Central Asian countries are trying to build closer energy links with their neighbours even as the "new great game" goes on for a major share of the region's hydrocarbon reserves.
JOHN CHERIAN recently in TashkentTHE new "great game" involving the major powers in Central Asia is focussed on the efforts to get a major slice of the hydrocarbon reserves in the region. It has been established that the Central Asian states have huge reserves of oil and gas waiting to be tapped. The area around the Caspian Sea has been witnessing frenetic activity, with important geopolitical implications. In 2005, the United States-backed Baku-Tbilisi-Ceyhan (BTC) pipeline was opened. Subsidised by the U.S. government to the tune of $2 billion, the pipeline will take Caspian Sea oil from Azerbaijan to Turkey via Georgia. The Bush administration considers it a "strategic project". Traditionally, oil and gas from Central Asia were exported through Russia. It is yet to be seen whether the BTC pipeline will be commercially viable. According to experts, the oil resources of Azerbaijan in the Caspian region will be depleted by 2020. For the BTC pipeline to be profitable, it will have to depend on oil from Kazakhstan.
Another landmark event was the commissioning on December 15 of a new oil pipeline from Kazakhstan to China. The 1,000-km pipeline links Atasu in central Kazakhstan to Alashanku in western China. It is viewed as part of the ambitious project linking China with the oil and gas fields in Central Asia. China, like other Asian economic powers such as Japan and India, wants to be less dependent on energy imports from West Asia. India too is exploring avenues for more collaborative ventures with Central Asian countries in the exploration of oil and gas. Recent political events in Uzbekistan and elsewhere have made many governments in the region wary about the West's game plan.
In the first week of December, the Centre for Political Studies (CPS), a leading think-tank of Uzbekistan having close links with the government, organised an international conference on "Central Asian energy market: Trends and prospects" in Tashkent, the country's capital. The Director of the Institute is Gulnara Karimova, daughter of Uzbek President Islam Karimov. (The daughters and sons of Central Asian Presidents these days play important roles in the politics of their countries. In neighbouring Kazakhstan, President Nursultan Nazarbayev's eldest daughter was a prominent face on the campaign scene. During the elections held in early December She was seen frequently on television interacting with the media.)
Karimova pointed out that Central Asia had 3.3 per cent of the world's proven gas reserves and 5 per cent of oil. She said since the demand for energy was expected to rise steeply in the next 20 years, Central Asia's bountiful energy reserves should be put to good use for the development of the region. "Kazakhstan, Uzbekistan, Russia and China are already linked by the energy grid. The Central Asian gas and oil pipelines should follow the ancient Silk Route," she said. The Silk Route connected India with Central Asia until the Middle Ages and benefited the entire region. For India to be connected to the Central Asian oil and gas grid, it will have to join either the Iran-Pakistan-India gas pipeline project or the Trans-Afghan Pipeline (TAP) project which proposes to get gas from Turkmenistan to India via Afghanistan and Pakistan.
Senior officials and members of thinktanks from China, India, Iran and the Central Asian countries, barring Turkmenistan, were present at the Tashkent conference. The conference was organised in collaboration with the Shanghai Cooperation Organisation (SCO) and the Russian Oil and Gas Company, Gazprom. The focus of the deliberations was on fostering closer energy links between the region and neighbouring countries such as Russia, China, India, Iran and Pakistan. According to Karimova, the aim of the conference was to create a "unified energy club". The big players in the Central Asian hydrocarbon sector are the U.S., Russia and China. All the big deals concluded recently involved companies from this region.
In her speech, Karimova was critical of the West's insistence on transplanting its model of democracy in Central Asia. The Chinese delegates criticised the interference of Western powers in the internal affairs of their country. The countries in the region have reacted with alarm at the "regime changes" affected by the West in Georgia and Ukraine. The last thing they want is another "colour" revolution. "We have to respect the rights of Central Asian countries to develop their own style of democracy. Peace, development and cooperation should be the motto," said a representative of a Chinese thinktank. China, he said, wanted to be a peaceful player in the region and would never try to push other energy-hungry countries out of the region. According to the Chinese participants, the China-Central Asian relationship will provide a stable base for economic development in the entire region.
