Azerbaijan and Turkmenistan move closer toward agreement on Caspian energy supplies

On 8-9 August in Baku the presidents of Azerbaijan and Turkmenistan held talks and signed a series of cooperation agreements, reports Caspian Barrel.  Among the documents signed were agreements regarding sea shipping, environmental protection, and copyright, but the key document was a declaration of strategic partnership which largely concerned energy resources.

‘The parties note the importance of enhancing cooperation in the field of energy supplies aimed at the diversification of routes from the Caspian region to world and European markets,’ the partnership states.

With the signing of this partnership it would seem that Azerbaijan and Turkmenistan have made a major step towards an agreement on a an underwater TransCaspian gas pipeline that was proposed back in the nineties but has been held up by geopolitical squabbles.

Azerbaijani political analyst Zardusht Alizadeh says that both Azerbaijan and Turkmenistan have claims to the offshore oil and gas field that Azerbaijan calls Kapaz and Turkmenistan calls Serdar. The arguments revolve around the status of the Caspian:

‘For example, Azerbaijan says that the Caspian is a sea, and any thing or resource found outside territorial waters belongs to the discoverer. From that point of view, the oil field belongs to Azerbaijan: in Soviet times Azerbaijani geologists discovered the field, so it’s ours. [Turkmenistan] counters, saying that the status of the Caspian hasn’t been determined yet, i.e. whether it’s a sea or a lake. It’s treated as a sea in law, but geographically it’s a lake. This issue is still a matter of debate.’

Zardusht Alizadeh
Zardusht Alizadeh.

The dispute over oil rights has caused serious friction between the two countries, but according to Alizadeh, since Berdimuhamedow took office Turkmenistan’s position has softened.

‘Under [late Turkmen President] Turkmenbashi, Turkmenistan actually favored creating a navy, but under Berdimuhamedow they have preferred diplomatic talks. Neither Azerbaijan nor Turkmenistan are dependent on any single oil field, so after long consideration the two sides agreed to exploit this field together. That’s the best decision.’

But, the analyst points out, the Caspian is not only of bilateral concern: its status is a multilateral issue.

‘Azerbaijan has already come to agreements with Russia and Kazakhstan about on the status of the Caspian. The only thing preventing an agreement with Turkmenistan was Kapaz-Serdar, but if that issue is resolved then the two countries can agree on the status of the Caspian as well. That leaves Iran.’

The treaties which currently divide control of the Caspian were signed when the Soviet Union had the power to dictate conditions. Now, according to Alizadeh, Iran claims that those agreements are no longer valid, and proposes to divide the body of water equally among the five countries which surround it. That would mean increasing Iran’s share of the Caspian basin from 13% to 20% at the expense of Azerbaijan.

‘The terms of the agreement reached with Turkmenistan are irrelevant because the issue at stake is none other than “territorial integrity”. Iran considers this part of the sea its rightful share, and Azerbaijan makes the same claim. In the sector in question the Araz-Alov-Lankaran oil field has been discovered….I think that this dispute with Iran will take a very long time to solve.’