By Mamuka Tsereteli (9/11/2002 issue of the CACI Analyst)

BACKGROUND: In late August the Georgian Government had a series of negotiations with Itera International Energy LLC on privatization of the Tbilisi natural gas distribution company Tbilgazi. Those negotiations were conducted on the backdrop of the fact that Georgian state owned entities owe to Itera $90 million for the natural gas delivered to Tbilisi and the Chemical plant in Rustavi in recent years (the official Georgian number mentioned in relation to this deal is $32 million). As a result of negotiations, the Georgian government signed a memorandum of understanding, which envisages creation of a joint venture between the Georgian government and Itera, with the latter having 51 percent and control over the management of the company.

By Svante E. Cornell (10/9/2002 issue of the CACI Analyst)

BACKGROUND: The conflict in Chechnya has been deadlocked for almost two years, with a low-intensity conflict going on between Russian Federal troops and Chechen irregular formations. As Russian and foreign journalists have reported in graphic detail, the Chechen civilian population presently bear the brunt of the war. The Russian military is bogged down in Chechnya, affecting its internal discipline and morale negatively in a way similar to what occurred during the Soviet war in Afghanistan in the 1980s.

By Rafis Abazov (10/9/2002 issue of the CACI Analyst)

BACKGROUND: Oil was first discovered in Kyrgyzstan in the early 1900s and by 1913 the first oil-field in the Maili-Suu region was producing 3,000 tons of oil annually for industrial consumption. Oil extraction gradually increased and peaked in 1960 when a total of 464,000 tons were extracted. But in the 1970s and 1980s, Kyrgyzstan considerably reduced oil extraction, switching to imported petroleum despite the fact that the consumption of oil nearly tripled in the 1970s and nearly doubled in the 1980s.