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On Security

The Kremlin says it has caught a covert U.S. operative in possession of classified information. A look at Paul Whelan's background, however, suggests he is anything but a master spy.

The FSB was supposedly suspicious of Paul Whelan because he liked to drink with his Russian male friends instead of "pretty Russian girls."

<div>The holiday season was less than merry for one Paul Whelan. On Dec. 28, 2018, the U.S. citizen (and bearer of additional passports from Canada, Ireland and the United Kingdom) was arrested by officers of the Russian Federal Security Service (FSB) in his room at Moscow&#39;s Metropol Hotel. His family said the former Marine was in Moscow to play tour guide for the family of a fellow service member who was marrying a Russian woman, according to the Detroit Free Press. The Russians, naturally, have a different story. For them, Whelan is an intelligence officer who was using &quot;non-standard methods for intelligence gathering,&quot; as well as social media to target Russians with access to classified information. In fact, the FSB claimed they arrested Whelan shortly after a contact gave him a flash drive that contained a list of employees at a classified Russian government agency.</div><div>&nbsp;</div><div>The Western press was quick to tie his arrest to the high-profile case of Maria Butina, a Russian citizen who pleaded guilty in a U.S. court on Dec. 13 to being an unregistered foreign agent. But the more I learn about Whelan, the more I become convinced that he was not an intelligence officer. Moreover, I am also fairly certain that his arrest is not linked to Butina&#39;s guilty plea. That, however, doesn&#39;t mean that the Russians don&#39;t have their reasons for detaining him.</div>

Echoes of the Cold War

The Big Picture

<h3>An Odd Duck</h3><p>In the wake of Whelan&#39;s arrest, former CIA official John Sipher said the agency would never use <a href="/article/risk-undercover-operatives-digital-age">non-official cover officers (NOCs)</a>&nbsp;&mdash; operatives who have no official ties to the government that employs them and, importantly, no diplomatic immunity &mdash; in Russia. Now, it is understandable that Sipher and others would want to downplay the CIA&#39;s use of NOCs in dangerous places, but I remain somewhat skeptical of such claims &mdash; although I admittedly have no direct knowledge of CIA operations in Russia. Nevertheless, a simple fact remains: If the CIA or some other U.S. intelligence agency were planning to deploy a NOC in Russia, Whelan would patently not be fit for the job.</p><p>First, his current position &mdash; corporate security director for an auto parts manufacturer &mdash; is a poor choice for a NOC. In many cultures, the terms security and intelligence are interchangeable, meaning many do not view them as separate functions as in the United States. Corporate security personnel generally come from backgrounds in law enforcement, the military or both (like Whelan), which would make them subject to additional scrutiny and suspicion &mdash; certainly too much scrutiny for a NOC trying to operate comfortably, especially in the exceptionally hostile environment of Russia. Whelan reportedly made his first tourist trip to Russia while serving on active-duty tour in Iraq with the U.S. Marine Corps, something that likely raised the FSB&#39;s eyebrows. What&#39;s more, given the perilous state of Russia&#39;s auto industry, I am highly skeptical that Whelan was using his position at the car parts manufacturer as a means to engage in any sort of industrial espionage.</p><p>Second, Whelan received a court-martial in 2008 for larceny on 10 counts of passing bad checks, along with other charges, while serving on active duty in the Marines. According to news reports, he also had a history of not paying his rent while on active duty. The New York Times also published a court-martial document indicating that military authorities had reduced his rank from staff sergeant (E-6) to corporal (E-4) and discharged him from the military. The record also shows that Whelan was sentenced to a bad conduct discharge, only for a military judge to suspend the ruling.&nbsp;</p><p>An FSB officer told the Rosbalt news service that he believed the court-martial may have been cover to allow Whelan to serve as a NOC, but that explanation simply does not add up. A Marine staff sergeant who is experiencing financial problems, passing bad checks and failing to pay his rent is more of a counterintelligence problem &mdash; someone who could be recruited by a foreign power &mdash; than an ideal candidate for a highly secretive assignment as a NOC.&nbsp;</p><p>And according to Whelan&#39;s family, he had engaged in a competition with his sister to see how many passports each could acquire &mdash; extremely unusual behavior for an intelligence officer. While such officers do often use passports from third countries to travel, these additional documents are in the name of cover identities, not the officer&#39;s true name, as in Whelan&#39;s case. Moreover, intelligence agencies, rather than officers themselves, are responsible for obtaining these secondary passports. Indeed, possessing multiple passports all in the same name is terrible intelligence tradecraft. It would put any operative more in the league of mall cop Paul Blart than agent extraordinaire Jason Bourne.</p>

