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EURASIA INSIGHT

AZERBAIJAN: BAKU MUM ON WASHINGTON’S PROPOSAL FOR TURKMEN GAS DEAL

Mina Muradova 12/02/09

Washington presumably hopes that the gas would be shipped via the
long-planned 1,641-kilometer-long Trans-Caspian gas pipeline. The
route would funnel Central Asian energy to Azerbaijan, circumventing
Russia. [For background see the Eurasia Insight archive]. From there,
Turkmen energy would make its way to Europe along another long-planned
route, dubbed Nabucco. [For background see the Eurasia Insight
archive].

At a November 17 news conference in Ashgabat, Daniel Stein, senior
assistant to the US Special Envoy for Eurasian Energy Richard
Morningstar, stated that it might be possible to reach an agreement on
shipping natural gas across the Caspian Sea without first reaching an
agreement on the sea’s territorial boundaries. Talks on a
comprehensive Caspian pact have long been stalemated. [For background
see the Eurasia Insight archive].

After leaving Ashgabat, Stein traveled to Baku to meet with Foreign
Minister Elmar Mammadyarov on November 18. The Ministry of Foreign
Affairs in Baku has refused to confirm or to deny that Stein’s
proposal is under consideration by Azerbaijani leaders. "If such an
appeal is addressed to Azerbaijan, Baku will consider it, but I have
to stress that it requires the consent of the second side
[Turkmenistan], as well," spokesperson Elkhan Poluhov said.

In a November 26 interview with Izvestiya, Azerbaijani Deputy Foreign
Minister Khalaf Khalafov expressed an expectation that Azerbaijan and
Turkmenistan would follow a precedent set by Russia and Kazakhstan,
two countries that split stakes in disputed Caspian Sea offshore
fields on a 50-50 basis in order to resolve their own territorial
dispute.

Local analysts are skeptical that the US proposal can help make the
Trans-Caucasus pipeline become a reality. Turkmenistan has given no
indication that it is open to business with the West, believes Ilham
Shaban, head of the Baku-based Center for Oil Research. The failure of
Turkmen President Gurbanguly Berdymukhamedov to attend a November oil
and gas conference in Ashgabat "shows that their government does not
want to cooperate [with foreign investors] and no political guarantees
will be given," he said.

Azerbaijan can do little to change that situation and pressure
Ashgabat to settle the two countries’ differences, Shaban added.

Talks on how to divide up the Caspian Sea have been ongoing since the
collapse of the Soviet Union in 1991. Azerbaijan, Kazakhstan and
Russia want a 22-kilometer limit on territorial waters. Turkmenistan
and Iran consider the body of water to be a lake, which presupposes,
they argue, that its waters should be divided into five equal parts.

Talks between Azerbaijan and Turkmenistan on the topic intensified
after Berdymukhamedov came to power in late 2006. A proposal was
floated in 2008 for the joint development of disputed offshore oil and
gas fields, but the idea soon fell by the wayside. In July,
Berdymukhamedov ordered government lawyers to look into Azerbaijani
claims to three Caspian Sea fields and send their findings to an
unspecified international arbitration court.

Another Baku analyst believes Stein’s statement was intended as a
political nudge from Washington for Baku and Ashgabat to revisit the
territorial question. "Although it could be considered as a step
forward, I do not expect quick result and easy solution of the dispute
because Russia’s interests predominate in the region, [and it] itself
aims to deliver gas from the Caspian region to Europe," said Elkhan
Shahinoglu, the director of the Atlas Center for Political Research.

Foreign Ministry spokesperson Poluhov claims that "constructive talks"
continue with Ashgabat on how to define Caspian Sea boundaries "based
on international legal norms."

Editor’s Note: Mina Miradova is a freelance reporter based in Baku.