TURKMEN SUMMIT - WALKING IN EXCLUSIVE CIRCLE
Initiative of Turkmenbashy is threatened with being frozen, since Russia strives for strenghthening influence in the Caspian region…
Status of Caspian Sea being an extremely sore point has set post soviet politicians' teeth on edge and its solution still seems to be very difficult, since every time the problem arises the Caspian oil-gas resources that have not been divided become a stumbling block. In other words, only three of five Caspian countries are conducting more or less intensive exploration and development operations in their shelves. Azerbaijan being the most active among these countries in developing its resources, despite subjective circumstances after collapse of the USSR could practically start and continue process of legitimation of Caspian Sea. Obtaining more and more foreign capital Azerbaijan is actively realizing its marine projects and forcing "the Caspian neighbours" to get more active in making export related decisions that will eventually lead to alternative oil-gas export pipelines construction, as well as, to full legitimation of Caspian Sea. Today geopolitical interests of oil exporting and importing countries, as well as, investors are interrelated to the extent that any bilateral arrangements between the Caspian countries will infringe on the others' interests and change attitude of the other coastal countries towards the status of the sea. As a rule it causes chain reaction of bilateral arrangements without any further progress.
Oil resources of the Caspian region (billion barrels)
Country Proved resources Potential resources Total resources Azerbaijan 12,5 32 45 Iran 0,1 15 15 Kazakhstan 17,6 92 110 Russia 2,7 14 17 Turkmenistan 1,7 80 82 Uzbekistan 0,3 2 2 Total 34,9 235 270 Energy Information Administration of the USA
History of bilateral arrangements originates form July 6, 1998, when Russian and Kazakhstan, inane effort to exercise sovereign rights to use mineral resources signed agreement on demarcation of Northern Caspian seabed. The agreement provided for division of the seabed and resources on the principle of modified middle Line…
January 9, 2001, during visit of the Russian Federation president Vladimir Pootin to Baku was signed "Joint declaration on principles of cooperation in Caspian Sea". At the moment of signing many people were sure that Azerbaijan moved form one of its main demands, i.e. division of Caspian expanse of water according to national sectors. More frequently uttered words they were "We divides seabed's, water remains common". However, text of the joint declaration included only a procedure of seabed division "based on the method of middle Line drawn according to equal remoteness of the points and modified on the parties agreement, as well as, according to universally recognized principles of international Law and practice used in Caspian Sea". Clause 5 of the declaration reads: "Other elements of Caspian Legal Status are supposed to be discussed during further phases".
It follows from these arrangements those, three countries out, of five, i.e. Azerbaijan, Kazakhstan Russian have reached the first consensus - division seabed and resources on the principle of modified middle Line with generally recognized principles of international and Caspian region practice taken into consideration.
"20 miles zone for common navigation purposes must be assigned in the middle of Caspian" - sate recently president of Turkmenistan Saparmoorad Niyazov at a meeting with the Economical Institute students.
Speaking about government opinion on the status of Caspian Sea he said, that despite his distinct position in favor of dividing "seabed and expanse of water into national sectors", a compromise option of dedicating 20 miles zone in the middle of the sea of free navigation is not rejected. Following its originally loyal policy concerning status of the Caspian, Turkmenistan government took a fairly tough position, and spare in support of dividing Caspian bed, expanse and surface according to national sector. The step back took place at Teheran meeting of Caspian country deputy ministers of foreign affairs. Position Turkmenistan represented by ex-minister of foreign affairs and special envoy to Caspian region Boris Shikhmooradov changed. Having agreed with the idea of dividing Caspian Sea on middle Turkmenistan joined CIS partner. Speaking about Teheran meeting of Caspian countries special operating Group on the eve of the Summit Boris Shikhmooradov characterized its results as maximally close to solution. "The way to new status of Caspian is open"- he assured optimistically.
More recently, head of the country Saparmoorad Niyazov relieved him of his post of special envoy to Caspian region and Afghanistan that he had occupied over the last eight months. There was no official explanation on the empowered person's resignation. The president, usually commenting on his cadre changes, Limited himself to appointing Shikhmooradov ambassador to China and released him from the duties of Turkmenistan president's special envoy.
"Uncertainly in Legal status hampers field developments in Caspian Sea. Poaching rate in also rising and we suffer from that most all" - said Turkmenbashy.
