 (RFE/RL) -- The Caspian oil game is being played for very high stakes. Despite continuing disputes over how to carve up the resources, the race is on to extract and bring to market thousands of millions of dollars worth of oil and gas from the Caspian Sea basin.

Major oil corporations, powerful individuals from east and west, and the governments of the Central Asian and Caucasian states around the Caspian Sea are all involved in the quickening spiral of events. The latest question is, whether the lure of oil wealth nearly brought the death of Georgian President Eduard Shevardnadze.

Shavardnadze's motorcade was attacked in Tbilisi this week (Feb. 9) in a carefully planned military-style operation. The President was lucky to escape alive from the wreckage of his armored limousine. First thoughts were that purely domestic political forces were behind the assassination attempt, the second he has survived since 1995.

But Shevardnadze himself played down that likelihood within hours. He told journalists that very powerful interests, as he put it, could be trying to ruin Georgia's chances of becoming a key transit route for oil to the west. He hinted at the involvement of Russians in the plot.

He noted that plans to transport oil through Georgia would mean avoiding Russian territory, and he said that the assassination attempt could not have been the work of amateurs. Were Russians really behind the attempt? Or is big-brother Russia just a convenient scapegoat. The truth may never be known. But certainly the link to oil interests, whether Russian or non-Russian, is a credible possibility given what's at stake.

Georgia is active in promoting itself as a main corridor for Caspian oil flows. A pipeline already exists over most of the route from Azerbaijan to the Georgian Black Sea port of Supsa, and under a $1.5 ,billion contract signed with an Australian consortium, this line is to be refurbished and completed by the end of the year. In addition, there is the prospect of Georgia hosting a much bigger share of transited oil, through a new pipeline from Azerbaijan through Georgia to the Turkish Mediterranean port of Ceyhan. With additions, Kazakh and Turkmen oil could also use this route, thereby securing enormous transit fees for Georgia.

Russia, for its part, is already transporting Azerbaijani oil through a northern route through Chechnya to the Black Sea port of Novorossisk. Russia is also planning a major expansion of its carrying capacity by means of a new pipeline further north, to link Novorossisk with the Kazakh and Azerbaijani fields. The Russians are pressing very hard for this to be the major transit route, and the Georgian plans cut squarely across their intentions.

Has the Shevardnadze assassination attempt, even though it failed, created uncertainties which will reduce Georgia's chances of being a major transit center? And will it reduce investor confidence generally? Caucasian affairs analyst Edmund Herzig says he does not believe so.

Herzig, a senior researcher with the Royal Institute of International Affairs, told RFE/RL from London that it's hard to predict what would happen to political stability in the event of Shevardnadze's sudden departure. But he survived, and investors should not read into the attempt on his life any change in the balance of forces. Herzig said that since the Caucasian countries gained independence, their leaders had used any political violence as a reason for strengthening state control and eliminating opponents. In this case, Shevardnadze will probably use the occasion to further rally public support around him.

Herzig says that the pipeline projects are only part of Georgia's desire to be a pivot between the west and the orient, between the Black Sea and Europe on the one hand, and the Caspian Sea and Central Asia on the other. He said the Georgians are looking to the broader possibilities of communications, whether by road, rail or seaports, which would create opportunities for participation by Georgian companies.