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Caspian: Baku-Ashgabat Thaw Could Have Energy Impact

  • Bruce Pannier --> View of the Caspian from outside Baku (epa) Plans have existed for more than a decade to build trans-Caspian pipelines to bring oil and gas to markets in Europe -- and lessen Western dependence on Russian supply routes. Cool relations between Baku and Ashgabat, among other problems, have prevented those blueprints from becoming reality.

But an intriguing relationship is emerging around the Caspian Sea -- one that could have far-ranging implications for Europe's hopes of diversifying the source of its gas and oil supplies.

Relations between Turkmenistan and Azerbaijan -- countries on the Caspian's eastern and western shores, respectively -- are warming up after a deep freeze that has lasted more than a decade. The Azerbaijani government has even indicated that it would be willing to proceed with Ashgabat on building a trans-Caspian pipeline.

With encouragement from the energy-hungry European Union and the United States, envoys from Azerbaijan and Turkmenistan have now kicked off five days of meetings in Baku to follow up on successful energy and diplomatic talks they held in mid-January. The talks this week are expected to focus in particular on their Caspian maritime border -- an issue that, if resolved, would remove a key obstacle to implementing any trans-Caspian pipeline project.

An EU delegation, meanwhile, was also in Baku this week. "One of the essential items of our agenda certainly is also energy security," Slovenian Foreign Minister Dimitrij Rupel, whose country holds the rotating EU Presidency, said in the Azerbaijani capital on February 4. "We are encouraging relations, contacts, and agreements not just between the EU and Azerbaijan but also between Azerbaijan and Turkmenistan." Rupel added that Turkmenistan is key to any new pipeline project.

Accompanying him was EU External Relations Commissioner Benita Ferrero-Waldner, who emphasized the participation of other Central Asian states in the project: "We have a memorandum of understanding already with...Azerbaijan, we have one with Kazakhstan, we are going to Turkmenistan together also as a troika. So things are moving and they are certainly moving in the right direction, but of course it will have to be decided at the right moment in which way this is being done in detail."

'New' Faces

Why the Caspian climate change? One reason is Gurbanguly Berdymukhammedov. The Turkmen president took over after the death in December 2006 of Saparmurat Niyazov, whose bizarre reign ensured Ashgabat's regional isolation for more than 15 years.

Berdymukhammedov has taken steps to end that isolation, forging a "multivector" foreign policy open not only to Russia but also to the West and China. Though the Turkmen government has played down hopes of a revived trans-Caspian project, the warming relations between Ashgabat and Baku were underscored again last week with the announcement that Berdymukhammedov would travel to Azerbaijan before summer -- the first Turkmen president to do so in more than 10 years.

In Baku, an earlier leadership change might well have helped smooth over past differences with Ashgabat, with President Ilham Aliyev succeeding his father, who died in December 2003.

Nurmuhammet Hanamov, a former Turkmen ambassador to Turkey, is the founding chairman of the opposition Republican Party of Turkmenistan in exile. Although an opponent of the Turkmen government, he tells RFE/RL's Turkmen Service that Berdymukhammedov's fresh approach to Azerbaijan opens new doors for energy projects.

"Since he has come to power, Berdymukhammedov has strived to make relations with neighboring countries closer than before," Hanamov says. "For example, recently the most disputed issue between Turkmenistan and Azerbaijan -- the Caspian deposits issue -- has been discussed. It is a positive development. Through dialogue all issues can be solved, so we hope that the solution of disputable issues with Azerbaijan will lead to the realization of the trans-Caspian pipeline project."

Nazar Suyunov, a former Turkmen oil and gas minister who now lives in exile, agrees that the new cooperation between Azerbaijan and Turkmenistan brings new possibilities and hopes for the people of both countries as well as energy consumers in Europe. "For Turkmenistan, from an economic point of view and from a political point of view, this [oil and natural-gas pipeline] is advantageous," Suyunov says.

Suyunov credits the policies of Berdymukhammedov for bringing about change. He says that plans for pipelines between Turkmenistan and Azerbaijan were drawn up not long after both countries became independent in late 1991, but that political differences developed between the two countries that caused those plans to remain on the shelves until now.