<p>Whelan&#39;s social media profile, especially on the popular Russian social media platform VKontakte, is also quite odd. Quite frankly, I believe it&#39;s simply far too amateurish to be the profile of a professional intelligence officer seeking to use social media to recruit sources, especially because he was using his true identity rather than a covert one.&nbsp;</p><p>I shared some of these observations with friends who are former CIA clandestine service officers, and we all agree that Whelan is simply too much of an odd duck to be a NOC. Nevertheless, the more I look at the case, I can certainly see why Whelan&#39;s profile and odd activities might have raised the suspicions of the FSB, which might have interpreted them as signs that he was an intelligence officer, particularly in the current environment.</p><h3>The Importance of Context</h3><p>I have long advised people about the <a href="/article/planning-safe-trip">need to develop a good understanding of their destination&#39;s environment</a> when planning a trip abroad. This pertains not only to criminal and terrorist trends but also to the intelligence environment, as well as how growing tensions between nation-states can increase scrutiny on travelers who come from ostensibly hostile countries.</p><p>Last March, I discussed how the Sergei Skripal assassination attempt and the U.S. operations against Wagner mercenaries in Syria were <a href="/article/russia-caution">increasing tensions between the West and Russia</a>. I specifically noted:</p><blockquote><p>But these incidents and their fallout will no doubt make Russia&#39;s Federal Security Service (FSB) and Foreign Intelligence Service even more aggressive toward Westerners living or traveling in Russia.</p></blockquote><p>Then, following the expulsion of Russian intelligence officers from the West and vice versa, I noted how <a href="/article/covert-effects-diplomatic-expulsions">the expulsions of intelligence officers operating under official cover</a> would increase the West&#39;s use of NOCs and Russian intelligence&#39;s use of &quot;illegals&quot; as both sides sought to pick up the operational slack left by the expelled officers and recruit new agents. I noted that:</p><blockquote><p>Civilians caught in the middle of this growing intelligence war can expect to be increasingly scrutinized, especially business travelers, tourists, nongovernmental organization workers and journalists. Security services in the West will place further emphasis on travelers from Russia, and those in Russia will do the same for Western travelers.</p></blockquote><p>I also stated the following:</p><blockquote><p>Individuals suspected of being intelligence officers will be heavily surveilled and their electronic communications will be monitored. The local counterintelligence agency may also interview suspects directly, in an overt attempt to either rattle them or place them on notice that they are under the microscope. Suspected intelligence officers or anyone else of interest to Russian intelligence can expect to be approached by people attempting to honey-trap them, no matter their gender and orientation. And Western visitors to Russia will likely have their hotel rooms wired for video and audio.</p></blockquote><p>This was the kind of morass that Whelan waded into. With his periodic journeys to Russia, strange affect, long-standing contact with Russian guys on social media and apparent uninterest in FSB honey traps &mdash; the security service told Rosblat that it was suspicious of him because he was more interested in drinking with Russian friends (male acquaintances he had met online) rather than in &quot;pretty Russian girls&quot; &mdash; it is no wonder why Whelan would have elicited the FSB&#39;s suspicions.&nbsp;</p>

