[Congressional Record Volume 140, Number 136 (Monday, September 26, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 26, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                         AZERBAIJAN'S OIL DEAL

 Mr. DeCONCINI. Mr. President, this week, President Heydar 
Aliev of Azerbaijan signed a very important contract with a consortium 
of Western companies to extract and sell Azerbaijan's oil. I am pleased 
that a deal has finally been struck, which will benefit both United 
States firms and the people of Azerbaijan. At the same time, this 
agreement involves the United States much more deeply than before in 
the region and its conflicts, which has many implications.
  A critical undecided matter is how to transport Caspian Sea oil to 
the West. Moscow has already pressured Azerbaijan into ceding to 
Lukoil, the Russian oil company, 10 percent of Azerbaijan's share, but 
Moscow also demands that Azerbaijan's oil reach Europe through Russia's 
oil pipeline, as opposed to proposed alternative routes through Turkey, 
Iran, or Armenia. Even more problematic, Russia considers the legal 
status of the Caspian Sea to be in question, thus challenging 
Azerbaijan's right to sell its oil, and has also announced that no 
country along the Caspian can dispose of the region's natural resources 
without the consent of neighboring states. This, in effect, would give 
Russia a veto, which can be used to intensify pressure on Azerbaijan.
  Russia can also influence Azerbaijan in other ways--Moscow's position 
on the oil deal is closely connected to prospects for peace in the 
Nagorno-Karabakh conflict. While this dispute has roots that are deep 
and local, Russian involvement has prolonged and exacerbated the 
hostilities. If Moscow feels its economic and strategic interests are 
not satisfied, its ability to step up military operations and undermine 
the current ceasefire, CSCE arbitration and future peace talks is 
considerable. Certain Russian agencies could also try to destabilize 
Azerbaijan and place someone more pliable than Aliev in power.
  The new American economic stake in Azerbaijan translates into more 
resolute support for Azerbaijan's efforts to keep Russian troops out of 
the country and remain sovereign and independent. This means pushing 
even more energetically the CSCE peace plan for Nagorno-Karabakh, which 
envisions an international contingent of ceasefire monitors; Russia's 
plan, by contrast, would place Russian/CIS peacekeeping troops in 
Azerbaijan. With the oil deal now linking Azerbaijan and the United 
States, the struggle between these duelling peace plans may now become 
a more open and tense confrontation between Washington and Moscow.
  With respect to Azerbaijani domestic politics, the oil deal 
strengthens the position of President Aliev; even the opposition 
Popular Front fully supports both the agreement and Aliev's resistance 
to Russian pressure. It is therefore all the more peculiar that 
security forces have recently intensified attacks on opposition 
parties. On September 11, police attacked an opposition rally in Baku, 
where scores of people were injured and 77 arrested. In August, the 
Popular Front reported that secret government agents had confessed to 
an attempt to assassinate Abulfaz Elchibey, the Popular Front president 
ousted in June 1993. President Aliev is presumably clamping down on an 
opposition that shares his strategic goals in order to halt the 
political liberalization begun under the Popular Front regime and to 
ensure that Azerbaijan's political system and prospective wealth remain 
firmly in his hands.
  The United States can back President Aliev in resisting Russian 
pressure and consolidating mutually profitable economic ties without 
acquiescing in his intimidation and suppression of a peaceful political 
opposition. We must emphasize to him that no oil deal absolves him of 
his responsibility to observe CSCE commitments, and to implement his 
own stated agenda of promoting democratization in Azerbaijan.

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