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Qishloq Ovozi

A man walks in front of oil derricks on the Caspian Sea near the Azerbaijani capital Baku.

The Caspian seabed contains some of the largest reserves of oil and natural gas in the world. And if one adds the hydrocarbon wealth present onshore in the Caspian littoral countries -- Azerbaijan, Kazakhstan, Turkmenistan, Iran, and Russia -- the volumes are staggering.

However, to send energy resources from the Caspian Basin to world markets requires cooperation and with all five countries hoping to export their oil and gas it is not surprising that agreement is often difficult to reach. The politics of Caspian energy exports is complicated and there is a good deal of hypocrisy involved.

To examine the Caspian conundrum, RFE/RL assembled a Majlis, or panel, to discuss the politics of the region, who is exporting, who is not, and why this is so.

Moderating the discussion was RFE/RL Media Relations Manager Muhammad Tahir. From Carlton University in Ottawa, Canada, energy expert Robert Cutler joined the discussion. From Britain, independent journalist, former deputy director of RFE/RL’s Iranian service (Radio Farda) Hossein Aryan also took part. Participating from Washington was Luke Coffey, the director of the Allison Center for Foreign Policy Studies at The Heritage Foundation. And I was in New York City from where I contributed a few comments of my own.

The Caspian littoral states’ working group held a session in Tehran on October 23-24. It was the 47th session of the working group over the course of some 20 years and, once again, delegates left the meeting with little to show, vowing to meet again soon.

Sea Or Lake?

The main sticking point remains the legal statues of the Caspian Sea. Is it a sea or a lake? It makes a big difference, particularly for Iran as Coffey explained.

“Iran is dead set on the Caspian Sea [being declared] a lake because under the terms of the law of the Sea they would only get about 13 percent of the water whereas [if it were declared a lake] they want an equitable 20 percent,” he said.

That is not just 20 percent of the water and seabed, it is a 20-percent share in the riches of the Caspian Sea.

Coffey added that the portion of the Caspian that is in Iran’s sector “is the deepest, I think it holds almost two-thirds of the volume of the water in the Caspian, so in terms of extracting oil and gas resources it’s very difficult.”

Technically none of the countries should be developing oil and gas fields until all five states agree on the legal status of the Caspian.

But, as Aryan pointed out, “68 or 70 percent of the Caspian has already been divided, between Russia, between Kazakhstan, between Azerbaijan, and also between Turkmenistan and Kazakhstan, so it only leaves something like 30%, which is [in the area of] Iran, Azerbaijan, and Turkmenistan.”

And there is a lot of extraction already taking place.Azerbaijan’s Shah Deniz 1 project has been supplying oil to the Baku-Tbilisi-Ceyhan [BTC] pipeline, which has been carrying that oil to Turkey’s Mediterranean coast for export for some 10 years now.

Artificial islands at the Kashagan offshore oil field in the Caspian Sea. Kazakhstan only recently restarted production in this field in October after it had been shut down when undersea pipes cracked and leaked into the surrounding water.
Artificial islands at the Kashagan offshore oil field in the Caspian Sea. Kazakhstan only recently restarted production in this field in October after it had been shut down when undersea pipes cracked and leaked into the surrounding water.

Joint Ventures

Other littoral countries have been developing their offshore sites also. And Cutler noted, “As part of the Russian-Kazakh agreements for the division of their mutual boundaries… the two countries have cooperated and continue to cooperate on a number of joint ventures to exploit deposits that are on, or near the boundary of that so-called modified median line in the Caspian offshore.”

This sort of cooperation is apparently not possible for all the Caspian littoral countries.

Azerbaijan and Turkmenistan have for around two decades been discussing the construction of an undersea pipeline to bring some 30 billion cubic meters of Turkmen gas annually across the Caspian where it could be loaded into pipelines heading to Turkey and on to Europe. The Trans-Caspian Pipeline (TCP) is included as part of the European Union’s Southern Corridor strategy to diversify its gas import markets in order to avoid becoming overly dependent on supplies of oil and gas from Russia.

Iran and Russia oppose this project, ostensibly because of environmental concerns.

Cutler pointed out, “When Russia built the Blue Stream pipeline under the Black Sea to Turkey and when it talks about the Turkish Stream pipeline, nobody, and not Russia, really discusses the environmental and ecological issues which seem to come to the fore rhetorically when Caspian affairs are the subject of discussion.”

