PART II
War and Globalization
 

CHAPTER V
War and the Hidden Agenda
 

Conquest of Oil Reserves and Pipeline Routes

merica’s New War” consists in extending the global market system while opening up new “economic frontiers” for US corporate capital. More specifically, the US-led military invasion— in close liaison with Britain—responds to the interests of the Anglo-American oil giants, in alliance with America’s “Big Five” weapons producers: Lockheed Martin, Raytheon, Northrop Grumman, Boeing and General Dynamics.

The “Anglo-American axis” in defense and foreign policy is the driving force behind the military operations in Central Asia and Middle East. This rapprochement between London and Washington is consistent with the integration of British and American business interests in the areas of banking, oil and the defense industry. The merger of British Petroleum (BP) and the American Oil Company (AMOCO) into the world’s largest oil conglomerate has a direct bearing on the pattern of Anglo-American relations and the close relationship between the US President and the British Prime Minister. In the wake of the 1999 war in Yugoslavia, Britain’s giant weapons producer, British Aerospace Systems (BAES), was fully integrated into the US system of defense procurement.
 

The Planning of War

In fact, the planning of America’s New War has been in the “pipeline” for at least three years prior to the tragic events of September 11. At the outset of the 1999 war in Yugoslavia, the “enlargement” of the Western military alliance was proclaimed with the acceptance by NATO of Hungary, Poland and the Czech Republic into its fold. This enlargement was directed against Yugoslavia and Russia.

In April 1999, barely a month into the bombing of Yugoslavia, the Clinton administration announced the planned extension of NATO’s dominion into the heartland of the former Soviet Union.

Coinciding with the ceremony of NATO’s 50th anniversary, the heads of state from Georgia, the Ukraine, Uzbekistan, Azerbaijan and Moldava were in attendance in the plush decorum of the Andrew Mellon Auditorium in Washington.

They had been invited to NATO’s three day celebration to sign GUUAM (Georgia, Uzbekistan, Ukraine, Azerbaijan and Moldava). GUUAM is a regional military alliance which lies strategically at the hub of the Caspian oil and gas wealth, “with Moldava and the Ukraine offering [pipeline] export routes to the West”.2 Georgia, Azerbaijan and Uzbekistan immediately announced that they would be leaving the Commonwealth of Independent States (CIS)’ “security union”, which defines the framework of military cooperation between the former Soviet republics, as well their links to Moscow.

The formation of GUUAM (under NATO’s umbrella and financed by Western military aid) was intent upon further fracturing the CIS. The Cold War, although officially over, had not yet reached its climax. The members of this new pro-NATO political grouping were not only supportive of the 1999 bombing of Yugoslavia, they had also agreed to “low level military cooperation” with NATO, while insisting that “the group is not a military alliance directed against any third party, namely Moscow”.3

Dominated by Anglo-American oil interests, the formation of GUUAM ultimately purports to exclude Russia from the oil and gas deposits in the Caspian area, as well as isolating Moscow politically.

Militarization of the Eurasian Corridor

Just five days before the bombing of Yugoslavia (19 March 1999), the US Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Mediterranean to Central Asia. The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire along an extensive geographical corridor:

The ancient Silk Road, once the economic lifeline of Central Asia and the South Caucasus, traversed much of the territory now within the countries of Armenia, Azerbaijan, Georgia, Kazakhstan, Kirghizstan, Tajikistan, Turkmenistan, and Uzbekistan …. One hundred years ago, Central Asia was the arena for a great game played by Czarist Russia, Colonial Britain, Napoleon’s France, and the Persian and the Ottoman Empires. Allegiances meant little during this struggle for empire building, where no single empire could gain the upper hand.

 

One hundred years later, the collapse of the Soviet Union has unleashed a new great game, where the interests of the East India Trading Company have been replaced by those of Unocal and Total [oil companies], and many other organizations and firms. Today [we are seeing] the interests of a new contestant in this new great game, the United States. The five [former Soviet republics] which make up Central Asia, Kazakhstan, Kirghizstan, Tajikistan, Turkmenistan, and Uzbekistan … are anxious to establish relations with the United States. Kazakhstan and Turkmenistan possess large reserves of oil and natural gas, both on-shore and off-shore in the Caspian Sea, which they urgently seek to exploit. Uzbekistan [also] has oil and gas reserves.4

Under the SRS, US foreign policy consists in undermining and eventually destabilizing its competitors in the oil business including Russia, Iran and China:

Stated US policy goals regarding energy resources in this region include fostering the independence of the States and their ties to the West; breaking Russia’s monopoly over oil and gas transport routes; promoting Western energy security through diversified suppliers; encouraging the construction of east-west pipelines that do not transit [through] Iran; and denying Iran dangerous leverage over the Central Asian economies ….
 