During the last Iranian-Russian negotiations Iran stated that country was not against the modified middle Line dividing method, however confirming its proposal of equal division of Caspian Sea with each of five coastal countries getting 20% total territory.
Meanwhile, veiled intrigues concerning demarcation are spreading. Active visits of Russian presidents special representative V. Kalyuzhny to the region is indicative of Russia's intention "to set the fashion" in legitimating the sea-lake. And tome-serving purposes are clear: the matter is not only 20 billion-barrel oil resources, but geopolitical interests, too.
Kazakhstan is extremely interested in export of huge oil resources of Kashagham. Astana joins the international Baku-Jeyhan project and following that Russia gives a prompt respond. Open disagreement with construction of "any environmentally hazardous oil and gas pipelines under hyperactive geo-dynamic conditions" on the Caspian was expressed in Russian-Iranian memorandum.
Although, Transcaspian gas pipeline is of extreme importance for Turkmenistan, Turkmenian Leader did not respond to Russian-Iranian declaration, at least, there were no comments in local media concerning the results of the meeting between Mohammed Khatamy and Vladimir Pootin. Turkmenistan Leader just stated that activity of foreign oil companies in disputable
Was illegal and it would not be reasonable to establish an environmental center until status of Caspian Sea is determined.
The clause concerning disagreement with construction of Trans-Caspian pipeline was called "childish" even by Russian political experts. According to Azerbaijan position such statements are aimed to ensure exportation of the Caspian resources to world markets via Iran or Russia. In reply to Kazakh Prime-minister Kasimjomart Tokayev's demand to give official explanation special representative of the Russian president on the Caspian region V. Kalyuzhniy having disproved information that Russia moved from arrangements with Kazakhstan and Azerbaijan concerning the Caspian borders, however said that the issue of dividing Caspian Sea was still "fairly difficult", especially due to positions of Iran and Turkmenistan. Speaking about Russia's attitude towards construction of oil-gas pipelines on the Caspian seabed he added that the clause didn't concern the existing process pipelines connecting the fields in the sea. However, during the meeting with president Aliyev on March 27, V. Kalyuzhniy stated that the Caspian countries positions on the status of the sea had become closer. Earlier, special representative of the Russian president on the Caspian region commenting on the results of the third meeting of special operating group on the Caspian said that delegations of five Caspian countries making provisions for the forthcoming summit in Turkmenistan were successful to come to agreement about at least half of all the points and that was undoubtedly a positive result.
- It is very important that we could determine the points of disagreement and now the parties have time to assess once more their proposals and positions, see what can be done to come to a compromise decision. It is very good that Turkmenian delegation advised Iranian party about its intention to step back from the principle of dividing the sea on equal shares. By the way, Iranian party was of positive opinion about the results of the last meeting in Teheran.
Conclusion
Thus, considering the above, Turkmenistan and Iran realize irreversibility of dividing the seabed according to the middle line principle throughout Caspian Sea. However, Iran and Russia are against construction of subsea oil and gas pipelines from Kazakhstan and Turkmenistan, that will hamper the export of the Caspian resources to energy consuming Mediterranian markets.
As a result, even if the five countries' positions concerning the middle line division of the seabed get closer a number of anti-pipeline amendments will be adopted; that infringes first of all on interests of Azerbaijan and Kazakhstan.
If the fields that are subject of dispute between Azerbaijan, Turkmenistan and Iran added here
Turkmen government is going to sign a number of some US $10 billion worth agreements with European and American companies on development of the Caspian fields. Over 80 million tons of oil are to be produced during development and exploitation of the fields and new perspective structures. The most interesting is that the disputable field Sardar is also among these fields (azeri name of this border field is "Kyapaz"). According to State Oil Company of the Azerbaijan Republic Turkmenistan can't start developing the field, until legal status of Caspian Sea is determined. "As concerns Azerbaijan we showed restraint and did not start operations in "Kyapaz", though corresponding agreement with Lukoil and Rosneft companies was signed in 1997 - told SOCAR representatives. The parties had agreed to freeze the contract until solution of the status problem."
We realize that after determination of the status of Caspian Sea part of the field may remain in Turkmen sector, though according most of SOCAR specialists the field belongs to Azerbaijan fully.