<p>Throughout my travels, I have frequently encountered intelligence-officer wannabes: people who have watched too many Hollywood movies and believe that they can become self-styled &quot;spies.&quot; I don&#39;t know enough about Whelan to say whether this could apply to him, although his passport collection could be an indicator of this type of profile. If he did style himself as an intelligence officer, it could explain the flash drive with classified information &mdash; another example of sloppy tradecraft for a real intelligence officer. (although it must also be noted that the FSB could have easily planted such evidence to entrap or frame Whelan.) Nevertheless, it is not difficult to see how the FSB would take a dim view of a corporate security director who is a former cop and Marine, who travels to Russia for personal rather than company business, and who likes to hang out with Russian soldiers.</p><h3>Trade Bait?</h3><p>Many in the media have speculated that the FSB might have nabbed Whelan as trade bait for Butina. That was also my initial thought, but on further reflection, she is unlikely to be sentenced to much more than the time she has already served, meaning she could soon be on a plane home to Russia. Thus it makes little sense to frame and arrest an innocent man to exchange for her. Besides, Butina&#39;s guilty plea and decision to cooperate with prosecutors stands in stark contrast to past Russian intelligence officers, such as Rudolf Abel (true name Willie Fisher), who was extremely stoic &mdash; admitting nothing and denying everything &mdash; even when caught red-handed.&nbsp;&nbsp;</p><p>But while Whelan might emerge to be a hobbyist who styled himself as an intelligence officer, I can state with a fair degree of certainty that he is no NOC and that the FSB did not detain him as trade bait for Butina. That is not to say, however, that Whelan might not yet prove useful in a swap. With the Russians increasing their use of &quot;illegals&quot; in the wake of the West&#39;s expulsion of intelligence officers using diplomatic cover, Whelan &mdash; and perhaps other Americans caught in the wrong place at the wrong time &mdash; might come in handy if and when the United States gets its hands on a Russian illegal.</p>

<ul><li><em>Russia has arrested an American corporate security director, Paul Whelan, but he doesn&#39;t have the profile befitting a non-official cover intelligence officer, even though there are elements in his background that would bring him to the attention of the Kremlin&#39;s security services.&nbsp;</em></li><li><em>Russian authorities arrested Whelan not long after Russian citizen Maria Butina pleaded guilty in a U.S. court to being an unregistered foreign agent, but it doesn&#39;t appear that Moscow is seeking a prisoner swap.</em></li><li><em>The Kremlin could try to hold Whelan to exchange him in the future for any &quot;illegal&quot; Russian operative caught operating in the United States.</em></li></ul>

Highlights

United States

Russia

The holiday season was less than merry for one Paul Whelan. On Dec. 28, 2018, the U.S. citizen (and bearer of additional passports from Canada, Ireland and the United Kingdom) was arrested by officers of the Russian Federal Security Service (FSB) in his room at Moscow's Metropol Hotel. His family said the former Marine was in Moscow to play tour guide for the family of a fellow service member who was marrying a Russian woman, according to the Detroit Free Press. The Russians, naturally, have a different story. For them, Whelan is an intelligence officer who was using "non-standard methods for intelligence gathering," as well as social media to target Russians with access to classified information. In fact, the FSB claimed they arrested Whelan shortly after a contact gave him a flash drive that contained a list of employees at a classified Russian government agency.

The Western press was quick to

The Curious Story of an American Arrested by the Kremlin

A small explosion went off in the Russian city of St. Petersburg on April 13 outside of a library near a metro station, MKRU reported. 

<div>A small explosion went off in the Russian city of St. Petersburg on April 13 outside of a library near a metro station, MKRU reported. One teenager was injured when a bomb concealed in a package detonated. Rosbalt is reporting that the injured individual may in fact have been the attempted perpetrator. It is unclear whether this was an accident or a botched attack. On April 3, an <a class="connectedContentTrigger" href="/article/making-sense-attack-st-petersburg" data-nid="278578" type="Reflections" title="Making Sense of the Attack in St. Petersburg" data-timestamp="1491266323">attack on&nbsp;a train between the Sennaya Square and Technology Institute metro stations</a> killed 10 people and injured 50 others.</div>

Terrorism and Security

Russia: Small Explosion Reported In St. Petersburg

Assessments

The picture of this evolving scandal is unclear, most likely because the Kremlin wants it that way.

