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Weekly Geopolitical Summary: Russian Oil Firms to Start Exploring in Bosnia

In this weeks issue:

- Foreign Investment for Disputed Nagorno-Karabakh?
- Russian, Serbian Oil Firms to Start Exploring in Northern Bosnia
- Suicide Bomber Kills 31 at Pakistani Army Base in Punjab
- A Step Forward for Indian Air Force Garud Special Ops 
- Uzbekistan Hits Up Washington for More Military Transport Money
- Two Security Officials Arrested Over Killings of Protesters in Albania


Foreign Investment for Disputed Nagorno-Karabakh?

Austrian, Czech and Slovak businessmen are apparently showing interest in investment opportunities in Azerbaijan’s Armenian-occupied breakaway territory of Nagorno-Karabakh, according to local news reports. A group of businessmen from the countries visited the Nagorno-Karabakh capital, Stepanakert, on 4 February to discuss possible investment opportunities in the energy, construction and agricultural sectors, and are reportedly considering $15 million in pilot projects in the disputed territory. Armenia and Azerbaijan fought a war from 1991-94 for control of the territory, with Armenian forces capturing nearly all the entire region as well as large swaths of territory adjoining Karabakh.

Analytical Note: While the Armenian leaders of Nagorno-Karabakh are indeed excited about the prospect, foreign investments in these sectors will lend legitimacy to Nagorno-Karabakh’s independence ambitions and are sure to cause problems with Azerbaijan, which views foreign investment in the disputed territory as illegal. Despite the potential for disaster, the group of businessmen so far seemed unconcerned about the political implications, and are expressing particular interest in investing in the energy sector, reportedly with plan to build hydroelectric stations that would purportedly allow Nagorno-Karabakh to stop importing electricity from Armenia by 2012 and then to export electricity in the following years. 

Russian, Serbian Oil Firms to Start Exploring in Northern Bosnia

Russia’s Naftegazinkor and Serbia’s NIS oil first have set up a joint venture to begin later this year exploring oil fields in northern Bosnia, on the territory of Bosnia’s Serb-dominated entity of Republika Srpska. The joint venture, Jadran Naftagas, will see the two companies invest between $13 million and $47 million in the first phase of the exploration project, according to Reuters. The joint venture will apply for drilling concessions and could invest up to $315 million if the initial exploration proves promising. The joint venture estimates that there could be around 12 million tons of oil reserves in the territory.

Analytical Note: The joint venture can be largely considered a Russian operation, as Serbia’s NIS is majority owned by Russia’s Gazprom Neft, which holds a 66% stake in the Serbian company. The joint venture is focusing on northern Bosnia on the territory of the Bosnian Serb-dominated entity of Republika Srpska, which is so far home to the country’s only known oil reserves. This is a cause for unease among the leaders of the country’s other entity, the Bosniak- and Bosnian Croat-dominated Federation, although the joint venture may expand into the Federation in its exploration. Bosnia has in effect been without a state or Federation government since the October general elections, after which it has been unable to bring its quarrelling parties together to form a new coalition government. The Bosnian Serb leadership of Republika Srpska is unwilling to allow the state to take over key powers that would unite the country, and revenues from oil and from a planned Russian pipeline running through the Bosnian Serb territory will provide further contentions between the state and Republika Srpska in terms of dividing up revenues and ensuring that the country as a whole benefits from the deal. Certainly, Republika Srpska President Milorad Dodik stands to benefit from the deal, and it is feared that the entity’s oil reserves will give it more cards to play in terms of secessionist rhetoric.

Suicide Bomber Kills 31 at Pakistani Army Base in Punjab

In an apparent revenge attack for US drone strikes on Pakistani territory, a suicide bomber blew himself up in a crowd of army recruits parading on the grounds of the Punjab Regiment Centre in Mardan on 10 February, killing some 31 people and wounding over 40 others, according to Pakistani media reports citing military officials and police. Officials said the suicide bomber was most likely a teenager, dressed in a school uniform. The Taliban claimed responsibility for the attack, threatening more catastrophic attacks in the coming days in revenge for US drone strikes and local military offensives in Pakistan’s tribal areas. 

Analytical Note: That the suicide attack took place within the grounds of the military facility demonstrates a severe lack of security, especially in light of the fact that this is not an unprecedented attack. In 2006, an attack at the same facility claimed the lives of 35 soldiers. US drone strikes on Pakistani territory have been highly controversial among Pakistanis and have undoubtedly lent more legitimacy to the Taliban operating on Pakistani territory and helped to boost recruits among the marginalized tribal peoples. For the most part, these drone strikes have been conducted with Pakistani acquiescence, with the exception of an attack last year that was conducted without first coordinating with Pakistan officials. There is a balancing act in force that sees support for the Taliban increase at the time of a US drone strike, and then drop again when the Taliban seeks revenge and claims the lives of Pakistanis. The US drone strikes have been largely ineffective thus far, even though they have netted some fairly high-ranking Taliban figures, who are immediately replaced.

