Pipelines, Tankers and Economics Attempt to Navigate Turkey’s Narrow Straits

By Jon Gorvett

Few things can make a Turkish politician more concerned about the environment than the issue of Central Asian oil. While ministers may sign agreements to build floating coal-fired power stations just off the country’s tourist-heavy Aegean beaches, or turn something of a blind eye to the huge problems of deforestation and desertification blighting much of modern Anatolia, the prospect of Russian and other tankers streaming through the Bosphorus is guaranteed to turn them green—perhaps in more ways than one.

This was certainly the case in March, when the Russians announced the start up of the Tengiz-Novorossiysk oil pipeline, a massive project undertaken along with Kazakhstan to transport Kazakh crude to Russia’s principal Black Sea oil terminal. From there, the oil had only one way to go for export—by sea through the Turkish straits.

This was in many ways one of Turkey’s nightmares come true. For years now, Ankara, along with Washington, has been pushing for the construction of a rival pipeline, the Baku-Ceyhan line. This would transport Azeri Caspian oil via Georgia to the Turkish Mediterranean port of Ceyhan—a huge distance, and one that the Azerbaijan International Operating Consortium (AIOC) had long had difficulty with. To the oil men who made up the AIOC’s ranks, Baku-Ceyhan always looked like a costly business, with politics rather than economics its main motivation.

The point most observers seemed agreed on was that Baku-Ceyhan was being supported by the U.S. and Turkey because it formed part of a larger strategy to tie together a belt of states across Russia’s southern borders that would be brought into the Western orbit by such a route. Yet the strategy had been coming under increasingly hostile fire of late. Joining the chorus of critics were U.S. think tanks, who were beginning to argue that the project literally was a pipe dream, as disillusionment spread among Westerners who had direct experience of the South Caucasus and its violent blend of corruption, fanaticism and instability.

So Baku-Ceyhan had stalled. Meanwhile, though, others were still hard at work. The Iranians completed their section of a natural gas pipeline to Turkey in early 2000, the route the result of a deal made between Tehran and Turkey’s previous pro-Islamist government. When the pro-Islamists were given the heave-ho in 1997, their successors had put the Turkish stretch of the route in deep freeze—only to be confronted by a party of smiling Iranians last year on the other side of the frontier celebrating the construction of their part of the pipeline and waving a very large bill: the Turks had made the costly mistake of agreeing to a “take or pay” deal.

Critics were beginning to argue that Baku-Ceyhan literally was a pipe dream.

While that was being dealt with, the Russians and Kazakhs were still beavering away. The Tengiz oil field is one of the largest in the region, with other fields nearby that have yet to be fully explored. The pipeline to Novorossisk seems set to transport a huge amount of crude then, with the U.S. company Chevron the largest corporation in the consortium that constructed it.

The oil still has to get to market, however, and the quickest way for it to do that is by sea through the Bosphorus and Dardanelles, the Turkish Straits. On cue, Turkey’s politicians lined up to denounce this within hours of Moscow announcing that the Tengiz route was now coming on line.

Ankara’s argument is that the Bosphorus runs right through the heart of Istanbul, a city of some 12 million people. The channel is a narrow one and there are frequent collisions and groundings. An accident with an oil tanker would be highly dangerous, the argument runs, with the possibility of an explosion—and the release of poisonous gases—causing mass fatalities.

It’s an argument that environmental groups—particularly Turkish ones—broadly support. Ministers have said that the Bosphorus cannot be “used as a pipeline,” and “eco-warriors” have held protests in the straits against any more tankers being let through. Meanwhile, Chevron has made the claim that the pipeline will mean only one extra tanker per day “in its initial stages.”

Also having difficulty passing through the straits recently has been what some have seen as a much more direct threat to U.S. interests. The aircraft carrier Varyag, once the would-be jewel in the crown of the Soviet Black Sea fleet, now rests at anchor in Sebastopol—some thousands of miles away from where its new owners are pondering their next move.

**The Varyag Saga**

With the fall of the Soviet Union, the incompleted Varyag was transferred to a Ukrainian flag. Lacking any engines and basically consisting of no more than the hull, the Ukrainians then tried to offload it onto someone else. Back in 1998 they tried to tow it through the Bosphorus and out into the Mediterranean, but the Turkish authorities refused them permission. Then, along came the Chinese—or, to be more precise, a group of Macao businessmen. They bought up the hulk with the stated aim of converting it into a floating casino to be moored in Macao harbor. Late last year, however, their plan hit the same snag, with Ankara still refusing permission for the carrier to pass through the straits. China’s premier, visiting Turkey in January, tried to push for a change of mind, whereupon the Turks set up a committee to look into the matter, a final report having been issued at the end of March.

It is not clear what that report said, but what does seem clear is that the Turkish General Staff, citing security and safety risks, intervened and said that under no circumstances would the carrier be allowed to pass through. Some had felt that the 300-meter-long carrier plus 200-meter tow rope would be far too long to negotiate the straits’ narrow turns.

So now the Varyag continues to rust at anchor back in Sebastopol, a sorry sight as well as one that seems ill-matched when placed against some observers’ image of the vessel as China’s first aircraft carrier, and a grand threat to U.S. interests in the Pacific.

Such strategic issues, however, have probably been far from most Turks’ minds of late. With a March report from bankers Credit Suisse First Boston (CSFB) saying that Turkey was “going through its worst economic crisis” in history, the more pressing issue has been financial survival.

As even blue chip companies struggled to repay high-interest loans to banks that were themselves on the edge, Prime Minister Bulent Ecevit joined calls from his new economics sultan, Kemal Dervis, for a massive injection of money into the Turkish economy from overseas. Overseas lenders were unsurprisingly reticent to send in more cash, however, without clear signs of a political and structural overhaul underway—the kinds of thing to which there is a great deal of resistance from within Ecevit’s government itself. A new economic program was eagerly awaited following the mid-February crash, yet by mid-April, two months later, it had yet to appear.

For many ordinary Turks, the effect was catastrophic. Unemployment began to rocket as winter came to an end, while inflation, boosted by dramatic falls in the value of the Turkish lira, swelled.

It is often said that Turkey is at a crossroads. In Istanbul, this expression seems more apt than anywhere else. However, nowadays it seems a crossroads in which many directions are blocked, by financial crisis and strategic interest alike.

Jon Gorvett is a free-lance journalist based in Istanbul.