Until recently, Uzbekistan was a close ally of the U.S. It was among the first countries to offer a military base to the U.S. in its "war against terror". However, after the events in Andijon, a restive town in the Fergana Valley bordering the Kyrgyz Republic, relations between Tashkent and Washington soured. The Uzbek government did not take kindly to criticism from the West of its handling of the violent unrest. The Uzbek security forces used force to retake the town, which had briefly come under the control of its rebellious citizenry.
The Uzbek authorities have since removed the Americans unceremoniously from their military base in Khanabad. Uzbekistan and Russia have once again officially become strategic allies. A new treaty of friendship was signed after Karimov's visit to Russia in November. The treaty has given Russia the right to establish military bases on Uzbek territory. There is speculation that the Russian military may move into the Khanabad base, vacated recently by the Americans. "The strengthening of Russia's positions in Central Asia will guarantee peace and stability and meet the fundamental interests of our people," Karimov said after his return from Moscow.
China too has sprung to the defence of the Uzbek government. Beijing had granted Tashkent a $1.5-billion aid package in 2004, the single largest aid package it has disbursed to any country. Soon after the events in Andijon, Karimov went on a state visit to China. From the speeches of senior Uzbek officials at the conference, it was evident that U.S. companies were no longer in contention for contracts relating to the Uzbekistan energy sector.
Japan is playing a more careful game. It does not want China to walk away with most of the lucrative oil and gas contracts. In August 2004, Japan chipped in with a $150-million aid package to Uzbekistan in addition to the $1.8 billion of aid it has given over the years. Uzbekistan still has huge untapped reserves of oil, gas and precious minerals. It is the world's eighth largest natural gas producer. Uzbekistan also has huge uranium deposits.
Iran is another country that does not want to be a passive observer of the "new great game", which is going on in its backyard. American sanctions have had a negative impact on the country's hydrocarbon industry. According to Kambiz Sadaghiani, Director in the Iranian Oil Ministry, his country is discovering more and more gas fields. He said a 150-squaremetre area in the South Pars oilfield has one of the biggest gas deposits in the world.
"Only a fraction of our gas reserves are tapped," he said. The senior official expressed the hope that 30 billion cubic metres of Iranian gas would be piped to India from 2015 if the proposed gas pipeline materialised.
Indian and Pakistani officials were engaged in discussions on the proposed pipeline in New Delhi in the third week of December. The Pakistani officials were firm that irrespective of what New Delhi proposed to do, Islamabad would go ahead with its plans to build a pipeline to import Iranian gas. The Indian side too seems serious, as the discussions with the Pakistani officials now centre mainly on technical matters, such as the size of the proposed pipeline. Both sides deny there is any pressure from the Bush administration. Prime Minister Manmohan Singh reiterated recently New Delhi's determination to go ahead with the Iran pipeline.
Some Iranian officials involved in the oil sector are of the opinion that it now would not be easy for New Delhi to expedite the deal with Teheran. They say that India should have inked the deal before the new President, Mahmoud Ahmadinejad, took over. There is now a new team in the Iranian Oil Ministry, which owes its allegiance to Ahmadinejad, who is known for his nationalist stance. After India's surprise vote against Iran at the October board meeting of the International Atomic Energy Agency, there is suspicion in some quarters in Teheran about India's long-term foreign policy goals. They feel New Delhi is using "pipeline politics" to leverage concessions from Washington.
According to Iranian officials, other countries are waiting in the queue. China lapped up a multi-billion-dollar liquefied natural gas deal after India gave up its option. They said China had already displaced India and Malaysia as Iran's biggest partner in the hydrocarbon sector. Besides, there is an influential section of experts that believes that Iran should keep its natural gas. Sadakiyanzade told the Tashkent conference that Iran would have to use a lot of its gas for injection into its old oilfields. This procedure is adopted to revive dying oilwells.
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