CHERNOMYRDIN CONCEDES RUSSIAN DEFEAT ON OIL PIPELINE.

Russian Prime Minister Viktor Chernomyrdin stated yesterday that "oil extraction in Azerbaijan’s offshore waters is Azerbaijan’s own business;" and that the main oil export route "will be determined by the owners of that oil" — that is, the companies involved in the projects. Chernomyrdin expressed Russia’ readiness "to participate, if invited," in building the main export pipeline for Azerbaijani oil. Chernomyrdin spoke following a session of Russia’s Consultative Council on Foreign Investment. (Russian agencies, March 16)

Only some ten days ago in Bonn, Russia’s First Deputy Prime Minister Boris Nemtsov had vehemently opposed non-Russian export routes for the "main" oil from Azerbaijan. Such a position disregards the solidifying consensus among Western governments and oil companies, Azerbaijan, Georgia and Turkey in favor of the Baku-Georgia-Ceyhan route that bypasses Russia. Chernomyrdin’s statement would seem to indicate either differences within the Russian government or a reassessment of the situation. His remarks imply not only acceptance of sectoral division of the Caspian Sea, but also readiness to participate in the Baku-Ceyhan project in return for a piece of the action. The interested companies and governments favor awarding Russia a limited stake as an incentive for obtaining Russian political acceptance of the project.

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