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Kazakhstan: Oil From Troubled Waters -- A Caspian Analysis

Prague, 4 June 1997 (RFE/RL) -- Azerbaijan's President Heidar Aliyev will next week visit the Kazakh capital Almaty, where he is expected to sign a deal allowing Kazakh oil to be transported through Azerbaijan. The agreement is one of a series of bilateral cooperation accords which the Azeri leader is reportedly signing with Kazakh president Nursultan Nazarbayev.

The feasibility of moving Kazakh oil to world markets through Azerbaijan was successfully tested earlier this year. The route is by barge across the Caspian, then onward by rail through Georgia to Batumi, then by barge again to Odessa.

This is a cumbersome route, and reports say Aliyev and Nazarbayev may announce plans to build a pipeline across the bed of the Caspian from Tengiz to Baku, which would link up with the systems leading west through Georgia.

The signing ceremonies are the obvious part of the visit. But an RFE/RL correspondent says that on a deeper level, Aliev's trip is part of the complicated game about the definition of the Caspian as a sea or a lake. Not only the states close to the Caspian are interested in that matter, since it has become clear that the Caspian area will be one of the main sources of oil in the 21st century. According to data provided by international consortiums working in the area, the Caspian region has about 15 percent of the world's researched resources of oil and gas, to say nothing about the resources still expected to be discovered.

After the collapse of the Soviet Union, three newly-independent countries became, with Russia and Iran, owners of Caspian Sea shores: namely Kazakhstan, Azerbaijan and Turkmenistan. International oil companies are eager to gain stakes in the oil industries in these newly-established countries, something which irritates both Iran and Russia. Because of its mentality developed over centuries, Russia still considers Kazakhstan, Uzbekistan and Turkmenistan to be within its own sphere of influence. Iran too sees itself as a major player in the area, taking into consideration her historic, ethnic and religious ties with Kazakhstan, Azerbaijan and Turkmenistan.

Both Moscow and Teheran view the Caspian as a lake, which would mean that its natural resources would belong jointly to all five Caspian states. Under treaties between the former Soviet Union and Iran dating from 1922 and 1940, the USSR and Iran can jointly use all the resources of the Caspian, and Moscow would like a new treaty superceding these two accords. A new document would have all five littoral states affirming support for joint exploration of the Caspian's central waters beyond 45-mile wide strips of territorial waters.

But Kazakhstan and Azerbaijan insist that the Caspian is a not a lake but a sea, and therefore has to be divided into exclusive sectors, which must be distributed among the Caspian states according to the length of their coastal areas. Turkmenstan used to share that point of view, but has vacillated in recent years between the two opposing positions.

International experts say that if the lake definition favoured by Russia and Iran is adopted, Kazakhstan will lose about 1,000 million tons of oil and 1,000 million cubic meters of natural gas. Azerbaijan and Turkmenistan could lose even more than that. In the case of the Azeri-Kazakh sea definition winning out, Russia and Iran could lose around 5,000 millions tons of oil.

Both Aliyev and Nazarbayev, as experienced politicians, will be very careful with any statements or agreements about the Caspian in order not to irritate the Russian bear and the ultra-islamists of Iran.

The newly emergent countries tend to view the continuation of cooperation between Iran and Russia as a shadow over their own independence. And Russia's interest in the region is strengthened by the knowledge that its oil production complexes in Siberia are in a very bad condition. Moscow realises that the international oil giants are more interested in the new oil markets of the former Soviet Republics in Caucasus and Central Asia, ignoring the dilapidated Russian oil sector, which needs much investment to be revived.

All this adds up to the likelihood that continued Russian political and economic pressure will in the future count as a continuing obstacle for Azerbaijan, Kazakhstan and Turkmenistan on their way towards the real independence.