Central Asia would seem to offer significant new investment opportunities for a broad range of American companies which, in turn, will serve as a valuable stimulus to the economic development of the region. Japan, Turkey, Iran, Western Europe, and China are all pursuing economic development opportunities and challenging Russian dominance in the region. It is essential that US policymakers understand the stakes involved in Central Asia as we seek to craft a policy that serves the interests of the United States and US busi-ness.5

While the SRS sets the stage for incorporating the former Soviet republics into America’s business empire, the GUUAM military alliance defines “cooperation” in the area of defense, including the stationing of US troops in the former Soviet republics. Under GUUAM auspices, the US has established a military base in Uzbekistan, which was used as a launch pad for its October 2001 invasion of Afghanistan after the September 11 attacks.

The Silk Road Strategy Act points to the establishment under Washington’s protection—i.e., explicitly directed against Moscow— of “strong political, economic, and security ties among countries of the South Caucasus and Central Asia” .

Also, under the guidance of the US Government, working closely with the IMF and the World Bank, these former Soviet Republics are to establish:
… open market economies and open democratic systems in the countries of the South Caucasus and Central Asia [which] will provide positive incentives for international private investment, increased trade, and other forms of commercial interactions.6

Backed by US military might, the SRS is to open up a vast geographical region to US corporations and financial institutions. The stated purpose is “to promote political and economic liberalization” including the adoption of “free market reforms” under IMF-World Bank-WTO supervision.

In a region extending from the Black Sea to the Chinese border, the objective of the SRS is to instate a US-controlled “free trade area” composed of eight former Soviet republics. This extensive corridor—which until recently was largely within Moscow’s economic and geopolitical orbit—will eventually transform the entire region into a patchwork of American protectorates.

The SRS not only constitutes a continuation of US foreign policy of the Cold War era, but it also designates Israel as America’s “partner” in the Silk Road corridor:

Many of the countries of the South Caucasus have secular Muslim governments that are seeking closer alliance with the United States and that have active and cordial diplomatic relations with Israel.7

Oil Politics

Afghanistan is, in many regards, strategic. It not only borders the “Silk Road Corridor” linking the Caucasus to China’s Western border, it is also at the hub of five nuclear powers: China, Russia, India, Pakistan and Kazakhstan. While the bombing of Afghanistan was still ongoing, an interim “government”—designated by the “international community”—was installed in Kabul on the Bosnia-Kosovo model. The underlying objective, of course, is to militarize Afghanistan with a permanent presence of “peacekeeping troops”. Afghanistan is at the strategic crossroads of the Eurasian oil pipeline and transport routes. It also constitutes a potential land-bridge for the southbound oil pipeline from the former Soviet republic of Turkmenistan to the Arabian Sea across Pakistan, which had initially been negotiated by Unocal with the Taliban government. (For further details see Chapter VI.)

The former Soviet republics of Central Asia—Turkmenistan, Uzbekistan and especially “the new Kuwait”, Kazakhstan—have vast oil and gas reserves. But Russia has refused to allow the US to extract it through Russian pipelines and Iran is considered a dangerous route. That left Afghanistan. The US oil company Chevron—where Mr. Bush’s National Security Advisor, Condoleezza Rice, was a director throughout the 1990s—is deeply involved in Kazakhstan. In 1995, another US company, Unocal (formerly Union Oil Company of California), signed a contract to export $8 billion worth of natural gas through a $3 billion pipeline which would go from Turkmenistan through Afghanistan to Pakistan.8

The oil and natural gas reserves of “the Eurasian Corridor” are substantial, at least of the same size of those in the Persian Gulf.9

The region of the South Caucasus and Central Asia could produce oil and gas in sufficient quantities to reduce the dependence of the United States on energy from the volatile Persian Gulf region. United States foreign policy and international assistance should be narrowly targeted to support the economic and political independence as well as democracy building, free market policies, human rights and regional economic integration of the countries of the South Caucasus and Central Asia.10

“Political and military conditions” in the region (meaning Russia’s presence and influence) have been viewed by both the Clinton and Bush administrations as:

… presenting obstacles to bringing this energy to the global market. … Both regions are the object of outside states competing for influence there. Not only Russia, but also China, Turkey, Iran, Pakistan and Saudi Arabia are competitively engaged, often in non-constructive ways. … If we [the US] and our allies cannot manage the second and third sets of realities, we will forego the benefits of the first set of realities. Bringing the oil and gas to market will be sporadic, if not impossible, and far more costly.

