NAGORNO-KARABAKH HAUNTS ENERGY SECTOR

United Press International
July 15 2009

MOSCOW, July 15 (UPI) — Russian interests and rancor between Ankara
and Baku over the Nagorno-Karabakh region may undercut progress on
the Nabucco pipeline for Europe, analysts say.

A move by Ankara to open the Turkish border with Armenia has
angered energy partners for the $10.3 billion Nabucco gas pipeline
in Azerbaijan.

Armenia and Azerbaijan fought a bitter military battle over
Nagorno-Karabakh in the early 1990s, and the regional fallout from
disputes over the territory remains tense despite a 1994 cease-fire.

The Nabucco project for Europe reached a milestone Monday with an
intergovernmental agreement among its partners, but the project faces
setbacks in terms of financing and gas commitments.

Turkey, meanwhile, is keen on developing the economy in the region
along the border with Armenia and sees opportunity in the Armenia
energy sector. But Russian efforts to expand its energy hold in the
region may spill over to curtail European efforts at energy security,
writes Alexandros Petersen in the Moscow Times.

Petersen, associate director of the Eurasia Energy Center at the
Atlantic Council in Washington, writes that a push by Moscow to
establish a footprint in Armenia could expand its influence in the
regional energy sector.

He says that while Western allies have largely ignored Armenia due to
the Nagorno-Karabakh, a Russian push into the region and simmering
tensions between Baku and Ankara could have a significant impact on
regional energy security issues, including Nabucco.