The great game of Caspian energy: ambitions and realities

Abstract

It is now clear that the hydrocarbon reserves in the Caspian Basin are much lower than had been believed in the West in the early period since the break-up of the USSR, and that production from the area will never make a major contribution to the world’s energy security. Proceeding from their geopolitical and business considerations, the region’s prospects have been deliberately exaggerated over the past decade by international oil companies, the local and Western governments and Wall Street analysts. Now, as the production of oil and gas is entering its earnest phase, many investors are withdrawing from the region, after having found no new deposits, while the remaining companies are struggling to fill the export pipelines built during the Caspian rush with oil in commercial quantities. Conversely, another fiction forecasting a dramatic surge in Turkey’s natural gas demand has led to construction of expensive gas pipelines, which have been rendered useless as soon as this second Caspian fancy burst with confusion. Meanwhile, the ‘great game’ continues, shifting from oil to the sphere of geopolitical re-division, accompanied by the arms race on the Caspian Sea.