Turkmen-Azerbaijani relations first deteriorated over ownership of a Caspian hydrocarbon field that both claim. Called Kyapyaz by the Azerbaijanis and Serdar by the Turkmen, the field could contain some 80 million barrels of oil and 32 billion cubic meters of natural gas, according to some estimates. Azerbaijan in the past vowed to commence work there with Ashgabat threatening to take Baku to international court and even the United Nations.

Now, that seems like ancient history.

Easier Said Than Done

Turkmenistan lies directly across the Caspian from Azerbaijan -- just 250 kilometers from Turkmenbashi City to the Azerbaijani capital, Baku -- and represents one of the shortest routes for the numerous proposed trans-Caspian oil or natural-gas pipelines.

Azerbaijan is already part of the Baku-Tbilisi-Ceyhan oil pipeline, one that oil-rich Kazakhstan -- which is on the eastern shore of the Caspian Sea -- has already expressed great interest in joining. Kazakhstan and Turkmenistan, which share a border, are already working with Russia on a natural-gas pipeline along the northeastern shore of the Caspian. Yet another gas pipeline project to China originates in Turkmenistan and transits Kazakhstan.

Kazakh gas and oil could just as easily travel through Turkmenistan and then across the Caspian toward Europe and at the same time avoid going through Russia or Iran.

Deputy Azerbaijani Foreign Minister Khalaf Khalafov, who participated in January 17 talks in Ashgabat, tells RFE/RL's Azerbaijani Service that cooperation with Turkmenistan is important, as is a diversification of reliable energy export routes. Khalafov says Baku is ready to participate in more energy-export projects: "But our position is that every state which has the intention or is interested in exporting its oil and gas to world markets should launch that initiative by itself. If there is such an initiative, other countries can join those projects. In this case, Azerbaijan can play its role in such projects."

Khalafov says energy exports to Europe have improved Azerbaijan's relations with the European Union, something that could have a similar effect for Central Asian states.

Meanwhile, Washington is playing its own role. Ashgabat over the past year has become a key stop for U.S. diplomats. Steven Mann, the State Department's senior adviser for Caspian Basin energy diplomacy, was in the Turkmen capital last week. In an indication of just how much the regional balance seems to be shifting, Iran this week expressed displeasure with Turkmenistan over an energy dispute and with Baku's warming ties with the United States.

"The expansion of the U.S. presence in Central Asia, in particular in Turkmenistan, also can be unfavorable for this country's bilateral relations with its neighbors and other countries of the region," Radio Gorgan, an Iranian state radio station, reported on January 30.

One sign of how far and how easily the new Turkmen-Azerbaijani relationship can proceed with any joint plans will come this September, when Baku is expected to hold the third Caspian Sea state summit.

When the leaders of Russia, Iran, Kazakhstan, Azerbaijan, and Turkmenistan met in Tehran in October, they agreed that one or more parties would undertake no large projects without consulting all of the other littoral states. But analysts call that pledge vague.

Just how vague could be determined by whether Baku and Ashgabat finally move forward with their own trans-Caspian plans.

(Director Kenan Aliyev and Rovshan Gambarov of RFE/RL's Azerbaijani Service and Turkmen Service Director Oguljamal Yazliyeva contributed to this report.)

Caspian Energy Special

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HOW MUCH OIL? The U.S. Energy Information Administration has estimated that the Caspian could hold between 17 billion and 33 billion barrels of proven oil. ("Proven reserves" are defined by energy experts to be 90 percent probable.) Other experts estimate the Caspian could hold "possible reserves" of up to 233 billion barrels of oil. ("Possible reserves" are considered to be 50 percent probable.) By comparison, Saudi Arabia has 261 billion barrels of oil and the United States 23 billion...(more)

See also:

Economic Forecast For 2006 Sees Growth, But Danger In Continued High Oil Prices

How Vast Are The Riches In The Caspian?

Experts Envision A Future Beyond Oil