NEW GREAT GAME IS ENTERING DECISIVE PHASE

Turkey’s Republic Day would have been a milestone in the world’s energy projections for the 21^st century, but ongoing multilateral bargaining may delay it a few weeks. Will Turkey and the United States continue the very productive cooperation for the Baku-Ceyhan pipeline hitherto or will it be a sad parting of ways? If the latter what will it involve and how durable is it likely to be? What are the Turkish reactions to and trump cards for this “New Great Game”?

Two decisive steps would have been taken on October 29^th, Turkey’s Republic Day, about the oil and natural gas pipeline routes from the Caspian basin to the West, but they may be postponed due to the importance of the issue.

One is the expected announcement of the American oil multinationals for the Baku-Ceyhan pipeline originally on September 29^th, but due to Turkey’s reactions to disturbing press reports it was postponed to November 9^th. The other is the Turkmen gas under the Caspian to Baku and then to Ceyhan. Promising developments have taken place in that regard by Turkmenistan’s coming round in principle to a joint US-Turkish project. But there were disturbing press reports from the United States about the first, endangering the second too.

End of the Baku-Ceyhan project according to New York Times?

The New York Times (11^th) has reported, contrary to repeated previous statements by the American Government, that there is not much chance of the implementation of the Baku-Ceyhan pipeline either for the Azerbaijan and other Caspian oil or for the Turkmen gas. According to the reputable American daily, the multinationals prefer the Baku-Supsa pipeline for the so-called “early oil”. They maintain that reinforcing and enlarging that pipeline can ship oil more economically to the outside world.

It means the end of the Baku-Ceyhan pipeline idea for at least decades to come and also shipping the Caspian oil through the Turkish Straits by tanker. The third, and maybe the most important and tragic outcome of such an eventuality, is the fury of the Turkish nation and Government, and sure enough it was instantly manifested at top level.

The Turkish Government refuted the multinationals’ claim that the Baku-Ceyhan pipeline would cost $4 billion and put the figure at $2.7 billion. President Demirel instantly assured the nation that, come what may, the Baku-Ceyhan pipeline would definitely be materialized. Not satisfied by verbal assurances he immediately sent Energy Minister Cumhur Ersümer to Baku and other capitals of Central Asian Republics to make top-level arrangements about these developments.

The result was an increase in the number of foreign Heads of State to visit Turkey on the October 29^th from one, President Aliyev of Azerbaijan, to five, with the addition of four other counterparts of Demirel and Aliyev from the Turkish speaking Central Asian Republics. That is if the efforts to forestall this historic meeting do not succeed at the last minute.

Ersümer’s Baku-centred Central Asian visits on October 18-19^th included contacts with Moscow as well as Washington, as American Government members concerned with oil were also hanging around to see and influence what was going on. Did Ersümer influence the American Administration and multinationals, instead of their influencing the result on October 29^th or November 9^th is not yet known for sure.

As things stand today the Clinton Administration is still supporting the Baku-Ceyhan project. The Head of the South European Division of the State Department, Morton Dworken, confirmed it at a press conference in Ankara on October 14^th after his meeting with Cumhur Ersümer. He said that the American Government was trying to persuade 15 American oil companies about Baku-Ceyhan. President Clinton’s National Security Advisor Samuel Bergen would hold a meeting with the representatives of the multinationals in Washington on October 22^nd as part of the American Government’s persuasion efforts.

In Washington, Ambassador Morningstar, President Clinton’s special advisor for the Caspian Basin, was even more outspokenly in favour of Baku-Ceyhan of which he says, “absolutely makes sense” and strongly against the Iranian route, irrespective of the current US-Iranian dispute in the political field. He may come to Ankara on October 25^th to say things which are music to Turkish ears and the Secretary of Energy Bill Richardson may continue with this “singing” in Ankara a week or so afterwards.

Before these visits, the US Under-Secretary for International Trade, Stuart Eizenstat, headed an American delegation to Ankara to have talks with State Minister Işın Çelebi and Energy Minister Cumhur Ersümer on October 21^st. Their talks concerned Baku-Ceyhan, an $827 thousand American loan for energy projects and the Türkmen natural gas. Eizenstat supported these projects and the United States signed agreements for building two energy projects in Turkey. Talks about Baku-Ceyhan and the Turkmen gas, however, were far from being conclusive.

As for the western multinationals, allegedly influenced by British Petroleum rather than the American companies, they are going on with their “noise” against the Baku-Ceyhan pipeline. Important among them is the newly amalgamated BP-Amaco that holds 40% of AIOC’s shares. If it votes against Baku-Ceyhan on November 9^th Turkey will revise its policy towards that company and may stop oil purchases from Amaco’s production in Egypt.

For all these reasons and due to Moscow’s caution about joining the multinationals against Baku-Ceyhan, the November 9^th announcement by the companies is not expected to be a resolute objection to the project, but rather an expression of a doubt, if any.

Turkish speaking nations’ solidarity

Perhaps a more important influence in the whole affair was the remarkable solidarity of the newly emerged Turkish-descent Republics of the Caspian region. The technical delegations from these countries decided in Ankara on October 19^th on the details of the oil and natural gas from Azerbaijan, the Caspian and Turkmenistan. The five Heads of State in question readily responded to President Demirel’s approach and put their weight behind Turkey in this issue which is sure to shape the world in the new century.

They will make a joint declaration in Ankara on the 75^th anniversary of the Turkish Republic, on October 29^th, in support of the Baku-Ceyhan pipeline, if their meeting does not fall through.

