CASPIAN ECOLOGY PROBLEM IS BASIC

On March 17 special representative of the president of the Russian Federation on Caspian affairs, vice minister of foreign affairs of Russia Victor Kalyujniy met with Azeri and foreign entrepreneurs working in the Caspian - members of the Caspian Integration Business (Petroleum & Service) Club (CIBC). V. Kalyujniy is co-chairman of CIBC from the part of Russian Federation.

Mainly the issues of ecology, power engineering, international law and struggle against terrorism were concerned during the quite long and frankly conversation with businessmen who got the opportunity of getting acquainted with the course of negotiations on legal status of the Caspian.

President of CIBC Telman Aliyev informed on March 17 opening the meeting that the given session is dedicated to development of economic interaction in the Caspian and the degree of affect of political processes in the region on various projects. Aliyev noted importance of information exchange within CIBC frameworks, as it will be positively reflected on business activity.

At the meeting a certificate of new sample was presented to Victor Kalyujniy as the co-chairman of CIBC from the Russian party. In his turn, Victor Kalyujniy presented the certificates of new sample to two new members of the Club - Anshad Petrol JV and Middle East Petrol.

A few steps away the Convention

There are divergences on the Caspian problem, and they are grave, - vice minister of foreign affairs of the Russian Federation said, that's why intervention of the heads of the states is needed. In this connection a meeting at the level of ministers of foreign affairs of Caspian states will be held on April 6 in Moscow. It will be an original report of the working group of the "Caspian quintuple". Today the problem of the summit of heads of these states is also brought up for discussion, as even at the first summit in Ashghabad a decision was adopted that such meetings will be of systematic character. "We hope that if these two events take place, the working group be able to bring the text of the Convention on definition of the Caspian status to a logical conclusion in the technical plan", - Kalyujniy stated. He also noted that following, 14th meeting on the Caspian problem at the level of vice ministers the foreign affairs of Caspian states will be held late May, early June this year in Kazakhstan.

As to the power part, Azerbaijan is a pioneer in the Caspian. Other states now are only trying to start development of the projects on Caspian. But northern part of the Caspian is also very rich. In particular, emphasized high-rank Russian diplomatist, this was linked with that the government of former USSR cared much about northern Caspian with the basic spawning of unique sorts of sturgeons. "The northern Caspian was closed for oil and gas sphere, that's why USSR was not developing the Kashagan deposit, - so as not to lose a huge and irreplaceable stock - both the ecological and biological component of the Caspian", - V. Kalyujniy noted. Besides, then there was no modern technique to operate Caspian without putting a damage to ecology.

Now the power complex is in different conditions, there are latest technologies allowing to develop the deposits of northern Caspian with least danger for environment. But at the same time, these fields are located in a quite complex geological and tectonic areas in shallow depths "and I state with all seriousness that today we are not ready from technical aspect to start modern professional liquidation of this or that accident in case of any negative situation", - Kalyujniy said.

The deposits Kashagan and a part of Kurmangazi have quite dangerous physical characteristics being hydrosulphuric. Ingress of hydrogen sulfide to water is not an oil spill that may be taken out, it has a biological basis, fish will eat it. Moreover, hydrogen sulfide will so much spread in the Caspian that in a couple of days both Azerbaijan, and Iran will feel its affect. Since 1976 northern Caspian had the status of an especially protected zone, Russia offered to Kazakhstan to continue these traditions, but unfortunately, Kazakhstan refused this idea, - Kalyujniy emphasized.

Nevertheless, V. Kalyujniy went on, energy component is a strong factor for economic development of the states being reformed in the Caspian - Kazakhstan, Azerbaijan and Turkmenistan and RF understands it. Therefore, position of Russia is not to fixate on the legal document on Caspian, while many other reps of the Caspian states said "first of all the Convention is needed, and only after we'll start developing fields". Russia considered this position inadequate in today's economic situation, we should move simultaneously in both directions.

That's why, V. Kalyuniy explained, bi- and tripartite agreements on the Caspian began to be concluded, which enabled the new states to develop independently. "Both for the RF and Iran Caspian is not the pre-eminent point. Caspian may just strenghten resource base of these countries, but can't give a sharp push to oil production volumes", - vice minister of foreign affairs of the RF continued. Speaking about Caspian stocks Kalyujniy noted the figures vary within large limits from 1 to 13 and even often to 17 bn tons depending on the source. But today one can speak only about the real proved stocks available in precisely outlined volumes.

