Introduction Dieter Dettke Energy resources in the Caspian Sea area are bound to attract the attention of many powers and players. The U.S., Europe, Russia, Turkey, Iran as well as China, India, Pakistan and Japan will have an interest in economic and political developments in the area and the focus of their attention will be on the future market dynamics of energy supplies. The region has to offer a substantial share of world energy resources, estimated at up to almost 10% of current world oil reserves or 3 to 4% of total Western energy supplies. Additional new oil reserves are being probed in Western Kazakhstan. However, the interplay of the interests of Caspian Sea powers and external pressures is extremely delicate. Not only does the old – and new – rivalry of the Cold War powers persist, the European Union is also attempting to establish itself as a new entity in the region with a new quality of relationships based on partnership as well as more traditional economic, political and cultural ties. Above all, the war in Chechnya threatens to destabilize the entire region. At the OSCE summit meeting in Istanbul in November 1999 an agreement was reached between Turkey and Caspian Sea powers for the transportation of oil from Baku, Azerbaijan to Ceyhan, Turkey. In addition to that, a pipeline will be built to transport gas from Turkmenistan to Turkey through the Caspian Sea. In the past, Turkey received most of its gas from Russia. The Istanbul Declaration, signed by the presidents of Turkey, Azerbaijan and Georgia as well as the presidents of Turkmenistan and Kazakhstan has the strong backing of the United States in spite of continuing doubts over the commercial viability of the proposed oil pipeline route. The costs of the Baku­Ceyhan pipeline are estimated at 2.7 billion dollars at the low end and as much as 3.7 billion dollars at the high end. To expand the capacity of existing pipelines such as the one from Baku to the Georgian port of Supsa would be much cheaper. Russia – for obvious reasons – would prefer to expand the old Soviet pipeline from Baku to the port of Novorossiysk. However, these three oil routes do not have to be mutually exclusive. Multiple pipelines could be the best solution and might indeed be the final outcome. Even less costly and potentially the most economical way of getting Caspian oil to ii