RETHINKING AZERBAIJAN
By Borut Grgic
European Voice
/05/rethinking-azerbaijan/64842.aspx
May 8 2009
In terms of energy, Azerbaijan is the partner that Europe needs
the most.
Today’s (8 May) meeting in Prague on the ‘Southern Corridor’ – the
pipelines that will bring gas and oil to Europe – produced a decent
result, though still missing are agreements on a transit regime with
Turkey and on the volumes to be sold on the European market. The key
lies in Azerbaijan.
The EU has never been particularly in tune with Azerbaijan’s strategic
importance, making no real distinctions in its approach to the southern
Caucasus. But as far as energy is concerned, Azerbaijan is the partner
that Europe needs the most.
Azerbaijan is an energy producer, with oil already flowing to the
international market via the Baku-Tbilisi-Ceyhan (BTC) pipeline. And
the country has substantial volumes of natural gas ready for export. In
fact, the volumes are proving larger than initial projections, which
means that Azerbaijan could soon send even more gas to southern and
eastern parts of Europe, provided the southern gas corridor to Europe
is built.
Azerbaijan is also important as a transit country for gas from
Turkmenistan. Since the change of government in Ashgabat in 2006,
Europe has been buzzing about Turkmenistan and its gas potential. The
country’s proven and unproven reserves are enormous, which is also
confirmed by the interest expressed by Russia, China, India and
Iran. But, so far, Turkmenistan is refusing to sell its gas beyond
its borders. This means that it will be European and Azeri money
that will have to be invested in connecting the gas pipeline under
the Caspian Sea to allow Turkmen gas to flow west.
In order to realise its southern gas corridor, Europe will need gas
from both Azerbaijan and Turkmenistan. Without the Turkmen gas the
best hope for bringing Caspian gas to the EU is a pipeline connecting
Azerbaijan, Turkey, Greece and Italy. So far it has been Azerbaijan
that has most diligently and systematically pursued this option.
Despite this, Azerbaijan’s relations with Europe are not
blooming. Never mind the niceties exchanged between the EU and
President Ilham Aliyev last month in Brussels, Azerbaijan’s frustration
with Europe is multifarious. The biggest disappointment is the lack
of support from Europe in Azerbaijan’s dispute with Armenia over
Nagorno-Karabakh.
The official EU position is a careful balance between the interests
of Armenia and Azerbaijan. Baku is asking the EU to acknowledge the
Armenian occupation of Azerbaijani land and demand that Armenia pull
its troops out, something the EU has so far refused.
Recent developments in Georgia – last year’s war with Russia and the
subsequent declaration of independence by both South Ossetia and
Abkhazia – has made Azerbaijan even more nervous about the future
status of Nagorno-Karabakh.
But unlike Georgia, Azerbaijan has not made relations with the EU and
NATO its key foreign policy priority. In fact, Baku’s foreign policy
has been a sober balancing game: keeping close relations with Russia,
Iran, Europe, the US and Turkey, as well as with countries on the
east coast of the Caspian.
Up for grabs Azerbaijan’s multi-vector policy also means that
its energy is up for grabs. But Europe is not the only custumer
around. Both Russia and Iran have made concrete offers for Azeri gas
and are ready to pay the EU market price for it.
It would be in keeping with Azerbaijani multi-vector foreign policy
strategy if Baku were to sell some of its gas to Russia, some to
Iran and some to Turkey. It could also decide to sell some direct
to European buyers such as Greece and Italy. Under this scenario,
the trans-Caspian option will also become less relevant, which means
there will be no Turkmen gas for Europe either.
As Azerbaijan gets neither special benefits, nor a better price for
selling its gas to Europe, the benefits for signing up to the Southern
Corridor project do not match the costs associated with undermining
its strategic relations with Iran and Russia.
Baku would be shortsighted to give in to the EU’s wishes on gas
without Brussels sweetening the offer, including increasing the
political support for Azerbaijan in its dispute with Armenia over
Nagorno-Karabakh.
Borut Grgic is the founder of the Institute for Strategic Studies.
From: Emil Lazarian | Ararat NewsPress