Continuing the theme of ecology special rep of the RF president on affairs of the Caspian region did not exclude that the International organization on protection of fish resources CITES (more than 160 states) will put a moratorium on fish products import from the Caspian states.

"Sturgeon livestock is catastrophically decreasing. I do not exclude that CITES will put an interdiction on import of fish production and sturgeon caviar from the region", - Kalyujniy said acting at the CIBC meeting in Baku.

Kalyujniy noted that poaching of sturgeons in the Caspian got a scale character, and the situation with sturgeons has reached a critical point. According to him, actual catch of sturgeons "many folds over exceeds the level of official quotas. The ratio of catch to quotas exceeds tens of times".

In opinion of Kalyujniy, none of the Caspian states is aware of the actual condition "either in the field of ecology, or in the sphere of bioresources in the Caspian".

Speaking about Moscow's position in the field of usage of Caspian power resources, the high-rank diplomat reminded that Russia adheres to the principle of "multiple vectors" in the economic and not the political aspect.

Caspian is not the Persian Gulf,

Volga is not Danube

Today Russia does not aim at providing max transit of Caspian hydrocarbons through the territory of the RF. However, Kalyuniy considers, "USA accuses us in monopolism in the pipeline policy, though it is not this way". In opinion of the special representative of the RF on the Caspian region, all the 15 allied republics built the whole transport infrastructure of the Soviet Union and today all these countries have the right to use this infrastructure with account of their economic interests. In his turn, Kalyujniy considers, the Americans are playing for future Caspian oil - "under the slogan of multiple vectors and struggle against monopolism they hold a somewhat different position from Russia in this relation". RF acts for multiple vectors, but not the political, but economic one. Unfortunately, Kalyujniy considers, the idea of monopolism of the Russia and those who accuse the RF are completely different.

In the pipeline system in 1998-2002 Russia had problems with Ukraine, when gas was pumped from the pipeline without any sanctions. Ukraine used the right of monopoly to close the pipe and take gas therefrom, and Russia was unable to do anything. It is an example of that, Russia was also depending on Ukraine, today depends - on Belorussia, further from Czechia. At the same time, Russia finds a golden mean, and will continue moving in this direction.

"Caspian is not the Persian Gulf and not an alternative to Iraq, but a polygon providing the reformed Caspian states with an opportunity of distinct and fast development. This the most important reason why Caspian exists today, and the life will show how much oil will be in the Caspian", - Victor Kalyujniy stressed.

During the session head of the sector of Azerbaijan presidential administration Rustam Mamedov interested in the opportunity of using the Volgodonsk channel as an international river transport road, as in case of the Danube river.

"This question will be brought to judgement of the ministers of foreign affairs of Caspian states, maybe subsequently it will be submitted also for judgement of the heads of Caspian states", - the special representative of the president of RF on Caspian affairs Victor Kalyujniy continued at the CIBC session.

Kalyujniy also noted that comparison of Volga and Danube - is "wrongful". "Volga is internal waters of Russia, while Danube passes through a number of European states", - he said.

According to him, today Russia "is ready to simplify the permissive mode of ships passage through Volga". At that he noted, as to the passage of trade ships, "here there are no problems. There are problems with military displacements". In opinion of Kalyujniy, after this question is considered at the level of ministers of foreign affairs and probably, at the level of the heads of Caspian states, "the permissive mode of pass through Volga will keep on".

During CIBC session chairman of the Supervisory Board of the International Insurance Company (IIC) Khayal Mammadkhanli reminded that 80% of the Caspian pollution is caused by the Volga river...

In this connection, Victor Kalyujniy said the following: "In the Caspian problem I have always put the questions of ecology to the first place, to the second - bioresources, and only to the third - power resources". Kalyujniy emphasized that Ctenophora also came here from the Black Sea. "Namely for this reason I insisted on establishment of a monitoring center on Caspian", - Kalyujniy stated. But other countries did not back this idea.

Vice minister of foreign affairs of the AR Khalaf Khalafov explained position of the Azerbaijan party in this question at the CIBC session. According to him, in accordance with the already signed convention on Caspian ecology, a permanent secretariat is to be established, the functions of which will include those planned to endow this monitoring center with.

Special representative of the RF

on the Great Lakes…

Commenting the statement on that the Caspian is included in the area of USA interests sounded at the press conference on March 15 in Baku coming from the deputy general Charles Wald commanding the USA European command of forces vice minister of foreign affairs of the RF V. Kalyujniy was laconic: "Russia also has interest to the Great Lakes and there will be also a special representative of the RF on the Great Lakes".