 

At the same time, the resulting political instabilities may turn both regions into a cauldron of civil wars and political violence, inevitably drawing in the surrounding states. We already have this pattern in the Persian Gulf region, requiring US military involvement, and we could hardly stand by politically, even if we did so militarily, if conflicts entangle Russia, China, Iran, Turkey, Pakistan and some of the Arab states in the Trans-caucasus or Central Asia.11

In other words, the successful implementation of the SRS requires the concurrent “militarization” of the Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” the pipeline routes on behalf of the Anglo-American oil companies.

“[A] successful international oil regime is a combination of economic, political and military arrangements to support oil production and transportation to markets.”12

In the words of a (former) CIA “policy analyst”:

Whoever has control over certain kinds of pipelines and certain kinds of investments in the region does have a certain amount of geopolitical clout. Such clout is something of a commodity itself, even if the physical control of the oil is not. For much of the Third World, this is a newer way of thinking about resources; it’s no longer the old story of Hitler’s Germany trying to get to the Caucasus and use the oil for its own purposes in World War II.13

Under the SRS Act, Washington commits itself to “fostering stability in this region, which is vulnerable to political and economic pressures from the South, North and East,” suggesting that “the threat to stability” is not only from Moscow (to the North) but also from China (to the East) and Iran and Iraq (to the South). The SRS is also intended to prevent the former Soviet republics from developing economic, political and defense ties with China, Iran, Turkey and Iraq.

Covert Operations on Behalf of the Oil Giants

Under the Bush administration, the US oil giants have gained direct access to the planning of military and intelligence operations on their behalf. This has been achieved through the powerful Texas oil lobby, resulting in the appointment of (former) oil company executives to key defense and foreign policy positions:
President George W. Bush’s family has been running oil companies since 1950.

Vice President Dick Cheney spent the late ‘90s as CEO of Haliburton, the world’s largest oil services company. National Security Advisor Condoleeza Rice sat on the board of Chevron, which graced a tanker with her name. Commerce Secretary Donald Evans was the CEO of Tom Brown Inc.—a natural gas company with fields in Texas, Colorado and Wyoming—for more than a decade. The links don’t end with personnel.

The bin Laden family and other members of Saudi Arabia’s oil-wealthy elite have contributed mightily to several Bush family ventures, even as the American energy industry helped put Bush in office. Of the top 10 lifetime contributors to George W.’s war chests, six either come from the oil business or have ties to it.14

Protecting Multiple Pipelines

In the context of GUUAM and the SRS, Washington has encouraged the formation of pro-US client states strategically located along oil pipeline routes. The latter are to be “protected” by NATO under GUUAM and various other military cooperation agreements. The hidden agenda is to eventually cut the Russians off altogether from the Caspian oil and gas fields.

The oil giants are vying for control over the oil reserves of Azerbaijan, as well as strategic pipeline routes out of the Azeri capital Baku on the Caspian coast.
A pro-US regime was installed in Azerbaijan under President Heydar Aliyevich Aliyev in 1993. In the military coup which brought him to power, Aliyev—a former KGB official and Communist party politburo member—was allied to Suret Husseinov, leader of the Jadovov clan.

In 1994 “the Contract of the Century”, involving the development of the Charyg oil fields near Baku, was signed with the Western oil consortium led by BP-Amoco. The Aliyev clan was in control of SOCAR, the State Oil Company, which has entered into joint ventures with the oil conglomerates. In addition to the links of the Azeri State to narcotics, there is evidence of a profitable black-market trade in raw materials, including trade of copper, nickel and other metals.

Western financial institutions, including the World Bank, had been actively involved in opening up the Azeri oil and gas fields to Western transnationals. Generous money payoffs had been channeled to politicians and state officials. The criminalization of the Azeri State had largely facilitated the entry of foreign capital:

Azerbaijan’s leaders are wined and dined on oil company expense accounts, while 600,000 Azeris still live in the most horrendous conditions ….The snake oil companies act as agents of their countries ’foreign policies and try to obtain commercial favors from Azeri leaders, who are ready to sell Azerbaijan’s resources cheaply and for personal gains … . Over $6 billion in contract “signing bonuses” were paid to the Aliyev regime in Baku—by far more than all aid and investments in Georgia and Armenia combined—yet Azeris still live in refugee camps, worse off than even Georgians and Armenians.15

With a view to weakening Moscow’s control over Caspian oil, several alternative pipeline routes had been envisaged. The Baku-Supsa pipeline—inaugurated in 1999 during the War in Yugoslavia and protected militarily by GUUAM—totally bypasses Russian territory. The oil is transported by pipeline from Baku to the Georgian port of Supsa, where it is shipped by tanker to the Pivdenny terminal near Odessa in the Ukraine. Both Georgia and the Ukraine are part of the GUUAM military alliance.

