High-stake game for Caspian oil and gas

Aug.10, 2008

High-stake game for Caspian oil and gas

Russia shows every sign of determination to evict Georgian forces from the breakaway South Ossetia province of Georgia, and it is unlikely that the US would come to the aid of Georgian President Mikhail Saakashvili.
As of Saturday, it looked like the Russians had the upper hand in the military conflict triggered by the Georgian military's takeover of the South Ossetia capital of Tskhinvali.
The stakes are deeper than meets the eye, and from Moscow's perspective the conflict could be a turning point in Russia's push against any expansion of US influence in its neighbourhood.
At the root of the conflict is control over the pipelines carrying oil and gas out of the Caspian region. Pro-US Saakashvili has been working with Western oil companies on a plan to route oil from Azerbaijan and gas from Turkmenistan, which transit Georgia, through Turkey instead of hooking them up with Russian networks.
Obviously, Moscow would not allow Saakashvili to do that and its way of thwarting his plans is through backing separatists of South Ossetia and neighbouring Abkhazia
Thrown into the Caucasian conflict is Israel, which has a strong interest in having Caspian oil and gas pipelines reach Turkey's Ceyhan terminal rather than the Russian network. Israel is in negotiations with Turkey, Georgia, Turkmenistan and Azarbaijan to have Caspian oil pumped to Ceyhan, from where it could be sent to Israel’s oil storage facilities in the Mediterranean and Red Sea. From these facilities, supertankers can carry the gas and oil to the Far East through the Indian Ocean. US companies would have a major stake the project.
Obviously aware of the Russian rejection of the idea, Israel had offered Moscow a share in the project but the offer was turned down.
The next option for Israel is to strengthen Georgia to withstand any Russian pressure and this was manifested in "security" contracts with Saakashvili.
Under these contracts, some 1,000 Israeli military advisers are training the Georgian armed forces in commando, air, sea, armoured and artillery combat tactics. They also offer instruction on military intelligence and security for the central regime. In addition, Israel also sold weapons, intelligence and electronic warfare systems to the Georgians.
Israel has not heeded Russia's warnings against its alliance with Saakashvili saying it was only helping Georgia's defensive capabilities.
However, the mask was removed with the Georgian move into Tskhinvali. It has become clear that Israeli advisers played a key role in the Georgian army’s invasion of the South Ossetian capital on Friday. And now they are reportedly advising Saakashvili to withdraw his forces from Tskhinvali or face a military disaster against the far superior Russian forces.
A Georgian withdrawal from Tskhinvali might not be enough because Moscow, sensing its advantage, could demand that Saakashvili cut off his alliance with the Israeli plan for Caspian oil and gas in return for ending military hostilities.
One thing is clear: The Russian-backed separatist wars in South Ossetia and Abkhazia would continue to rage as long as Saakashvili refuses to abandon his US/Israel-backed plans.