The war in Iraq was up for low cost price of oil production and huge stocks of hydrocarbons and not the presence of mass destruction weapons at Saddam Hussein's regime", - Kalyujniy noted.

Presently the USA is at the stage of oil production fall. 340 mln tons of oil a year is produced in USA and 600 mln tons more is bought. Hence is the USA interest to the Caspian, - Kalyujniy thinks.

Oil from BTC will also go only to the USA markets. "Oil will not go to Europe for economic reasons", special representative of the president of Russia stated. Ships of 300 thousand tons displacement will be loaded in Ceyhan. They are favorable to operate only for oil transportation to USA. The Black Sea with ships of 150 thousand tons of displacement suffices for Europe, he noted.

The problem of ships' passage through Turkish straits is far-fetched to draw more number of companies to BTC. Presently the situation is artificially forced to the benefit of this project, V. Kalyujniy considers. According to available information of the Russian party, now the Black and Marble seas are polluted more than Bosphorus. The Bosphorus strait, despite the statement of the Turkish party about overload, is loaded by 50% of its opportunities.

According to him, there are questions of ecological safety in the Bosphorus and they must be dealt with. "Russia can deal with settlement of these questions. New equipment, double boards on the tanker are needed, - let's discuss and solve it. However the situation must not be artificially deepened politicizing for the benefit of any other project. Closing the Bosphorus is completely inadmissible", - Kalyujniy emphasized.

Baku - Novorossisk

reverse not considered yet

At the same time the Russian diplomatist noted that Russia does not act categorically against use of the Baku-Tbilisi-Ceyhan pipeline by Russian companies to transport petroleum to world markets.

Concerning the opportunity of pumping Russian oil via BTC, the Russian diplomatist noted that pumping of Russian oil to Baku-Tbilisi-Ceyhan basic export pipeline via the Baku-Novorossisk pipeline route (at reverse of this pipeline) is not considered, as there are no official offers on this question. Kalyujniy noted that Russia offered to Azerbaijan to pump its gas from "Shah Deniz" gas condensate deposit to Turkey via the pipeline "Blue stream", however Baku refused. This project, according to him, was economically favorable. The South-Caucasian pipeline was not needed to build for its realization that would lead to significant economy of means. Thus the issue of transportation of Azerbaijan gas to Europe by transit through Russia would be solved.

As to construction of Novorossisk-Supsa-Ceyhan, it is unrealizable, special rep of the president Vladimir Putin on Caspian affairs V. Kalyujniy considers.

Presently there are two versions of realization of this project - laying the pipeline on the Black sea coast or on its bottom. However the Russian party will never agree with this version, as the Russian Black Sea coastal line is very small. In case of an accident on the pipeline in this region, a serious ecologically dangerous situation will occur. Laying the pipeline on the Black Sea bottom is economically inexpedient, Victor Kalyujniy noted. Thereof Russia is not considering this variant at all.

Information: Initiator of realization of the Novorossisk-Supsa-Ceyhan connecting oil pipeline construction project is the Georgian International Oil Corporation (GIOC). It was supposed that the given pipeline will be intended for transportation of 50 mln tons per year petroleum delivered to the Novorossisk port via CPC pipeline. 40 mln tons of Siberian oil and oil products also arrives in this Russian port by rail from Makhachkala. According to assertion of the Georgian party, the Bosphorus strait cannot control all these volumes (about 120 mln tons), and in this connection construction of the Novorossisk-Supsa-Ceyhan (NSC) oil pipeline is rather expedient. It was supposed that NSC will not be a competitor of the Baku-Tbilisi-Ceyhan pipeline with the same throughput - 50 mln tons of oil a year, but will be an addition to this project. In opinion of GIOC leadership, realization of the given project is favorable both for Georgia, and Russia. In the economic plan Russia will gain on the average $500-700 mln from this project just from the difference in transportation in comparison with oil transportation by ships to pass through the Bosphorus strait. In the whole realization term of the given project is 2.5 years. During the visit to Russia on February 10-11, 2004 the new president of Georgia Michael Saakashvili also acted with the proposal to realize the given project

On the Caspian bottom

Special representative of the president of Russian Federation on Caspian affairs said the special group on Caspian did not manage to coordinate one of the basic questions of the Convention - laying of pipelines on the lake bottom. According to him, the question of laying the pipeline on the Caspian was one of the basic at the working group session on March 16-17.

