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Turkmenistan: Caspian Oil Interests Face Hard Choices In Iran-Russia Dispute

  • Michael Lelyveld

In the negotiations over dividing the Caspian Sea, Turkmenistan may now hold an influential vote in the controversy between Russia and Iran. Our correspondent, Michael Lelyveld, says both countries may soon offer favorable terms for Ashgabat's oil and gas, posing a difficult choice.

Boston, 17 January 2001 (RFE/RL) -- A flurry of diplomatic activity between Iran and Russia over division of the Caspian Sea could lead to a bidding war between the two countries for the resources of Turkmenistan.

After a week of friction, Russia's Caspian envoy, Viktor Kalyuzhny, met over the weekend with officials in Tehran to find some way of furthering negotiations over how to define the Caspian's borders and share its oil wealth.

The meetings seem to have cooled some of Iran's anger over Russian President Vladimir Putin's visit to Azerbaijan and a Caspian cooperation pact between the two countries last week. Tehran had reminded Moscow that the only existing legal basis for dividing the Caspian were treaties signed by Iran and the Soviet Union in 1921 and 1940.

An even greater source of discord were reports of Russian naval war games staged in the northern Caspian at the same time, raising concerns that the purpose of Moscow's plan to keep the Caspian surface in common is to ensure a right to project its military power. Last week, Iran told Russia that there was "no threat in the Caspian Sea to justify the war games." The incident also served as a reminder that relations with Russia, which recently pledged to renew arms sales to Iran, continue to be complex.

But the Kalyuzhny visit may have lightened the tone of public discourse, at least temporarily. Andrei Urnov, head of the Russian Foreign Ministry's working group on the Caspian, called a first round of talks over the weekend constructive, "although difficult." Urnov said a second round on Sunday "was held in a constructive and benevolent atmosphere."

The outcome of the two meetings was hope that working group meetings would be held in Tehran as a prelude to a summit of deputy foreign ministers in Ashgabat in late February or early March. The Russian side cited unspecified points of progress with Iran, which has insisted on an equal 20 percent share of the Caspian instead of the Russian formula of dividing only the seabed into national sectors.

Kalyuzhny also told Agence France Presse that Iranian President Mohammed Khatami agreed to visit Moscow on March 19. The official Iranian news agency IRNA did not immediately confirm the report. The Russians hope that Khatami will sign some sort of Caspian pact during the trip.

Publicly, Russia has given assurances that there can be no Caspian solution without a consensus that includes Iran's acquiescence. But at the same time, it has tried to maneuver Iran into a position that makes its refusal more difficult. While diplomatic contacts serve a purpose, Moscow's primary strategy has been to isolate Iran by signing separate bilateral accords with Kazakhstan and Azerbaijan.

Last week, Putin hinted that another such deal could be in the works with Turkmenistan, which has repeatedly backed Iran's stand. The two countries are the only littoral nations without major offshore discoveries in the Caspian so far.

Turkmenistan's position as a "swing" vote on the Caspian question could make it an object of courtship in the next month. Both Russia and Iran are considering gas deals with the country. On January 1, Ashgabat stopped delivering gas to Russia because Moscow refused to pay a price increase.

Russia may be able to further its case on the Caspian by agreeing to pay the modest increase now. It could create an even bigger incentive by renewing talks on a 30-year deal to import up to 50 billion cubic meters of Turkmen gas annually, as Putin proposed last August.

Iran has also started talking again about increasing its gas imports from Turkmenistan. Last week, an Iranian official said that talks were underway on boosting the capacity of a pipeline between the two countries to 13 billion cubic meters from 8 billion cubic meters per year. Turkmenistan exported only about 2 billion cubic meters of gas to Iran last year.

Turkmenistan is eager to find a route for its gas to Turkey, whether through Russia or Iran. After delaying a decision on a trans-Caspian pipeline through Azerbaijan, it has now been left with no route at all.

Iran and Russia have also been competing for Turkmenistan's oil. Last week, Iran signed a $150 million contract with China's Sinopec oil company for a port and refinery project to handle Caspian oil. The plan relies on getting crude from Turkmenistan and Kazakhstan for swaps through the Persian Gulf.

But the Russian company Yukos has recently shown an interest in the Turkmen oil for its own refinery in Samara. If it pursues the idea, Russia and Iran could be competing for both Turkmen oil and gas.

The attention could give Turkmenistan a short-term advantage in seeking favorable terms from both sides in the next month before a Caspian summit in Ashgabat. But choosing between Iran and Russia could prove to be sensitive, particularly if the Caspian dispute continues. Both of Turkmenistan's suitors are powerful, and neither is likely to take disappointment lightly.

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