San Francisco Chronicle - September 21, 2003

Caspian Sea oil promises to someday free us from our unhealthy dependence on the Persian Gulf. But that doesn't mean people living in the Central Asian countries that surround the estimated 200 billion barrels of untapped "devil's tears" will live in peace anytime soon.

In "The New Great Game," German journalist Lutz Kleveman takes readers on a fascinating trip through 10 countries that all have a stake in the future of the riches buried deep beneath the world's largest inland body of water.

The travelogue begins in the oily city of Baku, Azerbaijan, the scene of a 19th century oil boom bankrolled by the Nobel and Rothschild families of Europe. Baku never lived up to its promise, and investment money disappeared amid violence. But the city still became a target of Axis powers during both world wars, after which the Soviets kept Azeri oil fields pumping at a steady but unremarkable pace.

Despite Baku's disappointing past, another oil boom is in full swing. In 1994 Azerbaijan's crooked but ambitious leader Heydar Aliyev, an old KGB man, signed some of the first post-Soviet concessions in the region with Western oil companies. The country is still drowning in bitterness over losing a bloody war to its neighbor and arch-enemy Armenia in the early 1990s. But it clings to the hope that oil wealth will allow it to someday exact revenge.

Nearby in Georgia the corrupt regime of Edward Shevardnadze has badly damaged the once beautiful and cosmopolitan city of Tbilisi. A proposed 1,090- mile pipeline that BP plans to build from Baku all the way to tankers waiting in Turkey will run through the country. Shevardnadze's embarrassed diplomats hope, probably in vain, that the pipe will make the United States care enough about their country to push for reforms.

Kleveman paints a vivid picture of Atyrou, a city in Kazakhstan dubbed the new Houston of Central Asia ever since offshore engineers found the Kashagan oil bubble in 2000. It holds perhaps 30 billion barrels. That makes it the second biggest in the world after a field in Saudi Arabia. Just as in developed countries, there's a Kazakh environmental movement trying to stop the drilling because of threatened seals and sturgeon.

Kleveman also shows how a new friendly Afghanistan could keep the oil in the region from falling into the wrong hands. Because Kazakhstan is blocked by China and Russia, and already flirts with Iran's offers to swap oil across the sea, Afghanistan in the south might be the only viable outlet.

Meanwhile Russia is steaming like a hot bania bath because the United States has collaborated with the now independent pieces of its former empire, cutting it out of the wealth it feels should be funneled north. Its aggression in Chechnya, in which somewhere approaching 100,000 civilians have perished, is fueled in part by a desire to hang on to influence in the slippery region. Grozny, Chechnya's bombed out capital, was once a thriving refinery city.

Worse than Russia's interference in the region, at least from the U.S.' standpoint, are the aims of Iran and China, who hope to pump oil south and east, respectively.

On a plane to Tehran, Kleveman meets an oil dealer who talks conspiratorially about the country's secret plans to "thwart" the Baku pipeline. The author makes the strong case, however, that Iran is not fomenting Islamic radicalism in the region as much as Pakistan, which he calls the "cradle of terror."

All in all, the situation creates a tinderbox that has already thrown off quite a few sparks. Even so, Kleveman somewhat unconvincingly spends the last few chapters tying the region to the Sept. 11, 2001, attacks, mixing in war reporting from Afghanistan, which he covered for the British Telegraph and CNN.

At times he verges into a discourse on "why they hate us" that sounds like a bad episode of "The West Wing." He could have focused more narrowly on the Caspian Sea oil and practical strategies for how its natural resources might be developed with the least amount of bloodshed.

In what is no doubt a reflection of his experiences, Kleveman seems to spend too much time stuck at highway checkpoints, making it sometimes difficult to scratch below the surface of these complicated countries. All in all, however, Kleveman tells a spellbinding tale of "blood and oil" on an authentic frontier full of bandits, gangs, crooked politicians, modern-day robber barons and even whole renegade provinces, such as Abkhazia in Georgia.

We should hope, for the sake of the civilians who populate the Caucasus and Caspian region, that it can find some way to achieve stability. Having covered the diamond industry in Sierra Leone and oil fields in Nigeria, where, as he puts it, "the struggle for raw materials can lead to conflicts and wars," Kleveman himself is pessimistic.

David Whelan is a business writer in San Francisco.




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