Russia has offered to introduce a formulation to the Convention on legal status of the Caspian, in conformity with which projects connected with laying of pipelines on the sea bottom, would be carried out on the basis of consent of the five Caspian states. At voting the position of Russia was supported by the Iranian party. Azerbaijan, Kazakhstan and Turkmenistan voted against, Kalyujniy informed. According to him, Russia will insist on including the text of Russian formulation to the Convention.

"The Russian party has always emphasized that Caspian is a unique reservoir, and any man-caused emergency can lead to catastrophic consequences. Presently none of the Caspian parties is technically ready to solve the possible problems in case of this or that emergency", - Kalyujniy said.

From his part the representative of Azerbaijan to the working group on Caspian - deputy minister of foreign affairs Khalaf Khalafov emphasized that in the question of laying the pipelines on the Caspian bottom Azerbaijan will proceed from the principles of realizing sovereign rights. "Non-agreement of the Convention on this question must not create obstacles for realization of sovereign rights of each of the coastal states", - Khalafov said. This position was supported by representatives of Kazakhstan and Turkmenistan.

Stock growth is minimal

V. Kalyujniy also expressed disagreement with the position of Russian oil industrialists, who today unreasonably increase oil production in Russia, while indemnification of the resource base considerably lags behind. In recent 12-13 years the level of indemnification did not exceed 30% of produced petroleum, while in the Soviet times this parameter was changing within the limits of 100-150% (at production of 100 mln tons presence of new stocks in the volume of 100-150 mln tons was proved). Now indemnification of the resource base equals only 20%.

The ideology of "new" Russians owning a property in the power complex is based on that alternative fuel will be found in 2020-30. "To extort natural resources of the country today and to think that alternative fuel will be found tomorrow is not correct. "Presently it is necessary to spend rationally what is urgent, but at the same time to develop other branches, and not to give an opportunity in any case to the West to rank us in the list of weak states taking into account that resource-export component lays in the basis of many post-soviet states", - vice minister of foreign affairs of the Russian Federation continued.

Safety is above all

Further, constant participant of the Caspian Integration Business (petroleum & service) Club, representative of the presidential administration of the AR Rustam Mamedov interested in an opportunity of creating a subregional organization in the Caspian today, within the framework of which it would be possible to conclude contracts on mutual safety.

Special representative of the president of Russian Federation on Caspian, vice minister of foreign affairs Victor Kalyujniy stated Russia considers the safety questions in the Caspian a priority among the Caspian problems on the whole. "The question of the Caspian safety is even more urgent than the questions of energy", - Kalyujniy said.

He emphasized that in opinion of the Russian party, in the questions of safety there is no necessity of presence of the third countries in the region. In opinion of Kalyujniy, the question of the Caspian safety must be solved collectively.

According to him, Russian party acts against immediate demilitarization of the Caspian. "In my opinion, with the American bases standing in Uzbekistan and Kirgizia, it is not right to speak about this", - Victor Kalyujniy said. "We don't have to arm, but we must keep what we have", - Kalyujniy said. In his turn vice minister of foreign affairs of Azerbaijan Khalaf Khalafov noted that in opinion of the Azerbaijan party, "the question of safety occupies a central place in the Caspian problem".

At the same time, Azeri diplomatist emphasized that "terrorism is a question of the whole international community". "In this regard Azerbaijan, as a participant of the antiterrorist coalition, acts for close cooperation with the international community in questions of struggle against terrorism in the region", - Khalafov said.

Answering the question on an opportunity of creating a collective structure of Caspian states on safety, Khalafov noted that in opinion of the Azerbaijan party, "there is no need in this". There is an antiterrorist center within CIS framework already, and there is no necessity for the Caspian states to create a collective structure to provide good safety and struggle against terrorism", - Khalafov said.

20.4% of the sea

Concerning position of Iran on legal status of the Caspian, special representative of the president of Russian Federation on Caspian Voctor Kalyujniy noted the agreements achieved on division of the Caspian correspond to Russia, Azerbaijan and Kazakhstan. To some extent these agreements correspond also to Turkmenistan. However, position of Iran is not constructive enough today. According to the present offer of Iran, "we would have to cut half the water area of both Azerbaijan and Turkmenistan", Kalyujniy noted.

