POWER PRIORITIES FEED FSU JITTERS

Recent events in the former Soviet Union have been resoundingly inconclusive. A world-class muddle marches on.

Chevron Corp. has responded to the FSU quagmire by announcing that it will invest only $50 million this year in Kazakhstan's Tengiz field instead of the $500 million it earlier envisioned for construction and field development. There can be no clearer statement about the trend in value of FSU investments.

PROGRESS STALLS

Progress at Tengiz has stalled over construction of a pipeline to Russia's Black Sea port at Novorossiisk. Without the outlet and with Russia resisting greater utilization of pipelines through its territory, Tengiz production is destined to remain at about 65,000 b/d. That's one fourth of what Chevron hoped eventually to export from the field.

Russia has played more than a transit country's role in pipeline planning, and its demands have hurt progress. Its concerns are not just revenues but influence in what it calls the near abroad-its old empire. The intensity of those concerns became evident in Russia's routing of the breakaway government in Chechnya. The Center for Strategic and International Studies, Washington, D.C., recently noted that Russia was less concerned about Chechnya's oil production, which is negligible, than it was about its location-on the route of a pipeline between Baku and Novorossiisk and close enough to be menacing to the proposed line from Tengiz. "Chechnya's value is not oil," CSIS said, "but territory."

The Tengiz pipeline isn't the only oil project complicated by Russia's geopolitical ambitions. A pipeline proposal crucial to development of Azerbaijan's rich oil reserves has stalled partly because of Russian insistence that the route go through its territory instead of Turkey.

By all accounts, this urge to dominate permeates the Russian bureaucracy, in which officials often seem more concerned about individual prerogatives than about progress of projects under their control. The urge is certainly manifest in Russia's approach to taxation, which amounts to an endless test of non-Russian companies' tolerance for official fleecing.

None of this will change until economics becomes more important than power in the Kremlin. The signs are not good. In his state of the nation speech Feb. 16, Russian Pres. Boris Yeltsin mostly said what he thought constituencies crucial to his political standing wanted to hear. He asserted power but exercised none on behalf of essential change. His main accomplishment was assuring observers that he could remain in control of his faculties for the duration of a speech. Russia remains adrift.

NEW PRIORITIES

Russia needs something more. It needs a leader, Yeltsin or someone else, able to restore the sense of hope that the Russian people lost during 70 years of Communism. It needs prosperity, not power, which requires a change of government priorities. What remains of the noncriminal Russian economy needs capital from abroad, which will not arrive in sufficient amounts until there is much more stability than exists now. Yet stability remains out of the question as long as the Russian government continues to pursue international ambitions it has no way of fulfilling without resort to brute, largely undisciplined force.

The current muddle looks increasingly dangerous. Unless Russia changes in fundamental ways and does so very soon, the country's bureaucrats should expect other announcements like Chevron's. A Russia in which few outsiders choose to invest is a prospect that should worry world leaders eve here.