This Pivdenny terminal has been financed—in agreement with the (neo-fascist) government of President Leonid Kuchma—by Western loans. From there, the oil can be transported by pipeline “connecting to the already existing southern branch of the Druzhba pipeline, which runs through Slovakia, Hungary and the Czech
Republic”.16

NATO enlargement, announced shortly before the inauguration of the Baku-Supsa route, also ensures the protection of the connecting pipeline routes which transit through Hungarian and Czech territory. In other words, the entire pipeline route out of the Caspian sea basin transits through countries which are under the protection of the Western military alliance.

Chechnya at the Crossroads of Strategic Pipelines

Russia’s Soviet era pipeline linked the Azeri port of Baku on the Southern tip of the Caspian Sea, via Grozny, to Tikhoretsk. This pipeline route, controlled by the Russian state, terminates at Novorossiysk, and Chechnya is located at the crossroads of this strategic pipeline route.

During the Soviet era, Novorossiysk was the terminal for both the Kazakh and Azeri pipelines. Since the end of the Cold War and the opening up of the Caspian oil fields to foreign capital, Washington has incorporated the Ukraine and Georgia into its sphere of influence. Their membership in the GUUAM military alliance is crucial to Western pipeline plans, which are intent upon bypassing the Novorossiysk terminal, as well as shunting Moscow’s influence over the pipelines crossing its own territory.

In the immediate wake of the Cold War, Washington encouraged the secession of Chechnya from the Russian Federation by providing covert support to the two main rebel factions. As discussed in Chapter II, the Islamic insurgencies in Chechnya were supported by Osama bin Laden’s Al Qaeda and Pakistan’s ISI.
In 1994, Moscow went to war in order to protect its strategic pipeline route threatened by Chechen rebels. In August 1999 the pipeline was temporarily put out of order when the Chechen rebel army invaded Dagestan, triggering the Kremlin’s decision to send federal troops into Chechnya.

The evidence suggests that the CIA was behind the Chechen rebels, using Pakistan’s ISI as a “go-between”. Washington’s “hidden agenda” consisted in weakening the control of the Russian oil companies and the Russian state over the pipeline routes through Chechnya and Dagestan. Ultimately, Washington’s objective is to separate Dagestan and Chechnya from the Russian Federation, thereby bringing a large part of the territory between the Caspian Sea and the Black Sea under the “protection” of the Western military alliance.

Under this scenario, Russia would be excluded from the Caspian Sea. All the existing as well as future pipeline routes and transport corridors between the Caspian and Black Seas would be in the hands of the Anglo-American oil giants. The covert operations led by Pakistan’s ISI in support of the Chechen rebels once again serve the interests of the Anglo-American oil giants.

The BP-Amoco Consortium

Shouldered by BP-Amoco, a US client government had been installed in Azerbaijan. President Aliyev has established himself by distributing power to various members of his family. In Azerbaijan, a modest $8 billion investment is estimated to yield profits of more than $40 billion to Western oil companies.17 BP-Amoco was particularly anxious to shunt competing bids from Russia’s Lukoil.

The Anglo-American consortium led by BP-Amoco also included Unocal, McDermott and Pennzoil, together with Turkey’s TPAO. Unocal was also the main player in the pipeline project across Afghanistan to the Arabian Sea. (See Chapter VI.)

The BP-Amoco consortium owns 60 per cent of the shares in the Azerbaijani International Operating Corporation (AIOC). In 1997, in a separate venture, Vice President Al Gore was instrumental in the signing of a major oil deal with SOCAR allowing Chevron (now allied with Texaco) to acquire control over vast oil reserves in the southern Caspian Sea.18

Chevron is also involved in the Northern Caspian region of Kazakhstan through its joint venture Tengizchevroil. In other words, prior to the 2000 Presidential elections, both George W. Bush and Al Gore, the two opposing candidates, had already made commitments to competing oil conglomerates in the Caspian Sea basin.