Indeed, there are significant efforts to upset this solidarity of not only the Central Asian Republics, but also in the Turkey-Azerbaijan-Georgia triangle. President Heidar Aliyev is staunchly behind the Baku-Ceyhan project and wants it to have a capacity of 50 million tons/year, while the multinationals want to keep it to 10 million tons/year for as long as they can. That is the basis of their favouring Baku-Supsa with the claim that the current low oil prices do not justify a more costly Ceyhan extension.

The enormous wealth and strength behind the multinationals also “persuade” some Azeris and rulers of the other countries concerned against the wisdom of these arguments. Consequently, upon deciding about passing the main Azerbaijan oil through the Baku-Ceyhan route the Azerbaijan delegation decided that Turkey’s offer about building this pipeline concerns solely the Turkish part of the pipeline. Thus, the Turkey-Georgia-Azerbaijan solidarity and unity is divided into two, Turkey-Azerbaijan and Azebaijan-Georgia routes, according to Radikal (17^th).

This newspaper’s pessimism has gone as far as claiming that the plans for the Baku-Ceyhan pipeline are falling through, but reality is far from justifying this desperate outlook.

Turkey counters anti-Baku-Ceyhan efforts

Ankara has been refuting the American daily’s claims that the multinationals and American rulers cannot find responsible persons to address in Ankara and that Turkey has not answered their proposals and suggestions about facilities to the companies in oil shipments through the pipeline. Foreign Ministry sources said, “It is not true that you can find no one to negotiate with in Ankara and that Turkey has not put forward its trade proposals. We have a board designated by a governmental decree. Turkey has put forward its trade proposals. The truth is they have not answered them.”

The same sources also underline the difficulties involved in tanker passages through the Straits and say, “We are introducing compulsory insurance for these passages. It will make this route more expensive. Besides, tankers will have to wait for 5-6 days for passages in alternate directions and the cost to shipping companies is self-evident. We may even close down the Straits for a week, if necessary. It will not take them long to realize how costly it is to run this business from the Baku-Supsa route, even if they may eventually decide upon it.”

Speaking even more outspokenly, Foreign Minister İsmail Cem said on October 21^st that Turkey would not resort to illegal ways to stop tanker passages through the Straits, but they would do everything possible within international law to slow down and obstruct this navigation. “Let everyone know this fact as it is,” he warned.

These “legal obstructions” may include a provision of the Montreux Convention that calls for payment in gold Franks of the several services extended to ships passing through the Straits. If this provision, which was changed in 1973 into payment in Dollars, is reinstated the cost of transit passages for ships through the Straits will increase six-fold. A 150 DWT ship has so far been paying $33,600 for these services. If the gold Frank basis is restored it will rise to $161,000. During the 1981-1983 interregnum the Ulusu Government attempted to restore the gold Frank rates, but gave up in view of international reactions. This time too Turkey is bound to feel world pressure if such a step is taken and this may even go as far as attempts to revise the Montreux Convention. But the Baku-Ceyhan pipeline being so crucial and vital for Turkey, it may resist any such outside pressure. Current world strategic balances enables Ankara to carry out such an operation successfully

President Demirel told the 12^th Petroleum Assembly in Istanbul on October 12^th that it was impossible to pass 50-million tons/year Azerbaijan oil through the Straits even if the tankers passed through like cars in the rush hour, bumper to bumper. “We are a maritime country. We can get the oil from wherever we want. We are showing them the way out. We tell them ‘come and use our Mediterranean ports’. The sole safe and economic route for the Caspian oil and natural gas is the Baku-Ceyhan pipeline. There is no alternative. The Baku-Ceyhan pipeline will definitely be built. Azerbaijan, Georgia and Turkey are resolute about this route. The United States has given its support and promised unlimited financing for it,” he stressed.

The President also urged the Government to amend, in the light of today’s oil and gas problems, the oil bills passed in the fifties and attract foreign capital in pursuit of national interests.

Energy Minister Ersümer described at the Assembly the American press reports as playing one customer against another. “This is a worldwide international game. That is what they are playing,” he affirmed.

Congested Bosphorus is Turkey’s trump card

The Turkish press carried last week the details of 13 big tanker accidents and fires which had taken place since 1948 in the Bosphorus, claiming the lives of 92 people and risking the safety of 12 million people who live in Istanbul.

According to the official figures released by competent authorities, in 1995, of the 46,954 ships that passed through the Straits 2,871, carrying 41,016,624 tons of oil, were tankers. In 1996 the number of ships rose to 49,952, tankers to 4,248 and the oil to 60,242,436 tons. With a further increase in 1997 these figures rose to 50,942 ships, 4,303 tankers and 63,017,194 tons of oil.

These figures average 140 ships, 12 tankers and 175,000 tons of oil through the Bosphorus every day. Adding the navigation of about 2000 local ships and vessels a day and the additional burden to be imposed by the Baku-Supsa pipeline in its enlarged and reinforced form, it is obvious that the Turkish Straits cannot replace the Baku-Ceyhan route as an alternative. President Demirel has also dismissed the possibility of the Constanta-Adriatic pipeline as an addition to Baku-Supsa, with tankers loading and unloading the crude oil at both ends.

In addition to these facts, there is also the question of credibility of the American Administration. It is a fact that in less than a year Turkey brought all the countries concerned round to the Baku-Ceyhan project, including the tortuous way for the Turkmenistan natural gas from under the Caspian. But just as everything comes to the finishing point the multinationals are dragging a red herring across the trail.

Is it possible to explain it away with President Clinton’s declined popularity and authority due to Monica? The American Government is sure to put down its weight and carry out the plans as drawn up by the two sides in December 1997 and thereafter.

The winner of this New Great Game for the next century is bound to be the Turkish-American cooperation for the good of the world in the following years, rather than greedy business dealings. uras@ada.net.tr, October 21^st, 1998