[A-List] Russian imperialism: Caspian Sea

["Michael Keaney" <michael.keaney@xxxxxx>]

Russia navigates another Caspian rapid
By Hooman Peimani
Asia Times, October 8 2002

On September 25, while the international community's attention was largely
focused on the possibility of an American attack on Iraq, the Russian
government quietly concluded an important agreement with southern neighbor
Azerbaijan on the strategically important issue of dividing the oil/gas-rich
Caspian Sea.

Russian President Vladimir Putin and Azeri President Heydar Aliyev signed an
agreement to divide their countries' share of the Caspian Sea. The
agreement, like the one that Russia signed with Kazakhstan in May, seeks to
settle the territorial claims to the Caspian Sea among the five littoral
states not through a multilateral agreement involving the collective efforts
of the five countries, but through bilateral agreements between each of the
claimants.

While Russia's agreements with Azerbaijan and Kazakhstan could mute
conflicts among these three northern Caspian neighbors for a while, the
unresolved territorial claims between and among the southern Caspian states
of Iran, Azerbaijan and Turkmenistan could instigate major conflicts,
including military ones, as became evident in their 2001 escalation of
conflicts.

Finding a legal regime for dividing the Caspian Sea has been a source of
conflict among its five littoral countries since the Soviet Union's breakup
in 1991. Until 1999, Iran and Russia opposed its division into national
zones, with exclusive rights to all its resources, in favor of dividing it
based on an agreement among all the littoral states for its common use, as
provided by two Iranian-Soviet agreements of 1921 and 1940. They based their
argument on the fact that international agreements on dividing open seas
into exclusive national zones would not apply to the Caspian Sea, the
world's largest landlocked lake. Eager to put their hands on its offshore
oil and gas fields for their deep financial problems, the other three states
were insisting on its division into such zones.

Russia gave up this policy in 1999 when it found large offshore oil reserves
close to its Caspian coastline. While Iran has insisted on a non-development
policy of offshore energy resources in the absence of a legal regime, the
other Caspian states have taken steps to develop those oilfields which they
consider to fall within their territorial waters.

Unsurprisingly, this policy has created conflict between and among the
littoral states as there are many double and triple claims to different
parts of the Caspian Sea, which is rich in fossil energy. Several meetings
among the littoral states' officials to agree on a legal regime, including
the most recent one held in May 2002, have all failed to achieve that
objective, because of their conflicting interests.

In the absence of a binding legal regime, Russia has sought to address the
division issue through bilateral agreements. The result has been the two
mentioned agreements with its neighboring Azerbaijan and Kazakhstan. The
details of the one with Azerbaijan have yet to be released. However, if
Russia's agreement with Kazakhstan is of any indication, it probably only
settled territorial issues, including the ownership of fossil energy
resources, to the extent agreeable to both sides when they signed it. The
settlement of harder issues, such as ownership disputes of oilfields close
to both countries, were left for future agreements.

Russia's conclusion of agreements with its immediate neighbors can only
create a false perception of addressing the unresolved issue of dividing the
Caspian Sea, while practically leaving most of the sources of conflicts
intact. At best, these bilateral agreements could temporarily settle
territorial disputes in the northern Caspian Sea, at least for as long as
the development of the oilfields in the disputed zones is not feasible for
either party, for one reason or another. Any unilateral attempt for their
development will surely lead to conflicts.

Thus, although this arrangement may be suitable for its signatories for a
while, it has not resolved the legal issue once and for all. Beside
unresolved territorial disputes between Kazakhstan and its neighboring
Turkmenistan, Iran, Azerbaijan and Turkmenistan are yet to settle major
disputes which have pitted them against each other since the mid-1990s. In
fact, their intensity was about to push them to a military confrontation
last year.

For example, the three countries have claims to three major offshore
oilfields (Azeri, Cheraq and Guneshli), now being developed by Azerbaijan.
Relations between Turkmenistan and Azerbaijan have deteriorated over their
ownership and that of other oilfields, such as Serdar, or Kapaz, as they
call them, respectively. Iran and its neighboring Azerbaijan have had claims
to what they refer to respectively as the Alborz or the Alov oilfield.
Azerbaijan's effort to begin its development unilaterally provoked an
Iranian show of its naval capabilities in 2001.

Turkmenistan's frustration at settling its disputes with Azerbaijan has made
it close to Iran's view advocating a multilateral agreement on the legal
regime. As the latter does not seem to be feasible in the near future,
Russia's bilateral agreements have inclined Turkmenistan to hint at its
flexibility. Thus, on September 26, Turkmen President Safarmurad Niyazov
mentioned to visiting Russian energy minister Igor Yousefov that the Caspian
states could sign an agreement to divide the Caspian Sea without Iran's
participation, that is, leaving Iran as the only littoral state insisting on
a multilateral agreement.

However, given the depth of conflict between Turkmenistan and Azerbaijan,
reflected in their beefing up their naval forces in 2001, and also in their
closing down their embassies in each other's capital, bilateral agreements
do not seem to be a practical solution to Turkmenistan's problem. However,
they can surely damage its peaceful and extensive ties with its neighboring
Iran, with which it shares a 920 kilometer border.

Given the importance of their multi-dimensional relations and their common
concern about the American presence in the Caspian region, major
disagreements between Iran and Russia over the Caspian Sea will not put them
on a collision course, at least in the short term. However, such is not the
case when it comes to Azerbaijan's disagreements with Iran and Turkmenistan.
As the latter have many reasons for grievances with Azerbaijan, their
unresolved territorial disputes with their Caspian neighbor could well burst
into a major crisis, and possibly a military conflict.

Bilateral agreements such as the mentioned ones cannot address the
unresolved issue of a permanent legal regime for the Caspian Sea. Peace and
stability in the Caspian region require a legal regime acceptable to all
parties in order to remove a major current source of conflicts and to create
mechanisms for the peaceful settlement of future disputes. Unless such an
arrangement is reached, the Caspian Sea's rich resources will likely help
deteriorate ties among and between its littoral countries, of which all have
other reasons for unhappiness with their neighbors.

Dr Hooman Peimani works as an independent consultant with international
organizations in Geneva and does research in international relations.