A Step Forward for Indian Air Force Garud Special Ops 

The Indian Air Force on 5 February inducted the first of six Lockheed Martin C-130J-30 Super Hercules transport aircraft, to be based at Hindon Air Force Station, in the Ghaziabad region of Uttar Pradesh. The initial force of six C-130J-30s - IAC codenamed Veiled Vipers - were being operated by 77 Squadron, part of Western Air Command (WAC), based in Delhi.

Hindon was selected in November 2008 to become one of nine IAF air bases in WAC - and one of 39 nationally - to be extensively modernized. Hindon is the closest IAF base to Delhi, 40km to the south-east. The Rolls Royce AE2100DR turboprop-equipped aircraft were customized for Indian special forces use, and include aerial refueling capability. They were ordered in 2008 under a $965-million contract, of which some $285-million was to be offset by contracts placed by the US in India.

The Indian Air Force Garud Commando Force - the IAF Special Forces unit - which was conceived in 2002 to be a 2,000-man force, was, by early 2011, being integrated to operate with 77 Sqn. The Garud force had, by 2011, 15 Flights (infantry battalion equivalents), each of some 1,500 troops, deployed to a number of IAF stations. (From GIS/Defense & Foreign Affairs)

Uzbekistan Hits Up Washington for More Military Transport Money

After visiting Brussels earlier in late January and early February, to meet with NATO and EU officials, Uzbek President Islam Karimov has announced that Tashkent will raise transit fees for military supplies along the Northern Distribution Network (NDN) on their way to troops in Afghanistan. It is unclear exactly how much Tashkent is planning to increase the tariff, and so far NATO officials have not revealed any details, though a Washington-based company, FMN Logistics, said on 3 February that the tariff increase would be “significant”. Uzbekistan is a key point along the NDN, with supplies passing through the country’s Termez-Hairaton border crossing with Afghanistan.

Analytical Note: The timing of the announcement, on the heels of a very disappointing visit to Brussels for Karimov, is no coincidence. The trip got off to a bad start when those Karimov was intending to meet with denied having invited him in the first place. This is a major blow to the ego of the typical Central Asia leader, who felt he had no recourse but to strike back to save face. Washington is playing it cool, saying the tariff increase is just business as usual and is not likely to have a major effect on supplies to troops in Afghanistan.Indeed, tariffs have been increasingly regularly over recent years, and this is the third time Uzbekistan has increased the transit tariff since 2010.

The tariff hike also comes at a time when the US Department of Defense’s Office of the Inspector General (OIG) - responsible for investigating fraud, waste and mismanagement in the US military - is in the middle of an audit of US fuel supply contracts and operations related to the NDN. Due to the high level of corruption particularly in Central Asian states, the OIG is looking into informal payments made to officials in order to ensure continued supplies and transport. The investigation was in part prompted by the scandal over fuel contracting practices at the US’ Manas air base in Kyrgyzstan.


Two Security Officials Arrested Over Killings of Protesters in Albania

There are indications that the ongoing tensions in Albania that in late January saw security forces killed four protesters outside the Prime Minister’s Office are easing, with the arrest of two security officials believed to have been involved in the bloodshed. The protesters, who are calling for early elections and the ouster of Prime Minister Sali Berisha’s government, have been engaged in gradually intensifying demonstrations since the country’s disputed 2009 elections, which Berisha and his ruling party won by a narrow margin.

The situated climaxed on 21 January, when protesters armed with sticks and rocks attempted to enter the Prime Minister’s Office before National Guardsmen opened fire on them, killing four. The General Prosecutor’s Office, after a preliminary investigation, had ordered the arrest of six National Guardsmen - an order the police initially refused to carry out, apparently on the orders of Berisha. The situation threatened to further intensify when it became clear that neither Berisha nor the protesters - many of them led by Socialist party leader Edi Rama - would back down.

On 9 February, prosecutors said six officers had turned themselves in the day before for questioning, after which five were released, while one commander was retained in custody along with a lower-ranking official who was not among the six originally ordered arrested.

Analytical Note: The police move to arrest two National Guardsmen involved in the shootings is a sign that, in the least, Berisha is concerned about his tentative position. However, this does not indicate an end to the tensions. The opposition will not be appeased by this move entirely, and the 2009 elections are clearly still an issue. It is not in Berisha’s nature to back down, and this is likely just a ploy to buy time to come up with a new strategy.

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