Derek Brower: Greed and corruption in the Caspian

Steve Levine has written an excellent book about the race to exploit the Caspian’s energy IF THE history of the oil industry’s role as a force for democracy and civilisation around the world is your thing, don’t read this book.* There is lots of oil and much pursuit of empire in Steve Levine’s account of the rush to exploit the hydrocarbons of the countries bordering the Caspian Sea during the 1990s. There is also much greed and corruption. Despite the book’s title, though, no one is covered in much glory. Levine was a foreign correspondent based in the region during the 1990s and watched as the fall of the Soviet Union triggered a scramble among Western companies to win contracts to produce and export the subsoil wealth that was suddenly freed from Moscow’s control.

It isn’t a pretty tale. Levine tells it through the experiences of the men and one or two women whose personalities influenced the history. Chevron’s efforts to win control of Kazakhstan’s Tengiz oilfield and BP’s race to become the main player in Azerbaijan’s offshore are two central and interwoven lines of narrative.But it is the shady middlemen, greedy executives and corrupt politicians that emerge as the antiheroes of his book. Levine repeats many of the rumours of backhanders, money laundering and deceit that some readers will already be familiar with. Some of his protagonists have already had to answer for their crimes in court. Others remain in power – or continue to seek it. Levine’s book contains some delicious details about how much was paid to whom in which country to expedite which deal. The rise and fall of fixers like the American James Giffen, for a time a personal adviser of Kazakhstan’s president Nursaltan Nazarbayev, and the Dutch oil trader John Deuss, at one point the broker for the pipelines that would take Kazakh crude to the Black Sea, make for a compelling story of greed and betrayal. The fortunes of both men have waned amid accusations of wrong-doing.Giffen claims to have been a CIA agent in Kazakhstan, though US courts are now investigating his role in high-level corruption in the country. His shady story has already been fictionalised in former agent Robert Baer’s book See No Evil and in the film Syriana. Whatever the truth of Giffen’s claims, the US’ role in the affairs of the region is hardly positive in this book. From Washington’s backing of the Taliban – in support of Unocal’s attempt to export energy through Afghanistan – to its support for some of Central Asia’s less savoury leaders in an effort to break Russia’s hold on the region, the policy was one of diplomatic Realpolitik. In hindsight, it looks even more dangerous that it might have seemed on the ground.The terrorist attacks in New York in 2001 changed everything, including much of the US’ involvement in places like Afghanistan. So did the rise in the oil price and the advent of resource nationalism. Indeed, the resurgence of Russian power – now decisive in Central Asia – and the presidency of Vladimir Putin are spectres that hang over this story of big oil in the Caspian region. The US might have scored a victory by ensuring the construction of the Baku-Tbilisi-Ceyhan pipeline (though not before its reluctant developer BP had extracted generous terms to build it), but power has swung back to Moscow again and away from Western countries and their energy companies. Levine’s book is almost a quaint reminder of the days when big oil and its cynical exponents were the true brokers. ENDS*The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, by Steve Levine. Random House: New York, 2007.