Currently the most fair division of the Caspian is as given above: 29% - to Kazakhstan, up to 19% - to Russia, Azerbaijan and Turkmenistan each, 14% - to Iran, Kalyujniy noted. "If Iran proclaimed its approach about 20% of the sea belonging to it at least in 1997, we would consider this proposal more seriously. But making such statements after signing the interstate agreements (in 1998), when the principle of modified middle line was laid on the basis of Caspian demarcation, was late", - Kalyujniy emphasized. However negotiations on this issue keep on, and Iran searches a way out from the situation.

Expressing his relation to the position of Iran, vice minister of foreign affairs of Azerbaijan Khalaf Khalafov noted that questions of percentage belonging of the Caspian territories "are considered neither within the framework of working group of the Caspian "quintuple", nor that of bilateral negotiations". The principle of demarcation of the sectors of Caspian states, in particular principle of modified middle line is considered at the negotiations.

As to Iranian statements on percentage belongings in the Caspian, Khalafov thinks, these are only political statements. Participants of the working group of Caspian "quintuple" do not consider belonging of certain sites of the Caspian bottom to this or that party, either.

The Iranian party acts against bilateral and tripartite agreements on legal status of the Caspian Sea.

"We shall not sign bi- or tripartite agreements on Caspian as did Azerbaijan, Kazakhstan and Russian Federation among themselves. We do not recognize these agreements, but we shall sign pentalateral agreement on the status of the reservoir at achievement of appropriate consensus by all the parties", - Safari said. Such kind of agreements complicate realization of the negotiations, vice minister of foreign affairs of Iran Mehdi Safari said after last negotiations of working group of the Caspian "quintuple" in Baku. Thus he noted Iranian party will continue bilateral consulting with Caspian countries to achieve consensus, he noted. At that Iran insists that 20.4% of the Caspian Sea must be transferred to it. Presently, there are some international principles of sea space demarcation, including on the middle line, parallels and meridians, division of the water thickness.

These principles were applied at division of Northern, Baltic seas between Lithuania and Estonia, water border lining between Cameroon and Nigeria, Safari said.

According to him, at last summit of heads of the Caspian states in Ashghabad the parties marked necessity of settling any questions on economic and other activity on Caspian through consensus. "We are ready to conduct bilateral and tripartite negotiations on the status exactly for achievement of agreements in a pentalateral format", - the Iranian diplomat emphasized.

Besides also presence of the "third forces" in the region renders a negative affect on the process of negotiations. Iran also acts against various teachings in the Caspian with assistance of outside forces, in particular, USA. "Presidents of Caspian states have agreed that safety of the Caspian must be provided only by coastal countries", - representative of Iran said.

Concerning the coordinated point on trade navigation, Safari noted that this point of the convention on legal status of the Caspian meets the modes adjusted so far by the contracts from 1940. At the same time, he emphasized, presently the convention of Caspian states on trade navigation is also being developed, within the framework of which the problem of ships passage through internal waters of the Russian Federation is also discussed.

Readiness on 61%

An extemporaneous press conference was also held at the CIBC meeting, where vice minister of foreign affairs of the RF Victor Kalyujniy together with special representative of the Azerbaijan president on Caspian affairs Khalaf Khalafov and head of the sector of presidential administration of Azerbaijan Rustam Mamedov answered many questions of the journalists.

Acting at the CIBC event Kalyujniy noted one of the purposes of the Club is a high level of informational support of the negotiations process on definition of legal status of the Caspian sea. The high rank Russian diplomatis emphasized also that prompt settlement of this issue will create a favorable base for active development of Caspian states. Vice minister of foreign affairs of Russia noted that recently Russia, Azerbaijan and Kazakhstan have reached a consensus on many questions, and positions of Iran and Turkmenistan have changed recently in many respects.

According to Kalyujniy, after the last negotiations on the Caspian status, readiness of the Convention on legal status of the Caspian reached 61%. "Being dissatisfied I do not think it is a shame to say today that working group on the Caspian in this structure is formed and it is actively advancing the legal issue in the Caspian region", - Kalyujniy emphasized.

According to him, the situation with working out the documents in the south Caspian was slightly delayed. "But after meetings in Turkmenistan, I received promising answers to a number of questions from the head of Turkmenistan giving a ground to suppose that we are in the right way", - he continued.

The negotiations among between Azerbaijan, Turkmenistan and Iran in a bilateral format also installs hope that a solution on the Caspian problem will be found.

In turn, Khalaf Khalafov noted that a certain progress is achieved in the negotiations process on Caspian in a bilateral format with Turkmenistan and Iranian parties that gives the ground to achieve a consensus in a pentalateral format.