Why Should Chechnya Need a New Oil Pipeline?

Date: August 18, 1998
Source: Nezavisimaya Gazeta
By Alexander Ruzsky


The extraordinary steps taken by the Chechen leaders over the recent period increasingly show that their strategic aims have long since gone beyond the idea of a "small, but proud" people seeking to uphold its independence in an unequal struggle with a giant colonial power. How otherwise to explain the huge mass of plans in the political, economic and cultural fields with which the leadership of Chechnya is regularly surprising the world.

One of such ambitious projects embodies the idea of a Caucasian common market, which is called upon to bring prosperity and well-being to the entire region," and to Chechnya, in addition, its recognition by the world community as an important subject of international commodity exchange and, consequently, international law. The idea itself is not new, it was nurtured by the British back in the twenties.

What's new is that the key place in today's plans is occupied by Chechnya, which has never been either the political, or economic, or cultural centre of the region, as well as the fact that figuring in the company of co-founders are both former crime boss Nukhayev and Margaret Thatcher's closest friend, Lord McAlpine.

Chechen relations with Georgia have become the key component of the process of the realisation of the idea of creating the common market. A whole number of factors are conducive to this. First, the potentially most convenient transport routes run through Georgia bypassing Russia. Second, Georgia is traditionally one of the most economically and culturally developed countries in the Caucasus, and has a certain influence on Western elites thanks to the presence in many foreign countries of a sufficiently rich Georgian diaspora and the international prestige of its president. Third, the Georgian leadership, above all President Shevardnadze, is pursuing a "consistent" anti-Russian policy which cannot but impress the Chechens, who have declared a genuine sacred war - jihad - on "Russianism."

The most significant practical move towards developing a strategic partnership between Grozny and Tbilisi has become the construction of a highway between Shatili and Itum Kale, which will link Chechnya and Georgia. The Chechen section of the road is almost completed. As for the Georgian section, the work for a number of reasons, primarily of a financial character, has not yet begun. Along this highway, which will connect Grozny via the Georgian capital with ports on the Black Sea coast and Turkey, an oil pipeline must be constructed later. Combined, the highway and pipeline must form a new transport corridor of regional importance.

What are the real mechanisms of all these projects and where can their realisation lead? Even to a detached observer, the economic justification of the Grozny-Tbilisi oil pipeline must appear doubtful. First, the throughput capacity of the existing pipelines is so far sufficient, and, second, as already mentioned above, it is simply inexpedient to extend pipes through the mountain ridge. With the aid of the new "pipe" the Chechen leaders are going to organise the export of their own oil. But the profitability of the oil fields in Chechnya itself is very low and so far remains in the category of potentially possible. It is an inadmissible luxury for a republic lying in ruins to build a new pipeline for nonexisting oil production along a highly expensive route. In addition, there is a sufficiently influential group of people in Chechnya who have no interest in developing a local oil producing industry. They are the owners of the mini plants for the processing of petrol condensate (most of them are influential field commanders), with whom even Dzhohar Dudayev tried to wage an unsuccessful struggle (according to some data, more than 20 million tons of condensate have accumulated under Grozny alone).

It can thus be concluded that the project for the construction of the oil pipeline from Chechnya to Georgia pursues not economic, but above all political and military-strategic aims, and so its profitability will directly depend on political decisions. It is doubtful that Western investors will risk their capital for the sake of yet another adventure of Grozny.

But then, another version is also possible: Moscow will come to the aid of Grozny, or, more precisely, the influential politico- financial clans which are interested in seeing Chechnya continue to remain the "black hole" of the Russian economy and finances. In this case the construction of an uncontrolled export "pipe" takes on a new significance and special investment attractiveness. Such a scenario fits quite well into the overall context of Russian-Chechen relations and threatens the permanently crisis-ridden Russian economy with new financial losses. In all probability this is what the Ichkerian leaders count on.

It is obvious that the ordinary Chechens can expect no dividends from the project in the foreseeable future.


© 2007 Chechen Republic Online