Tangled Web of an Oil Pipeline Competition to Control Central Asian Fuel Wealth Heats Up with Violence

Article excerpt

A dash of the surreal has been added to the stew of money, power, and murder simmering in Transcaucasia. Abkhaz separatists, demanding independence from Georgia, are threatening to blow up any pipeline moving oil from the rich new Caspian Sea oilfields to a terminal on Georgia's Black Sea coast. Tens of billions of dollars are at stake, which helps to explain the motivation. But who is doing what remains murky.

Abkhazia is a small triangle of land on the Black Sea in northwest Georgia, with a population of perhaps half a million, of whom less than 20 percent are ethnic Abkhazians. Some say the rebellion was started by Russia, to cut Georgia down to size. In any case, it was pursued with decisive Russian military support. A quarter of a million ethnic Georgians were driven out. Some of these who sought to return have been massacred.

Open war has ended after five years but violence continues. The separatists have proclaimed a republic. It has no international recognition, not even in Moscow. It recently advised US oil companies, among others, as well as foreign construction firms and bankers, that the billions they are investing are seriously at risk unless Georgia gives in. Speaking of a potential "war zone," one letter reads, "At the present time, Abkhazia has elements in place ready to implement plans to completely disrupt any efforts to install an oil pipeline through Georgian territory." Sizing up the roaring mouse It is hard to tell how real this threat may be. The roaring mouse has sharp little teeth and the pipeline runs within reach a dozen miles away. Moscow doesn't want that pipeline functioning under any conditions. It would like to see all Caspian oil flow through Russia, collecting transit fees that would increase exponentially as oil production goes into high gear after 2000. Russia's own petroleum industry is in a bad way. The world price at present just about equals the cost of production plus taxes and transit, meaning very little return from what has been one of Russia's most profitable exports. On February 10, an attempt was made to assassinate President Eduard Shevardnadze in the heart of Georgia's capital, Tbilisi. It was a highly professional job. A strong commando force choreographed an ambush with rocket grenades and heavy machine guns. Mr. Shevardnadze escaped when the driver of his armored limousine managed to run it out of range. No Russian connection has been established, but Shevardnadze spoke of a "third force" of "international terrorism" in Russia. This description might fit old communists, who consider Shevardnadze a traitor for his role in the collapse of the Soviet Union, or elements in the military or in the oil industry. Thirty months earlier, while negotiating with Turkey, a car bomb nearly killed Mr. …