Making Sense of Russia's Cyber Treason Scandal

<div>In January, the Kremlin-linked media outlet Kommersant suggested that the heads of Russia&#39;s Information Security Center (TsIB) were under investigation and would soon leave their posts. The TsIB is a shadowy unit that manages computer security investigations for the Interior Ministry and the FSB. It is thought to be Russia&#39;s largest inspectorate when it comes to domestic and foreign cyber capabilities, including hacking. It oversees security matters related to credit theft, financial information, personal data, social networks and reportedly election data &mdash; or as some have claimed in the Russian media, &quot;election rigging.&quot; Beyond its investigative role, it is presumed that the TsIB is fully capable of planning and directing cyber operations. A week after the initial Kommersant report surfaced, Andrei Gerasimov, the longtime TsIB director, resigned.</div><div>&nbsp;</div><div><img alt="" src="https://www.stratfor.com/sites/default/files/styles/stratfor_large__s_/public/main/images/russia-cyber-hacking-scandal-who-is-who.png?itok=mOEb4YAo" style="width: 805px;" /></div><div>Not long after Gerasimov&#39;s resignation at the end of January, reports emerged from numerous Kremlin-linked media outlets in what appeared to be a coordinated flood of information and disinformation about the arrests of senior TsIB officers. One of the cyber unit&#39;s operational directors, Sergei Mikhailov, was arrested toward the end of last year along with his deputy, Dmitri Dokuchaev, and charged with treason. Also arrested around the same time was Ruslan Stoyanov, the chief investigator for Kaspersky Lab, which is the primary cybersecurity contractor for the TsIB.</div><div>&nbsp;</div><div>There is much conjecture, but Mikhailov was apparently forcibly removed from a meeting with fellow FSB officers &mdash; escorted out with a bag over his head, so the story goes &mdash; and arrested. This is thought to have taken place some time around Dec. 5. His deputy, a well-respected computer hacker recruited by the FSB, was reportedly last seen in November. Kaspersky Lab&#39;s Stoyanov was a career cybersecurity professional, previously working for the Indrik computer crime investigation firm and the Interior Ministry&#39;s computer crime unit. Novaya Gazeta, a Kremlin-linked media outlet, reported that two other unnamed FSB computer security officers were also detained.</div><h3>Theories, Accusations and Rumors</h3><p>Since the initial reports surfaced, Russian media have been flooded with conflicting theories about the arrests; about Mikhailov, Dokuchaev and Stoyanov; and about the accusations levied against them. Because the charges are treason, the case is considered &quot;classified&quot; by the state, meaning no official explanation or evidence will be released. An ultranationalist news network called Tsargrad TV reported that Mikhailov had tipped U.S. intelligence to the King Servers firm, which the FBI has accused of being the nexus of FSB hacking and intelligence operations in the United States. (It should be noted that Tsargrad TV tends toward sensationalism and has been used as a conduit for propaganda in the past.)&nbsp;The media outlet also claimed that the Russian officer&#39;s cooperation is what enabled the United States to <a class="connectedContentTrigger" href="/article/hacking-sanctions-are-more-symbol-threat" data-nid="275432" type="Reflections" title="Hacking Sanctions Are More a Symbol Than a Threat" data-timestamp="1483057447">publicly accuse Moscow of sponsoring election-related hacking with &quot;high confidence.&quot;</a></p><p>The stories implicating Mikhailov gained credence when Russian businessman Pavel Vrublevsky made&nbsp;similar accusations. He asserted that Mikhailov leaked details of Russian hacking capabilities to U.S. intelligence agencies. Vrublevsky, however, had previously been the target of hacking accusations leveled by Mikhailov and his team, so it is possible that he has a personal ax to grind. To further complicate matters, a business partner of Vrublevsky, Vladimir Fomenko, runs King Servers, which the United States shut down in the wake of the hacking scandal.