MATTHEW BRYZA: 2006 WAS A GREAT YEAR IN US-AZERBAIJANI RELATIONS

AzerTag, Azerbaijan
Jan 9 2007

Following is an interview of AzerTAc’s Washington-based correspondent
with the U.S. Deputy Assistant Secretary of State for European and
Eurasian Affairs, OSCE Minsk Group American Co-Chair, Matthew Bryza

· Mr Bryza, the year 2006 will be remembered by the frequent
bilateral trips of Azerbaijani and American officials, the highest
level of which was the President of Azerbaijan Mr. Ilham Aliyev’s
visit to Washington in April, and, later, in December, the visit of
our first lady. If you could summarize for us, what 2006 brought to
Azerbaijani-American relations and what kind of expectations you have
for 2007 in this regard.

For me, personally, it brought an enormous amount of interactions
with Azerbaijani senior officials. I think, I saw Foreign Minister
Mammedyarov more than any member of my family. But in a broader
more strategic and significant sense, this was a great year for
US-Azerbaijani relations. President Aliyev’s visit was a watershed
in US-Azerbaijani relations He was extremely effective, as always,
communicating Azerbaijan’s priorities for its own development, its
own desire to freshen the political air, to open up and liberate the
political system, to bring Azerbaijan onto the same path as the rest
of us in the Euro Atlantic community in terms of strengthening the
democratic institutions with the full recognition that this takes
time and is not easy. I think, he did a good job in demonstrating to
our senior leadership that his objective is one that we share, which
is to move Azerbaijan closer and deeper to the democratic sphere. We
have to keep working at that. Madam Aliyeva’s visit to Washington was
quite a success as well. She impressed everybody she met with. I was
at the dinner in her honor and was so impressed by her speech recited
from memory, which reflected shared strategic objectives and the
vision for the development of Azerbaijan, its people and its culture,
which is only something we welcome.

It was a big year on energy cooperation as well with Azerbaijan making
some significant strategic decisions: one, to work with Euro Atlantic
community to expand Azerbaijan’s own gas production and secure major
markets in Europe, and two, as we just saw in SOCAR ‘s announcement,
Azerbaijan will meet its gas demands and its electricity generation
demands strictly through energy produced in Azerbaijan. That’s a
tremendous achievement for Azerbaijan’s independence and for all of
us in the Euro Atlantic community, who look at Azerbaijan as a key
short term supplier to help diversify Europe’s energy sources. Big
positive year. I haven’t even talked about Nagorno-Karabakh. We’ll get
into that in a moment. But the year ended with the sense of optimism
and the sense of momentum.

· Starting Januray 1st, we are looking at a different gas market in
Eurasia. After President Aliyev turned down Gazprom’s offer, which he
called a "commercial blackmail" Azerbaijan has ceased importing gas
from Russia and trying to pull Gergia out if the crises as well. How
does the US government feel about it?

The way Azerbaijan and Georgia has worked during this winter- I risk
sounding overly positive in my assesment here- but what happened in the
last few weeks is a powerful example of how both public and private
partnerships, meaning companies and governments can work together,
neighbors like Azerbaijan and Georgia can work together to strengthen
their own independence. At the same time advance the interestes of
private companies whose investemtns are crtitical to help Azerbaijan’s
energy sector and maintain balanced economic growth. One thing, I’d
like to emphasize here- this cooperation with Azerbaijan isn’t done
for the United States. We don’t look at it as someohow satisfying
our demand. We will never consume gas produced in Azerbaijan. But
we care about gas production in Azerbaijan, by bolstering the energy
independence of Azerbaijan and Georgia the efficiency of markets in
Europe is improved.

· Due to the technical porbelms the production at Shah-Deniz field
is being delayed and complicates the gas supply for Azerbaijan and
Georgia this winter Ýs it something you are concerned about?

Not really concerned. I have maintained normal contacts with
BP comsortium and Statoil. What I understand, it is the typical
technical challenge, that faces drillers all the time. The timing of
this was quite unfotunate. It came just at a critical moment when the
countires were trying to pull together a deal for gas supplies this
winter. But that’s the nature of the oil and gas business. Shah-Deniz
structure is complex, but extremely promising. I have full anticipation
that world’s greatest technologists that are present at Shah-Deniz
consortium are going to be able to reolsve this matter quickly. What
we are hearing from BP, within the next couple of weeks they hope to
have this problems fixed.

· 2006 also brought changes to Turkmenistan. With upcoming presidential
elections on February 11 what kind of Administration in Turkmenistan
would the US want to work with?

We would like to see whatever administration the people of Turkmenistan
elect. The acting president of Turkmenistan has announced that there’ll
be presidential elections. May these elections be free and fair,
reflective of international standards.

Because like so many countries in the region the politics of
Turkmenistan is extremely complex, based on clan differences and all
sorts of other political differences that have been pushed beneath
the surface from 1991 and even before that, during the Soviet period.

