The oil wars getting hotter

Posted on Thu, Dec. 21, 2006
Death of Turkmen leader may trigger battle over gas reserves
By David Stern
McClatchy Newspapers

ALMATY, Kazakhstan - The death of the idiosyncratic and iron-fisted dictator of Turkmenistan, a former Soviet republic that borders both Iran and Afghanistan, could trigger a new round in the fierce battle between the United States and Russia for control of Central Asia's huge oil and gas reserves.

Saparmurat Niyazov, 66, whose death was announced Thursday after an apparent heart attack overnight, left no clear successor. That circumstance, analysts said, is likely to allow Moscow and Washington to jockey for influence over the country's gas supplies.

Turkmenistan is the second-largest natural gas producer in the former Soviet sphere, after Russia. According to the BP Statistical Review of World Energy, the country holds 2.9 trillion cubic meters of gas, though estimates vary on how large its reserves actually are.

Niyazov's death immediately sparked worries of instability and possibly bloodshed. Named "President for Life" by his rubber-stamp legislature in 2002, he'd provided no clear way to assure a peaceful transfer of power.

For the moment, Deputy Prime Minister Gurbanguly Berdymukhammedov has been named acting head of state. News agencies reported from Turkmenistan's capital, Ashgabat, that the city was calm, though New Year's decorations had been removed and many stores were closed. Niyazov's funeral will take place Sunday.

The Turkmen strongman was best known in the West for his bizarre personality cult, which rivaled that of North Korea's Kim Jung Il. Niyazov called himself "Turkmenbashi" - or Father of the Turkmens - and plastered his image everywhere imaginable: on government buildings, statues, banknotes, vodka bottles, even on watches.

He was also given to outlandish pronouncements, renaming the days and months of the year to honor himself and members of his family. Visitors called his impoverished country, which he ruled since becoming the local Communist Party leader in 1985, "Absurdistan."

The jokes, however, masked a much grimmer reality, where the majority lived in abject poverty, state security services controlled the population through fear, and the country was cut off from the outside world.

Niyazov's clownish reputation also belied the strategic importance of Turkmenistan's hydrocarbons to Russia and the United States.

Since the Soviet Union broke up in 1991, Moscow and Washington have fought for influence over Central Asia's energy deposits, which count as some of the world's largest non-OPEC reserves.

The struggle has come to be known as the "New Great Game," in reference to a similar fight for influence in Central Asia between Great Britain and Russia in the 19th century.

Turkmen gas is among the biggest prizes in this latest competition.

So far, the Kremlin has been the clear winner in Turkmenistan. Moscow buys the majority of the country's gas exports at discount prices, exploiting the fact that the landlocked country has only the Russian pipeline system to ship to outside markets.

The gas is crucial to the Kremlin's worldwide gas strategy. Gazprom, the Russian gas monopoly, dominates the European market, but needs additional supplies to bolster its own strapped deposits. Turkmen gas is sent to Ukraine, which frees up Gazprom's reserves.

"I think obviously Russia is going to make a play to keep this country in its orbit, and make it quickly," said Martha Brill Olcott, a Central Asia expert at the Carnegie Endowment for International Peace in Washington. "Turkmen gas is much too important, especially this winter."

However, America and Europe have their sights set on Turkmenistan's reserves as well. Central Asian gas, piped across the floor of the Caspian Sea, then through Turkey and the Balkans, could help break Gazprom's hold.

Washington actively promoted a trans-Caspian pipeline in the late 1990s, but the demands of the mercurial President Niyazov proved to be a stumbling block, U.S. officials said at the time.

Niyazov, however, revived the idea of a pipeline along the Caspian seabed with European officials in the months before his death.

In the mid-1990's, U.S. officials also pushed a project for a gas pipeline from Turkmenistan across Afghanistan - an idea that has been revived since the Taliban's fall from power.

Recently, a new player has entered the Great Game: China. In April, Ashgabat promised to ship large amounts of Turkmen gas to help feed China's growing energy appetite. However, many observers questioned if the Central Asian state actually had sufficient reserves to meet the pledge.

So great is the draw of Turkmenistan's gas, some observers fear that outside powers may disregard Turkmenistan's political future in order to gain influence over its reserves.

"Gas may be what everyone sacrifices everything else for - they could sacrifice the country's stability for gas," says Martha Olcott. "That's the risk."