</p><p>Novaya Gazeta&#39;s sources contradicted the claim that the accused officers colluded with foreign intelligence assets, saying there was no evidence they were involved in the U.S. case. Instead, the media outlet tied the arrests to prominent Russian hacking circle Shaltai Boltai (Humpty Dumpty), which is linked to a series of high-profile network intrusions, including ones targeting senior Russian officials. More recently, the group was implicated in leaking emails after the hack of an account run by presidential aide Vladislav Surkov that exposed his oversight of <a class="connectedContentTrigger" href="/article/new-year-russias-standoff-west" data-nid="270101" type="Assessments" title="A New Year for Russia's Standoff With the West" data-timestamp="1482761035">Russian activities in eastern Ukraine</a>.</p><p>In a 2015 interview, the leader of Shaltai Boltai, code-named &quot;Lewis,&quot; said his group was driven purely by money, not ideology. He said if a client was willing to pay, then Humpty Dumpty would take the job. Lewis also said he didn&#39;t know the identities of all the group&#39;s clients because many kept them guarded. Three days after the original story about the FSB arrests broke, Kremlin-linked media outlet Rosbalt reported that Shaltai Boltai&#39;s leader &mdash; whom they named as Vladimir Anikeev &mdash; had been arrested in October on charges of unlawful access to computer information. The report said Anikeev confessed to working with Mikhailov and Dokuchaev. On Feb. 1, two of Anikeev&#39;s associates, Alexander Filinov and Konstantin Terlijakov, were also charged with being members of Shaltai Boltai. A lawyer for Anikeev said the charges against his client were not connected with the FSB arrests or U.S. hacking accusations.</p><p>Over the past few weeks, Tsargrad TV has developed the story, releasing further details and making connections that are explosive if true. The television station claimed that the CIA had sponsored Anonymous International to engage Shaltai Boltai to work with Mikhailov and his team. The story appears unlikely, however, because the CIA has previously been a target of Anonymous International. The convoluted report claims the CIA wanted Mikhailov and his team to infiltrate one of Russia&#39;s largest financial institutions, Sberbank, to collect data on Russians that the CIA could use to manipulate public opinion ahead of the upcoming Russian national elections.</p><h3>More Questions Than Answers</h3><p>As more details emerge, the true picture of what is happening grows murkier. It is evident that a campaign to confuse the situation is in effect, with conflicting news stories seeding the confusion. Most new information comes from Kremlin-related media outlets, meaning that influential figures in the Russian government are likely trying to redirect the story. It remains unclear why the initial details of the arrests were even made public. The accusation that such prominent FSB members could be linked to the U.S. hacking scandal would be tantamount to an admission of guilt after&nbsp;<a class="connectedContentTrigger" href="/article/tempest-washington-builds-moscow-hunkers-down" data-nid="275438" type="Reflections" title="As the Tempest in Washington Builds, Moscow Hunkers Down" data-timestamp="1484186853">months of continual denials</a>&nbsp;from Moscow that Russia had any part in the scandal.</p><div>The connection being made between the FSB officers and Shaltai Boltai is questionable. Russian investigative journalist and cybersecurity expert Andrei Soldatov said the effort to tie Mikhailov to Shaltai Boltai was more likely an attempt at a hasty cover-up. Soldatov told the British newspaper The Guardian that Mikhailov and Stoyanov were &quot;real experts in one thing, the Russian digital underground, not the kind of stuff that Shaltai Boltai leaked.&quot; The narrative linking Shaltai Boltai to the FSB officers came just three days after the initial stories suggesting the FSB officers were the sources of leaks to U.S. intelligence.</div><div>&nbsp;</div><div>The most puzzling aspect of this curious episode is how and why the Kremlin allowed this story and the speculation around it to be featured in the Russian media for weeks. The Kremlin traditionally likes to exercise control over its appendages, particularly the security services. Moreover, the Russian administration&#39;s fears of reprisal hacks have increased, not only in response to accusations by the United States and other governments but also as its own election cycle approaches. So perhaps the real story is about the magnitude of the struggle taking place inside the Kremlin that has allowed such a noisy and messy spillover to extrude beyond its dense walls.</div>