So, the way politics played out in Turkmenistan is highly unpredictable
and from our own historical experience the way to maximize the
likelihood of political stability is to let political forces to
compete in a fair and transparent process, by rules that everybody
understands. We hope that’s what’s going to happen. We also look
forward to building cooperation between Turkmenistan and Azerbaijan
on a range of energy issues.

· Would you like to see the Trans-Caspian Gas Pipeline negations
restored?

We would love to see the Trans-Caspian Gas Pipeline put in place. We
would like to see Azerbaijan and Turkmenistan to come to an agreement
in demarcation of the boundary. So, this is yes to your question- we
would like to go beyond the restart of the negotiations. They key, of
course, is to make sure that whatever investments are considered will
be commercially viable and commercially attractive. I have a sense,
that it may be even easier today to come up with an investment scheme
that is commercially viable, because the infrastructure required to
move gas from Azerbaijan to European markets is already in place. So,
an incremental investment to build the Trans-Caspian Gas Pipeline is
easier to do.

· Mr Bryza, it’s been reported that Azerbaijan, Georgia and Turkey plan
to start construction of Kars-Akhalkalaki-Tbilisi-Baku railroad in May,
2007. This is a grand project that will connect China to Europe along
the ancient Silk Road route. However, we’ve witnessed a very strong
opposition to this project both in Congress and White House. President
George Bush signed a bill prohibiting financing of this railroad. Not
that the participating countries were expecting any money from US,
but still, can you explain the lack of US interest in this case?

Sure I can. I can’t speak on behalf of the president, but I would
caution our friends in Azerbaijan as well as in Armenia not to
misinterpret his signing whatever bill that this provision contained
in as s sign of active US opposition to Kars-Akhalkalaki-Tbilsi-Baku
railroad. We are all in favor of maximizing the transportation links
among all, and I emphasize, all of the countries along the East-West
corridor, that we’ve been trying to develop for some time. We’d love
to get to that point when railroad from Turkey to Baku could transit
Armenia, because, first of all, it’s part of our inclusive vision,
second of all, we simply assumed that using existing infrastructure
from Turkish border through Armenia into Georgia would make more
commercial sense. But that’s not our decision. We are not investors.

It’s up to the investors to come up with whatever investment scheme
that makes sense. If Azerbaijan, Turkey and Georgia decide to go
ahead with this railroad we are not opposing it at all, but we are
not promoting it actively. We hope there’ll be time soon when the
transit scheme will embrace all of the countries.

· The year 2006 in the Nagorno-Karabakh process- what are you thought
on that?

A year of an up and a down and an up again. Like on two humps of
the camel, but ending year on the top of the hump, rather than in
between. Beginning of the year there was great anticipation with
Rambouillet meeting in February, leading to the meeting in June in
Bucharest of the presidents. Neither of them played out to our hopes.

I made some statements with my fellow co-chairs about our
disappointments, in which we called upon president to show bold
leadership and improve the basic principles that the co-chairs had
proposed. I am happy to report that the presidents did do just that.

So, we can back up from that low of June 22nd up to the hump of the
camel where was a genuine momentum at the end of the year with solid
meeting between Presidents Aliyev and Kocharian in Minsk in early
December. Neither of the Foreign Ministers is soft. They are both
competing for their countries national interests, as is absolutely
appropriate. But they are respectful to each other. And we just hope
that this mutual respect will begin to resonate in the societies in
Armenia and Azerbaijan day after day as this process continues. We
end the year on a positive note. Adding to the positive elements
is the fact finding mission that took place in fire-affected areas
near the line of contact. That was an example of how potentially
controversial issue was transformed by the leadership shown by
Azerbaijan, Foreign Minister Mammedyarov, by your former Ambassador in
UN, now in Washington and by Foreign Minister Oskanian into positive
and significant cooperative endeavor, that clears the way hopefully
for more confidence building measures and more than a confidence
building measures – genuine trust that will stimulate momentum in
the settlement process.

· Is there any update on the report prepared by the OSCE fact finding
mission on the situation on the burned occupied Azerbaijani lands?

Since the holiday season I haven’t spoken to Mr. Soir who prepared the
report on behalf of the OSCE chairman in office. But when e we were
together at the OSCE ministerial early December, he told me the report
was just about finalized. I haven’t seen the final version yet. But,
I can tell you, I fully anticipate report containing a road map to
build on the cooperation to date, follow up with specific measures
to manage the consequences and prevent fires in the future.

That mere act of working together to perform those two acts is
important in changing the psychological climate that governs the
settlement of negations in a positive way. My fellow co-chairs and
myself hope to travel to the region may be end of this month or
February – it all depends on the availability of Presidents Aliyev
and Kocharian. But, we would like to make one more push over the next
couple of month to sustain the momentum that we felt at the end of the
year before the election campaign in Armenia really starts heating up.

· Thank you for talking to us.

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