Key West Talks
For the Resolution of the Karabakh Conflict
Bush Seeks to Help End Warfare in Oil-Rich Caspian
(Adds meetings outcome in first, fifth-seventh paragraphs.)
Washington, April 9 (Bloomberg) - President George W. Bush told the leaders of Azerbaijan and Armenia the U.S. will do all it can to help them end their border conflict, two senior Bush administration officials said.
For the Bush administration, which has signaled a reluctance to engage in hands-on negotiations in the Middle East, the Koreas and elsewhere, today's talks capped a weeklong effort personally begun by Secretary of State Colin Powell to bring peace to the central Asian territory of Nagorno-Karabakh.
Azerbaijan, Armenia and the surrounding area contain the potential for as much as 200 billion barrels of oil that may be worth more than $4 trillion, and natural gas reserves larger than those in all of North America. Chevron Corp. is leading a proposed $2.5 billion Azerbaijan-to-Turkey pipeline project.
"The U.S. realizes today that more than ever, the region of the south Caucuses, the Caspian region, is of great importance to the strategic interests of the United States," said Elin Suleymanov, a spokesman for the Azerbaijan embassy in Washington.
In separate meetings with President Heydar Aliyev of Azerbaijan and Robert Kocharian of Armenia, Bush praised their efforts to resolve their differences, the two U.S. officials told a reporters' briefing.
The two sides have agreed to meet again in June in Switzerland to make further progress toward an accord, said the Bush officials, who participated in today's discussions. The peace process dominated the meetings, with oil and energy ancillary issues, the two aides said.
"There are a lot of energy resources in the region, but these meetings are going to be very short" and will focus on peace talks, another aide, National Security Council spokeswoman Mary Ellen Countryman, said earlier today.
The proposed 1,000-mile pipeline would run from the Azerbaijani capital Baku through the Georgian capital Tbilisi to the Mediterranean port of Ceyhan in Turkey, a North Atlantic Treaty Organization ally of the U.S.
Several top Bush administration officials have ties to major petroleum companies, including those with interests in the Caspian region. That, along with creating a model for resolving other ethnic-based land disputes in the former Soviet Union, may be driving U.S. involvement in the Armenia-Azerbaijan dispute, participants and analysts said.
"I would think oil was, in part, behind it all,"said Robert Ebel, director of energy and national security affairs at the Center for Strategic and International Studies, a Washington, D.C., think tank.
"This is not a problem area of the world that we should shy away from," Willard Workman, vice president for international affairs at the U.S. Chamber of Commerce, said of the Nagorno-Karabakh conflict. "We think that we ought to at least devote as much as an effort there as we did the Middle East.''
Oil industry ties permeate the administration. Bush followed his father into the Texas oil business years before following him into the White House. Vice President Dick Cheney previously served as chairman and chief executive of Halliburton Co., the world's largest oilfield services company.
Halliburton has operations in Azerbaijan and has bid for work on the pipeline to Turkey. The U.S. government has worked to convince U.S. companies to support the pipeline, wanting a transportation route from the Caspian oil fields that bypasses both Russia and Iran.
Other top Bush officials and advisers with oil industry connections include national security adviser Condoleezza Rice, who was on Chevron's board of directors from 1991 until January of this year, and has a company oil tanker named after her.
The law firm of former Secretary of State James Baker, a Bush family adviser, represented several oil companies with interests in Azerbaijan, among them Exxon-Mobil Corp. Brent Scowcroft, a Rice adviser who was national security adviser in the administration of Bush's father, has industry connections that include sitting on the boards of Pennzoil-Quaker State Co. and Enron Global Power & Pipelines, a unit of Enron Corp. Deputy Secretary of State Richard Armitage is a former co-chairman of the U.S.-Azerbaijan Chamber of Commerce.
The fighting in Nagorno-Karabakh, between the Caucasus and the Karabakh mountain ranges, stems from efforts by an ethnic Armenian majority to secede from Muslim-majority Azerbaijan in 1988. The initial warfare cost thousands of lives and left 1 million homeless. The sides reached a general cease-fire seven years ago, and now about 200 people die each year in continued skirmishes.
U.S. officials wouldn't describe the talks in detail, although Suleymanov said a settlement likely will involve conditions in which Nagorno-Karabakh remains part of Azerbaijan with political autonomy for the ethnic Armenian majority.
Both countries have scaled back the level of fighting and appear ready for a settlement, in particular because they recognize the economic benefits it would bring, said Ariel Cohen, a specialist on Russia and the Caucasus at the Heritage Foundation, a Washington research group.
Azerbaijan also faces a general cut-off in U.S. foreign aid. Aliyev is about 80 years old and wants the legacy of peace agreement, while the Bush administration sees a potential early foreign policy success, Cohen said.
"This is an area that probably some progress can be achieved and I think we can score some points,'' Cohen said.
Powell's talks between Aliyev and Kocharian were held last week at U.S. government-owned property in Key West, Florida, once used by President Harry Truman.
"We're very impressed and very grateful that the U.S. administration has made this one of its priorities,'' Suleymanov said. "That's important, that's encouraging.''