<p>The scandal surrounding a shadowy Russian computer intelligence unit has captivated the Russian public over the past few months. The story of a series of high-profile arrests continues to evolve in scope and complexity, implicating members of the Federal Security Service (FSB) and prominent hacking groups. Now, possible connections have emerged to the alleged hacking campaign targeting the United States during the presidential election. Mystery remains over the exact purpose of the crackdown on the cyber unit and why it is happening now, leading to intense speculation in the Russian media. The guarded nature of Russian organs of state means that the story playing out in the public eye is indicative of more dangerous struggles taking place deep inside the Kremlin.</p>

Summary

Cyber

Russia's Internal Struggle

The scandal surrounding a shadowy Russian computer intelligence unit has captivated the Russian public over the past few months. The story of a series of high-profile arrests continues to evolve in scope and complexity, implicating members of the Federal Security Service (FSB) and prominent hacking groups. Now, possible connections have emerged to the alleged hacking campaign targeting the United States during the presidential election. Mystery remains over the exact purpose of the crackdown on the cyber unit and why it is happening now, leading to intense speculation in the Russian media. The guarded nature of Russian organs of state means that the story playing out in the public eye is indicative of more dangerous struggles taking place deep inside the Kremlin.

Russia will begin grain interventions to regulate the balance of grain on the market, Russian Prime Minister Dmitri Medvedev said Oct. 4, Rosbalt reported. 

<p>Russia will begin grain interventions to regulate the balance of grain on the market, Russian Prime Minister Dmitri Medvedev said Oct. 4, Rosbalt reported. <a href="/article/former-soviet-wheat-producers-face-shortfalls">Bad weather</a> affected grain production in Russia, Kazakhstan and Ukraine.</p>

Economics and Finance

Russia: Government To Begin Grain Interventions - Prime Minister

<p>Russian Foreign Minister Sergei Lavrov will visit Minsk on Aug. 14-15, Rosbalt reported Aug. 13. Among other leaders, Lavrov is expected to meet with Belarusian President Aleksandr Lukashenko.</p>

Politics

Belarus

Belarus: Russian Foreign Minister To Visit

<p>A sniper killed four children, two men and a woman July 26 in the town of Khorug, in recently restive eastern Tajikistan, Rosbalt reported.</p>

