This action might not be possible to undo. Are you sure you want to continue?
Source: Nezavisimoe Voennoe Obozrenie, May 18, 2007 Agency WPS The Russian Oil and Gas Report (Russia) 23/5/2007 The presidents of Russia, Kazakhstan, Turkmenistan, and Uzbekistan have agreed to build a joint gas pipeline to Europe along the Caspian Sea shore. The leaders of Poland, Ukraine, Georgia, Lithuania, and Azerbaijan have attempted to create their own energy alliance, independent of Moscow. These developments have drawn the international community's attention to the world's largest lake, which is turning into a geopolitical apple of discord. New states have been established in Central Asia and the South Caucasus; promising hydrocarbon deposits have been discovered; new pipelines are operating; the region has a number of frozen and active armed conflicts; the United States, NATO, Iran, and Turkey are striving to expand their political, economic, and military hardware influence in a strategically important region. All this is intertwined in the Caspian. According to Russian specialists, the West's estimates of the Caspian's explored oil and gas reserves exceed the actual data several-fold. This primarily applies to hydrocarbon reserves in Azerbaijan's sector of the Caspian Sea. For example, American estimates of Azerbaijan's energy resources are four times greater than Russia's estimates. The reason for the discrepancy is clear. The Caspian countries are exaggerating their reserves in order to attract foreign investors. But this is also advantageous for Russia's geopolitical rivals, since it enables them to influence policy in the Caspian countries. All the same, there is good reason to call the Caspian the second Persian Gulf. Oil production volumes here are comparable to the combined output of Iraq and Kuwait, but far smaller than the combined output of OPEC. Caspian production levels are expected to reach 4 million barrels a day by 2015. OPEC produced 45 million barrels a day in 2006. Russian companies control 10% of oil production in the Caspian and about 8% of gas production. The largest oil deposits, and the three largest oil projects, are in Kazakhstan and Azerbaijan. Western oil majors have stakes in each of these projects. Turkmenistan's potential offshore oil reserves in the Caspian Sea have not yet been explored, and cannot be developed due to disputes between Turkmenistan, Azerbaijan, and Iran about border demarcation in the southern part of the sea. By 2012, Kazakhstan is expected to take the lead in oil output volumes (about 55%), followed by Azerbaijan with 32%; Russia and Turkmenistan will produce around 13% between them. It is hardly surprising that Washington intends to implement the Bush-Nazarbayev Houston initiative by investing the huge sum of $200 billion in Kazakhstan's raw materials sector over the next decade. For the Caspian region countries, the local oil and gas reserves are strategic riches; for Moscow, they are of interest only at the strategic level so far. The main consumers of Russian oil and gas are
in Europe, and as yet there are no Caspian hydrocarbons mixed in with the resources exported to Europe from Eastern Siberia and Russia's Arctic regions. Hence our efforts to build the Baltic Pipeline System and expand deliveries in the south - to Turkey and via Bulgaria and Greece. But the Caspian Shore Pipeline construction agreement is already inspiring hope that the Kremlin will pay more attention to the Caspian. Russia could not only maintain its positions here, but even enhance them. The Kremlin's strategic interest in developing new fields coincides with national interests in developing stable, friendly relations with states in the South Caucasus (Azerbaijan, Armenia, Georgia) and Central Asia (Kazakhstan and Turkmenistan), as well as Iran. At the end of the 20th Century, the Caspian map changed from two states - the USSR and Iran - to five independent countries: Russia, Kazakhstan, Turkmenistan, Azerbaijan, and Iran. This confronted them all with the problem of defining the status of the lake-sea. Until the Soviet Union's disintegration, the legal regimen here was based on two treaties between the USSR and Iran (the RSFSR-Persia treaty of 1921 and the USSR-Iran Trade and Navigation treaty of 1940). These treaties defined the Caspian as off limits to the vessels of other states. Negotiations aimed at changing this regimen began in the 1990s, but they are still at an impasse. To date, a sea floor demarcation agreement has been signed by three countries: Russia, Kazakhstan, and Azerbaijan. The trilateral agreement concluded by these countries in May 2003 divided 64% of the Caspian Sea floor: 27% to Kazakhstan, 19% to Russia, and 18% to Azerbaijan. The northern agreement participants are prepared to give Iran no more than what it had before the USSR broke up: 14% of the shelf. But Iran wants 20%, and insists on moving the border 80 kilometers to the north of the former Soviet border. Then Iran could claim the Alov, Araz, and Sharg oil fields, which an international consortium is developing by agreement with Azerbaijan. Iran's stance has been supported by Turkmenistan, which was ignored by the three northern coalition countries when they signed their separate agreement. Turkmenistan is challenging Azerbaijan's rights to the Sharg, Chirag, and Azeri fields. At the same time, Turkmenistan is also apprehensive about Iran's claims to its gas reserves. It has taken a provisional stance, supporting Iran, but seeking to establish a 15-mile coastal zone under national sovereignty and a 35-mile fishing zone. Although Azerbaijan's position on sea floor demarcation is close to the positions of Russia and Kazakhstan, it still proposes to distinguish between water and airspace, which should be entirely under national sovereignty. Baku also maintains that laying pipelines along the sea floor should be the sole prerogative of the country that owns the territory crossed by the pipeline. Iran is proposing to allocate 20% of the Caspian to each of the region's five countries, then using the sea in common, on the condominium basis, and establishing an Organization of Caspian Shore States to develop the sea's resources and distribute profits equally. The Caspian demarcation problem now depends on whether Azerbaijan and Iran can find a common language with Turkmenistan's new leader, Gurbanguly Berdymukhammedov, and whether he will accept a compromise with them, and what kind of terms he would require to sign a
