BUSH, Exxon-Mobil, Pennziol, British Petroleum and Unocol

Oil, Diplomacy and Bush's Inner Circle

The tiny mountian enclave of Nagorno-Karabakh would seem to be an unlikely focus for the Bush administration's first foreign policy peace initiative, but the Untited States has vital interests in the region's oil reserves -- and high-ranking members of the Bush administration have strong financial ties to the area.

The Caspian region is estimated to contain one-tenth of the world's oil reserves -- five times as much as those found in the United States.

The U.S. oil industry, which has strong ties to the Bush administration, is interested in building a $2.7 billion pipline that would conect Baku, the capital of Azwebaijan, with the Turkish port of Ceyhan on the Mediterranean. The pipeline, which would pass through Tbilisi, Georgia, just north of the troubled area, would offer the only export avenue for Caspian oil that would skirt Russia or Iran.

In addition, several senior administration forgeign policy officials have worked for companies with major interests in Azerbaijan and significant stakes in the success of the pipline. Until last year, Vice President Dick Cheney was cheif executive of Halliburton Co., an oil services companywith operations in Azerbaijan that is a finalist for engineering bids on the Turkish portion of teh Baku-Ceyhan pipeline.

National Security Adviser Condoleezza Rice stepped down last January from the board of directors of Chevron Corp., which owns a large stake in an Azerbaijan offshore oil feild and has expressed interest in helping to build the pipeline.

In addition, Bush family advisor James A. Baker III sits on the U.S. -Azerbaijan Chamber of Commerce's advisory council. Baker also heads a U.S. law firm, Baker Botts, that represents a consortim of corportations exploring and drilling in Azerbaijan, including Exxon-Mobil, Pennziol, BritishPetroleum and Unocol.

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