And Cutler added, “There’s so much more experience with constructing and managing these sorts of pipelines in the last 20 years that it really shouldn’t be an issue and it is not a technical issue, it is a political issue.”

Russia’s Interests

Coffey echoed that saying, “It’s in Russia’s interests that this matter [the legal status of the Caspian] remains unsettled. This makes it more difficult for the Trans-Caspian Pipeline to ever be realized and it means that there’s one less alternative available to Europe that bypasses Russia.”

Underscoring the point that it is only the TCP that raises objections, Cutler drew attention to “an oil pipeline between Kazakhstan and Azerbaijan, which they’ve been discussing for 10 years and which they again recently, just last month signed yet another accord for the intention to build.”

So far, none of the other Caspian states have raised any objections to that proposed pipeline, nor did any of them complain when Kazakhstan’s offshore Kashagan field started production in September 2013 only to be quickly shut down when the undersea pipes cracked and leaked into the Caspian Sea. After replacing those pipes, Kashagan just restarted production in October.

In the absence of any common agreement on the Caspian’s status there is really only one thing that counts, as Aryan, who served for some 18 years in Iran’s navy explained. “Russia has the largest navy, nearly 150 vessels, most of the exercises and drills conducted by Russia in the Caspian Sea are far beyond the agreements reached between the states with regard to maintaining security, fighting smugglers, search and rescue.”

That includes firing cruise missiles from Russian ships in the Caspian Sea at targets inside Syria earlier this year, a move that was not necessary from a military point of view, but one that sent a message to the other littoral states about who is ultimately in charge of the Caspian Sea.

This was an intense discussion that covered these topics in greater detail and addressed other issues on the complicated situation in the Caspian:

An audio recording of the Majlis can be heard here:

Majlis Podcast: The Politics Of Caspian Energy
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Listen to or download the Majlis podcast above or subscribe to Majlis on iTunes.

Turkmen President Berdymukhammedov on an Akhal-Teke horse he was gifted at a military parade in Ashgabat on October 27, 2016.

Turkmenistan marked its 25th year of independence on October 27 and -- while life has always been hard for the some 5 million people in the isolationist, authoritarian state -- this year’s anniversary was marked amid declining economic conditions the likes of which the country has never seen.

The situation did not have to be like this.

To review 25 years of independence in Turkmenistan, what went wrong and why, RFE/RL assembled a Majlis, or a panel, to discuss the evolution of the country.

Moderating the discussion was RFE/RL Media Relations Manager Muhammad Tahir. Participating from Washington was Victoria Clement, a research scholar at the Woodrow Wilson Center. Two veteran “Majlismen,” both leading authorities on Turkmenistan, also joined. From Scotland, Dr. Luca Anceschi, lecturer in Central Asian Studies at the University of Glasgow, took part and, from further east, in Europe, Ruslan Myatiev, chief editor of the Alternative Turkmenistan News website, participated. And I, of course, had a few things I wanted to contribute to the conversation.

Myatiev remembers the first days of independence when he was a child.

“My earliest memory of Turkmenistan’s independence is huge crowds of people standing in line to buy bread, to buy flour, and other basic products,” he recalled.

That actually did not last for too long. Anceschi pointed out that “Turkmenistan was the biggest winner of the former U.S.S.R. When it came to adjust the prices of [natural] gas from the Soviet prices to the market prices, statistics showed Turkmenistan was one of the states that benefited the most from the adjustment of the price system.”

Turkmenistan has the world’s fourth-largest reserves of natural gas.

A Turkmen boy at an official launch ceremony for the East-West gas trunk pipeline in Shatlyk on May 31, 2010.
A Turkmen boy at an official launch ceremony for the East-West gas trunk pipeline in Shatlyk on May 31, 2010.

While the other “Newly Independent States” that emerged from the disintegration of the Soviet Union struggled through early years marked by hyperinflation and ever-shifting domestic and foreign policies, Turkmenistan settled down, propped up by its gas exports, and was able to not only maintain relatively low prices for basic goods but also offer its citizens free water, gas, and electricity.

The president at the time, Saparmurat Niyazov, predicted a great future for his country. Clement said “Niyazov believed a lot of the rhetoric that he spouted, whether it was that there was going to be a computer in every house, a car in every garage, or that Turkmenistan was going to be a second Kuwait.”