demarcation agreement. Development of the Caspian's energy capacities and energy resource exports depends on more than developing oil and gas fields and establishing the sea borders. The associated problems of hydrocarbon transport and security have become particularly significant. Caspian oil is exported via several pipelines. The Baku-Tbilisi-Ceyhan system has a capacity of over a million barrels a day; according to some Russian experts, this pipeline owes its existence to political rather than economic considerations, and the outlook for it is uncertain. The same applies to the Northern oil pipeline (Baku-Novorossiysk) and the Western oil pipeline (Baku-Supsa), with throughput capacities of 100,000 and 115,000 barrels a day respectively. Kazakhstan and Azerbaijan recently signed an agreement to transport 10 million tons (733 million barrels) of Kazakhstan's oil to Baku by barge each year. There is also the Russian Atyrau-Samara pipeline, starting in Kazakhstan and ending on the Volga. Its throughput capacity is 300,000 barrels a day, but Russia has promised to increase this to 500,000 barrels. A Kazakh-Chinese pipeline is being built to deliver oil to China; its first part links Kazakhstan's Aktube oil fields with the Atyptau oil center, already complete. The second part, still under construction, will run from Atasu (north-western Kazakhstan) to Alashkanou (Xinjiang, China) and cost around $850 million. Initial throughput will be 200,000 barrels a day, with a maximum of 400,000 barrels. In December 2002, the governments of Turkmenistan, Afghanistan, and Pakistan signed a memorandum of intent to build a Central Asian pipeline that will supply oil from Uzbekistan and Turkmenistan to Gvadar, Pakistan's port on the Arabian Sea. This project has been postponed due to continuing instability in Afghanistan. Overall, most pipeline systems being built from the Caspian either bypass Russia or run south outside Russia. So it is no coincidence that the agreement reached by Russia, Turkmenistan, Kazakhstan and Uzbekistan - on building a Caspian shore pipeline system leading to Europe via Russia - has caused such a furor abroad. Efforts to cut off Russia from the Caspian Sea's hydrocarbon riches have failed. And many do not like this at all. Presumably, the foreign policy of the United States in the Caspian region over the next few years will be aimed at achieving several objectives, including creating conditions that prevent Russia from controlling and directing the development of various processes to the detriment of Washington's interests. Those interests include ensuring guaranteed access for American corporations to the Caspian region's fuel and energy resources and other resources - especially in light of uncertainty about the stability of Middle East hydrocarbon resources. The United States will strive to take advantage of the favorable military-political conjuncture shaping up in the course of the anti-terrorist operation in Afghanistan, and to expand its presence in Central Asia, and to secure additional defense infrastructure facilities for deploying missile defense elements in Azerbaijan and Georgia. In addition to the United States, Britain, and Turkey, some other countries are also developing an increasingly visible presence in the Caspian region: Germany, China, Saudi Arabia, the United Arab Emirates, and Japan. It should also be noted that international corporations control 27% of oil reserves and 40% of gas reserves in
the Caspian - and they do not intend to stop there. The Georgian-Ossetian conflict (1991-92) and the Georgian-Abkhazian conflict (1992-93), the war between Armenia and Azerbaijan over Nagorno-Karabakh, the terrorist wars in the North Caucasus, the tension in relations between the USA and Iran, the proximity of Iraq all this, in addition to the energy interests of various countries, draws the Caspian region to the attention of the powerful, including NATO, the CIS Collective Security Treaty Organization, and other military-political alliances and organizations. Washington's determination to build up its influence in this region is understandable. It is seeking to ensure security for the Baku-Tbilisi-Ceyhan oil pipeline, increase its military presence in the Caspian, and establish rear bases in the event of a military solution to the Iran problem. True, Washington is trying not to mention that option - but it was stated plainly by Reno Harnish, US Ambassador to Azerbaijan, who told the AFP news agency that Washington has already spent $30 million on improving Azerbaijan's coastal defenses, and now intends to spend $135 million on the Caspian Guard Initiative, aimed at improving the navies of Azerbaijan and Kazakhstan. According to AFP, the Pentagon has already built headquarters and two radar stations in Azerbaijan. Moreover, the partnership plan between Baku and Brussels includes measures to supply Azerbaijan's Navy and Border Guard Service with modern military hardware. This was mentioned in a report to the US Congress by General James Jones from the United States European Command, who said that "the USA has made great progress with the Caspian Guard Initiative: this program entails establishing an integrated airspace, maritime, and border control regime for Azerbaijan and Kazakhstan, and rapid reaction to any emergencies, including the threat of terrorist attacks on oil industry infrastructure." In fact, Washington is attempting to surround Iran with military infrastructure - just in case. Naturally, Russia wishes to restrain US influence in an area that is directly adjacent to some of Russia's central regions - the Urals and the lower Volga. Moscow has well-founded suspicions that the Caspian Guard Initiative is not aimed against Iran alone, but also against Russia's national interests. If America's plans are realized, they will pose a danger to Russia's defense capacities. As an internal lake, the Caspian Sea has always been Russia's territory and influence zone. The presence of US military structures on the "internal lake" belonging to the Caspian shore states is a direct threat to their security and sovereignty. Apparently, this is why President Vladimir Putin spoke as he did at the International Conference on Caspian Security in Astrakhan; he said that "by uniting their efforts, the Caspian states can resolve all these questions effectively on their own."
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.