During presentations in Ashgabad, London, Hewstone Turkmenistan has included Serdar (Kyapaz) in the list of perspective fields for many times. Moreover, the government of this country signed agreement with company Mobile on development of Serdar field in 1998. However, one of the clauses of the agreement reads that Mobil will not carry out oil-gas operations in the field, until legal status of Caspian Sea is determined.
"To present time none of the biggest foreign companies has agreed to carry out operation in this field. We believe that even if Turkmenistan signs another number of contracts on Kyapaz, none of the foreign companies, as well as, companies working in Azerbaijan will not work there, - stated SOCAR representatives. Unlike Turkmenistan during operations interests of the companies that have signed the agreement with Ashgabad will not be infringed upon whatever the case is."
In April Iran is to start development of the Caspian resources. Iranian company Sadre Marine Structures has signed US $226 million worth contract with Swedish company GVA Consultants on exploration of oil resources in the Caspian shelf. The project will finish after three years and during that period a semi-submersible drilling rig must be constructed at city Neka in northern Iran. Iran currently produces oil mainly in the south of the country. Experts believe that Iran relying on information about availability of the Caspian oil resources decided to make investments in oil production here and remove existing disproportions in development of various districts.
then we will have an exclusive circle, that is unlikely to be broken within a week till April 14-15, i.e. summit of the Caspian five.
It means, maximum result that can be achieved here by the leaders of Azerbaijan, Russia, Kazakhstan Turkmenistan and Iran according to optimistic scenario is declaring division of seabed and bowels on the principle the middle, modified line, or continuing talks in an effort to reach consensus in future.
According to pessimistic scenario the summit will not be hold, due to the absence of any reason to arrange it; as a rule summits are to be arranged by their initiator, in this case by Saparmoorad Niyazov - Turkmenbashy. However, the latest statements of Turkmen leader to put it mildly are discouraging, while the government representatives are in militant spirit and this does not favour "atmosphere of consensus" at the forthcoming summit.
It must be interesting that these two Caspian countries took such position following active Russian-Iranian summit meeting and to the same extent active tours of Russian president's special representative on Caspian region V. Kalyuzhniy. Is it possible that Russia purchasing nearly all gas exported from Turkmenistan is not able to find a "common language" with its almost strategic partner on the east Caspian, or is not merely willing to find it. In other words it is going to freeze solution of the status problem, gain time and stop realization of Trans-Caspian projects and strengthen its influence in the Caspian region taking advantage of confusion caused by new administration take over in the USA.
If that is the case, it is quite clear why mass media speak about a long-term visit of head of the Azerbaijan government Heydar Aliyev to United States - so many problems to be solved …
It must be mentioned that position of Turkmenistan first of all hampers its own plans to pursue balanced investment policy in the Caspian shelf, because no one big international company can't afford working in such a risky region closed both, legally and geographically.
Currently, 6 onshore and 2 offshore oil-gas fields are under development in Turkmenistan. One of the most perspective onshore sites is southern part of Turkmen sector in Caspian Sea. According to Turkmen sources reserves here equal 2 billion tons of oil and 2 trillion cubic meters of natural gas. Total space of the area is 40 000 km2 Another big offshore oil-gas region is central part in Turkmen sector of Caspian Sea where oil reserves equal 1 billion tons and gas reserves some 2,8 trillion cubic meters. Total space of the area is 30 000 km2, with 23 explored structures.
The most perspective onshore zone is Amoodarya (eastern Turkmenistan). Perspective resources of this region are estimated in 1,075 billion tons of oil and 1,765 trillion cubic meters of gas. There are 74 perspective structures here, with total area equaling 16 000 km2.
| Field or Block | Development companies | Producible hidrocarbons (million.ton) | Project value ($million) |
| Yashlar Bridas, | Bridas, O&G Industry of Turkmenistan | 750 (rec) |
140 |
| Keymir, Ak-Patlauk | Bridas, Turkmenneft | 20 (rec.) |
255 |
| Burun, Kara-Dene, Kilyl-Kui | Lasmo, Min. of O&G Industry of Turkmenistan | 100.0 (rec.) |
300 |
| Cheleken-1 | Petronas, Min. of O&G Industryof Turkmenistan | - |
750 |