Europe versus Anglo-America -The Clash of Competing Oil Interests

The Anglo-American oil giants, supported by US military might, are directly competing with Europe’s oil giant Total-Fina-Elf— associated with Italy’s ENI, which is a big player in Kazakhstan’s wealthy North East Caspian Kashagan oil fields. The stakes are high: Kashagan is reported to have deposits “so large as to even surpass the size of the North Sea oil reserves”.19

The competing EU-based consortium, however, lacks a significant stake and leverage in the main pipeline routes out of the Caspian Sea basin and back (via the Black Sea and through the Balkans) to Western Europe. The key pipeline corridor projects are largely in the hands of their Anglo-American rivals.

The Franco-Belgian consortium Total-Fina-Elf, in partnership with Italy’s ENI, also has sizeable investments in Iran. Total had established, together with Russia’s Gazprom and Malaysia’s Petronas, a joint venture with the National Iranian Oil company (NIOC). Predictably, Washington has, on several occasions, attempted to break France’s deal with Tehran on the grounds that it openly contravened the Iran-Libya Sanctions Act.

What this suggests is that Europe’s largest oil conglomerate, dominated by French and Italian oil interests in association with their Iranian and Russian partners, are potentially on a collision course with the dominant Anglo-American oil consortia, which in turn are backed by Washington.
 

Russia’s Oil Transnationals

Russia’s major oil groups, while establishing strong ties to the Franco-Italian consortium, have, nonetheless, also entered into joint ventures with the Anglo-American groups.

While Russia’s oil companies are supported by the Russian state and military against Western encroachment, several of Russia’s major oil giants (including Lukoil and the State-owned company Rosneft) are participating in the Anglo-American pipeline projects as junior partners.

The Anglo-American oil companies are intent upon eventually taking over the Russian oil companies and excluding Russia from the Caspian Sea basin. At the same time, the Anglo-American groups are clashing with the Franco-Italian consortium, which in turn has ties to Russian and Iranian oil interests.

The militarization of the Eurasian corridor is an integral part of Washington’s foreign policy agenda. In this regard, America’s quest to control the Eurasian pipeline corridors on behalf of the Anglo-American oil giants is not only directed against Russia, it is also intended to weaken competing European oil interests in the Transcaucasus and Central Asia.

Notes

1. George Arney, “US planned attack on Taliban”, BBC, 18 September 2001.
2. Financial Times, London, 6 May 1999, p. 2.
3. Ibid.
4. US Congress, Hearing On US Interests In The Central Asian Republics, House of Representatives, Subcommittee on Asia and the Pacific, Committee on International Relations, Washington, DC, http://commdocs.house.gov/commit-tees/intlrel/hfa48119.000/hfa48119_0f.htm, Washington DC, 12 February 1998.
5. Ibid.
6. US Congress, Silk Road Strategy Act, 106th Congress, 1st Session, S. 579, “To amend the Foreign Assistance Act of 1961 to target assistance to support the economic and political independence of the countries of the South Caucasus and Central Asia”, US Senate, Washington DC, March 10, 1999.
7. Ibid.
8. Lara Marlowe, “US efforts to make peace summed up by ‘oil’”, Irish Times, 19 November 2001.
9. Lt.-Gen. William E. Odom, USA, Ret, “US Policy Toward Central Asia and the South Caucasus”, Caspian Crossroads Magazine, Volume 3, Issue No.1, Summer 1997.
10. Ibid.
11. Ibid.
12. Robert V. Baryiski, “The Caspian Oil Regime: Military Dimensions”, Caspian Crossroads Magazine, Volume 1, Issue No. 2, Spring 1995.
13. Graham Fuller, “Geopolitical Dynamics of the Caspian Region”, Caspian Crossroads Magazine, Volume 3, Issue No.2, Fall 1997
14. Damien Caveli, “The United States of Oil”, Salon.com, 19 November 2001.
15. The Great Game. Aliyev.com, http://www.aliyev.com/aliyev/fact_07.htm, 9 January 2000.
16. Bohdan Klid, Ukraine’s Plans to Transport Caspian Sea and Middle East Oil to Europe, Canadian Institute of Ukrainian Studies, University of Alberta, Edmonton, undated. See also Energy Information Administration at http://www.eia.doe.gov/emeu/cabs/russpip.html 
17. See Richard Hottelet, “Tangled Web of an Oil Pipeline” The Christian Science Monitor, 1 May 1998.
18. PR News Wire, 1 August 1997.
19. Richard Giragosian, “Massive Kashagan Oil Strike Renews Geopolitical Offensive In Caspian”, The Analyst, Central Asia-Caucasus Institute, Johns Hopkins University, Paul H. Nitze School of Advanced International Studies, 7 June, 2000.

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