the late 1980s and early 1990s as the Soviet system was disintegrating.
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THE CASPIAN DERBY
In the late 1980s and the beginning of the 1990s, as the Soviet Union started to come unhinged, the first Western oil men had begun to drift down toward the south, to the Caspian and into Central Asia, into what would after 1991 become the newly independent countries of Azerbaijan, Kazakhstan, and Turkmenistan.
Historically, the most important city on the Caspian coastline was Baku. A century earlier, Baku had been a hub of great commercial and entrepreneurial activity, with grand palaces, built by nineteenth-century oil tycoons, and one of the world’s great opera houses. But what these arriving oil men now found instead, amid the splintering of the Soviet Union, were the remnants of a once-vibrant industry and what seemed almost like a museum of the history of oil.
The interaction between these oil men and the newly emerging nations would help wrest these countries out of their isolated histories and connect them to the world economy. The results would redraw the map of world oil and bring into the global market an oil region that, by the second decade of the twenty-first century, would rival such established provinces as the North Sea, and would include the world’s third-largest producing oil field.
The development of the Caspian oil and natural gas resources was inextricably entangled with geopolitics and the ambitions of nations. It would also help define what the new world—the world after the Cold War—would look like and how it would operate.
At the center is the Caspian Sea itself, the world’s largest inland body of water, with 3,300 miles of coastline. Though not connected to any ocean, it is salty, and also subject to sudden, violent storms. Azerbaijan is on its western shore. To the west of Azerbaijan are Georgia and Armenia—the three together constituting the South Caucasus. On the northwest side of the Caspian, above Azerbaijan, are Russia and its turbulent North Caucasus region, including Chechnya. On the northeast side of the Caspian is Kazakhstan; and, on the southeast, Turkmenistan. On the southern shore is Iran, with ambitions to be a dominant regional power and with interests going back to the dynasties of the Persian shahs.
THE NEW GREAT GAME
The fierce vortex of competing interests in this region came to be known as the new “Great Game.” The term had originally been attributed to Arthur Conolly, a cavalry officer in the British army in India turned explorer and spy, whose unfortunate end in 1842—he was executed by the local ruler in the ancient Central Asian town of Bukhara—captured both the seriousness and futility of the game. But it was Rudyard Kipling who took up the phrase and made it famous in Kim, his novel about a British spy and adventurer, at the front line in the late nineteenth century in the contest with the Russian Empire.1
But this purported new round in the Great Game, at the end of the twentieth century, included not just Russia and Britain, the two main contenders from the first round in the nineteenth century, but many more—the United States, Turkey, Iran, and, later, China. And of course the newly independent countries themselves were players, intent on balancing among these various contending forces to establish and then preserve their independence.
Then there were the oil and gas companies, eager to add major new reserves and determined not to be left out. And hardly to be overlooked was the jostling of the wheelers-dealers, the operators, the finders, and the facilitators, all of them out for their cut. This is a grand tradition established in the first decades of the twentieth century by the greatest oil wheeler-dealer of them all, Calouste Gulbenkian, later immortalized as “Mr. Five Percent.”
CASPIAN SEA AND THE CAUCASUS: THE “NEWLY INDEPENDENT STATES”
The breakup of the Union reconnected a resource-rich region to world energy markets
Rather than the Great Game, others used the less dramatic shorthand of “pipeline politics” to convey the fact that the decisive clash was not that of weapons but of the routes by which oil and natural gas from the landlocked Caspian would get to the world’s markets. But to some, watching the collisions and the confusion among the players, hearing the cacophony of charges and countercharges and the bluster and banging of deal making, it was better described as the Caspian Derby. Whatever the name, the prize was the oil and natural gas—who would produce it, and who could succeed in getting it to market.
THE PLAYERS
The Soviet Union was gone. But