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Russia: Prime Minister Revives Plan For Oil Pipeline Around Chechnya

Boston, 21 September 1999 (RFE/RL) -- Russian Prime Minister Vladimir Putin has revived plans for an oil pipeline that would bypass Chechnya, charging that Islamic rebels are seeking control of Caucasus oil.

In a television interview Sunday, Putin said the Islamic forces in Chechnya and Dagestan were trying to "take charge of the mineral resources of that part of the world and that part of Russia."

On Friday, Semyon Vainshtok, who was installed by the Putin government last week as chairman of the state pipeline company Transneft, said he is under orders to build the bypass pipeline around Chechnya through Dagestan.

Putin's remarks seemed to be aimed at rallying both domestic and international support for Russia's struggle against the separatists. By attributing economic motives to the insurgents, the Russian government may hope to counter their claims that they are seeking religious and political independence.

The charge of a threat to all Caucasus oil may also be an appeal to Azerbaijan, whose oil shipments to the Russian port of Novorossiysk have been cut off due to the fighting in Dagestan. On a wider stage, Putin's remarks may be designed to win support from Washington, which has supported Caspian oil transit through Azerbaijan and Georgia, in case a large-scale Russian crackdown becomes a source of Western criticism.

By implication, Putin may also be suggesting that unnamed Muslim countries that are allegedly supporting the rebels may manipulate world prices by gaining control of the region's oil.

Whatever Russia's motives, the plan to build a bypass pipeline seem unlikely to meet with success. Previous efforts have proved fruitless, and analysts have repeatedly cited the futility of such a project.

Almost exactly two years ago, former Deputy Prime Minister Boris Nemtsov announced an identical plan, due to transit disruptions in Chechnya. Before that, the Russian government spent a year negotiating the issues of transit fees, pipeline reconstruction and security with the breakaway territory.

Under Nemtsov's plan, Transneft was ordered to build a 283-kilometer line from Khasavyurt in Dagestan to Terskaya in Stavropol Krai. The project was to cost $220 million and be completed by May 1998.

Although work reportedly started, it never got far. Russia had few funds available, particularly for projects with such a small chance of success. Analysts questioned the logic of trying to avoid disruptions in Chechnya by simple shifting the pipeline route over the border into Dagestan. The recent cross-border warfare seems only to have proved the point. If anything, a new pipeline would only become a target for terrorism, creating far more insecurity than security for oil shipments.

Russia's problems this year with transit to Novorossiysk predate the series of recent raids by the Islamic commanders, Shamil Basaev and Khattab. The pipeline through Chechnya was subject to almost daily shutdowns, despite efforts by the government of President Aslan Maskhadov to stop illegal tapping and sabotage.

Since the start of the Basaev offensive, Russia has also suspended rail shipments of Azerbaijani oil through Dagestan. But so far, there seems to be little evidence that the rebels have targeted oil transit in the Caucasus, or that they have sought to capture other export routes. The oil pipeline of the Azerbaijan International Operating Company from Baku to Supsa on the Black Sea has been operating normally. There have also been no reports of rebel interference with the rail route through Georgia.

Whether or not it becomes a reality, Russia may need the bypass plan to retain its own economic influence in the Caucasus, whether the Islamic rebels have economic ambitions or not. Without a route to Novorossiysk, Russia has ceased to be a contender in the competition with Turkey and Iran for a main export pipeline from the Caspian.

But Russia's strategy of raising the stakes also runs the risk of creating a larger failure in the Caucasus. A military defeat could be seen as a loss of Russian economic influence in the entire region, under Putin's formulation.

Moscow has other economic reasons for alarm over the rebel offensive, aside from the far greater concerns about civilian bombings in Russia and the spread of ethnic separatism. Dagestan accounts for more than half of Russia's Caspian shoreline. Independence would greatly diminish Russia's legal claims to the waterway. While that possibility still seems a long way off, Russian fears may be magnifying the potential strategic cost.

Putin's remarks suggest that Moscow is focusing on how much the rebels have to gain because of fears that it has so much to lose.