Tajikistan

Tajikistan: Sniper Kills 7 In Khorug

The militant Kurdistan Workers' Party (PKK) claims it will attack a portion of the newly inaugurated Baku-Tbilisi-Ceyhan oil pipeline, Russian news agency Rosbalt reported June 9, citing a PKK statement. The pipeline runs 667 miles across land in southeastern Turkey that the PKK claims is part of Turkish Kurdistan. The threat cannot come as a surprise to pipeline investors and other interested parties who always have viewed Turkey as one of the line's riskiest sections. An attack, however, would do much more than interrupt the flow of oil.  The BTC line &mdash; designed to carry Caspian Sea energy resources to Western markets by linking to the Mediterranean &mdash; is intended to establish Western political influence over those reserves and the South Caucasus and Caspian Sea regions. At the same time, it is intended to politically and economically isolate traditional regional powers Russia and Iran. Despite delays and budget overages, the 1,074-mile line was finally inaugurated May 25 in Baku, Azerbaijan.  <div align=center><img src="http://web.stratfor.com/images/middleeast/BTC_Pipeline_Route.jpg"></div> The trouble with BTC is that it must traverse a politically volatile region in order to reach its final destination at Turkey's Mediterranean port of Ceyhan. Aware of this, builders designed the route to minimize risks to the pipeline's physical integrity. Southeast Turkey &mdash; where Ankara has been involved in a longstanding conflict with the PKK over the latter's plan to include the region in an independent Kurdistan &mdash; was one area of significant concern. The PKK, however, called a cease-fire in 1998 following the arrest of its leader Abdullah Ocalan, allaying the fears of the parties involved in BTC.  The war in Iraq, however, resuscitated Kurdish separatism, and in mid-2004 the PKK called an end to the cease-fire. It has since used northern Iraq as a base for attacks in southeastern Turkey, where clashes between Turkish forces and Kurdish rebels are on the rise.   The PKK has never attacked the Kirkuk-Ceyhan pipeline connecting northern Iraq to the Mediterranean, even though the line runs through the heart of Kurdish territory in Turkey. With the onset of war in Iraq, however, the PKK has had the opportunity to learn from the Iraqi insurgency and has witnessed the impact that guerrilla attacks on oil pipelines can have. Attacking BTC would draw immediate international attention to the PKK and its cause &mdash; especially given the West's interest in the security of the line and concerns over tight supplies in world oil markets.   Azerbaijan and Georgia &mdash; which have bet their economic futures on energy ties with the West &mdash; would suffer significantly if the line's functions were severely hindered. Although Turkey would not feel a strong economic pinch from the loss of the pipeline's revenues, an attack on the pipeline would bring Ankara severe international embarrassment.   Western governments and energy firms have trusted the BTC countries with huge investments in political and financial capital &mdash; $4 billion to construct the pipeline and another $20 billion in upstream investments. If Turkey should turn out to be the weak link in the chain, all of these actors would come down hard on Ankara.  Eager to present itself as a nation on a fast developmental track as it seeks to join the European Union, however, Turkey would not wait for international rebukes before reacting to PKK-generated humiliation &mdash; it would strike back swiftly and severely. In fact, Turkey's response likely would strain relations with EU members and leave Washington in the awkward position of choosing between condemning Ankara's use of force and lauding efforts to secure the BTC.   With Iraq still highly unstable, renewed conflict between Turkey and the PKK in southeastern Turkey could spread to northern Iraq, or attract Iraqi Kurds into Turkey. This &mdash; or even a broader conflict &mdash; might be precisely what the PKK wants. Should the PKK make good on its threat, however, the shock waves will travel far indeed.

The militant Kurdistan Workers' Party has announced plans to initiate attacks on a portion of the newly inaugurated Baku-Tbilisi-Ceyhan oil pipeline. Although the threat is no surprise, a real attack would have considerable consequences for the entire region.

Turkey: The BTC Pipeline and the Re-Emergence of an Old Threat

Russia's Gazprom and Germany's Wintershall are planning a joint enterprise to tap the Achimovsk reservoirs of the Urengoi gas field in Siberia, reported Rosbalt on June 25. An estimated 118 million cubic meters of gas and 29 million tons of condensate will be produced annually. Western countries will receive 36 million cubic meters of gas and 9 million tons of condensate. The remaining stocks will be used domestically.

Russian-German Venture To Tap Achimovsk Reservoirs

Gazprom's executive board has approved the creation of a joint company with LUKoil called TsentrKaspneftegaz, Rosbalt News reports, citing Gazprom officials. The new company, which will be registered in Moscow, is expected to develop the Central oil and gas field in the Caspian, located in the Russian sector of the Caspian Sea, about 150 km to the east of Makhachkala. The agreement is part of a deal that was signed in May 2002 by Russia and Kazakhstan to delimit the northern part of the Caspian Sea. Eventually, Russia and Kazakhstan will appoint companies to set up ventures, in which both countries will have a 50 percent stake. LUKoil currently owns the license for the Central oil and gas field, which has oil reserves that total 521.1 million tons and gas reserves that total 91.7 billion cubic meters.

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