But cracks started to appear early.

Anceschi said, “A pivotal moment…was when Niyazov dismissed Avdy Kuliev, the first foreign minister, in 1992. When he did that he assumed control of the foreign policy and from then on there was a decline into this neutrality, a synonym for isolation, [and] a very passive foreign policy.”

Turkmenistan started to fence itself off from the outside world. Then, on December 12, 1995, the United Nations granted Turkmenistan’s request to be given status as a neutral country. Records of the decision indicate granting that status made little difference to the UN officials who approved the move, but it made an enormous difference for the Turkmen government.

The infamous golden statue of late President Saparmurad Niyazov in Ashgabat.
The infamous golden statue of late President Saparmurad Niyazov in Ashgabat.

It became much more difficult to foreigners to get into Turkmenistan and for citizens of Turkmenistan to leave the country.

An antigovernment protest in Ashgabat in July 1995 that the government claimed was organized by “drug addicts” turned out to the last real protest in Turkmenistan to date. The rights situation plummeted. The Turkmen government, sheltered behind UN-recognized neutrality, ignored outside criticism of rights abuses.

And then, it got weird. As Myatiev explained, “In 2001 [there was] the release of [his book] Rukhnama, which was supposedly the milestone for the revival of the Turkmen nation, of the Turkmen language, culture, celebrations.”

Rukhnama was allegedly authored by Niyazov. It became the mandatory spiritual guidebook for the country. It was taught in schools.

And as Myatiev noted, “For the nonethnic Turkmen population of Turkmenistan this was one of the symbols that it’s not going to get any better.”

In late November 2002, there was an assassination attempt on President Niyazov.

Clement was living in Turkmenistan at the time. She said, “The effects of [the assassination attempt] were to increase the isolation of the country because outsiders were implicated, or people who had been living outside of Turkmenistan were implicated in this.”

Niyazov died in December 2006. His successor was Gurbanguly Berdymukhammedov, the country’s health minister whose most notable achievement in that post was dismantling the country’s regional health-care system.

Berdymukhammedov seemed to be off to a promising start. He undid some of the damage done under Niyazov’s leadership from the renaming of the days of the week and the months, to restoring the health-care system and reinstituting a 10-year mandatory education program that Niyazov had cut back to nine years. Myatiev said the latter was especially important since universities outside Turkmenistan, such as in Kyrgyzstan where Myatiev studied, required incoming students to have a 10-year education in order to be admitted.

But Berdymukhammedov gradually started to look more like Niyazov.

Myatiev recalled: “When Niyazov died I was in Kyrgyzstan but the following summer (2007) I went back to my homeland for the summer break and it was quite noticeable, the portraits of Niyazov were replaced by the portraits of Berdymukhammedov, the new slogans of the new era emerged also.”

Another pivotal moment came in 2011. With gas prices rising on world markets and new fields providing increased volumes for export, Turkmenistan finally opened a third major pipeline, to China. Turkmenistan was already shipping a modest amount of gas to Iran and was in the midst of a serious dispute over price for supplies to Russia, until then Turkmenistan’s biggest customer. China was willing to buy more Turkmen gas than Russia ever had, more than Russia and Iran together.

Turkmenistan “opened that pipeline to China,” Anceschi said, “and [Berdymukhammedov] got confused with investment and made sure that [gas] was the single source of revenue that the country had.”

Rukhnama has since been replaced by Berdymukhammedov's books in the nation's libraries.
Rukhnama has since been replaced by Berdymukhammedov's books in the nation's libraries.

The country is now suffering from this decision. Gas prices are less than half what they were a few years ago with no sign that prices will ever reach the record highs they climbed to in the immediate years after that first pipeline to China started operation.

The economy in neutral/isolated Turkmenistan appears to be in shambles. There are reports of mass layoffs, unemployment over 50 percent, of lines outside state stores that sell basic goods, with those goods being available only in rationed portions.

The discussion explored these issues in greater detail and looked at other missed opportunities as well as some of the things that have worked during the last 25 years.

An audio recording of the Majlis session can be heard​ here:

Majlis Podcast: Turkmenistan Turns 25
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Listen to or download the Majlis podcast above or subscribe to Majlis on iTunes.

The views expressed in this podcast do not necessarily reflect the views of RFE/RL

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About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change.

Bruce Pannier
Bruce Pannier

Content draws on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad.

The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.



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