'Little Kuwaits' on the Caspian Oil rush: As multi-nationals scramble for mega-profits, Moscow wants to tighten control.

February 17, 1997

AS GOURMANDS know only too well, catches of Caspian sturgeon, source of the coveted beluga caviar, are fast diminishing. Since the collapse of the Soviet Union, rules against over-fishing have evaporated. Meanwhile, pollution has worsened as multi-national firms scramble to exploit huge oil deposits under the Caspian Sea.

Residents will tell you that the local economies have gone to ruin since the former Soviet states gained independence. Yet the long-range prospects of Kazakstan, Turkmenistan and Azerbaijan are bright.

Enormous amounts of oil and gas have been discovered underneath the Caspian sea bed. Foreign oil giants, led by Chevron and Mobil, have signed deals worth billions of dollars to exploit the deposits. There are plans to construct two pipelines to get the oil to world markets. Because of this potential oil wealth, the now-independent Caspian basin republics are being flippantly referred to as "Little Kuwaits."

As in the Middle East, the Caspian oil riches are producing new tensions in the region. Russia, which also borders on the Caspian but so far has not discovered important deposits, wants its share of the profits. Moscow argues that the Caspian is not a sea but a lake. The distinction is important: If the Caspian is deemed to be a lake, any off-shore energy reserves -- most of which lie near Kazakstan and Azerbaijan -- would legally be the common property of all the surrounding states.

Among the former Soviet republics, Kazakstan ranks second in area, fourth in population and third in economic output, energy production and consumption. Along with Belarus, it has been among the handful of former Soviet states which have consistently sought closer economic integration with Russia.

Because of the oil deposits, Moscow is likely to increase its watchfulness in the region. Russia may not be among the important Caspian oil producers, but it wants to control the spigots if two proposed pipelines are built. One of those lines would terminate in Novorossiysk, a Russian Black Sea port. The other would end up in Georgia, where Moscow has aided a secessionist movement in order to put screws on the independent-minded local government.

Pub Date: 2/17/97

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