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Turkmenistan: President Refuses To Sign Oil Pipeline Agreement

Boston, 4 November 1998 (RFE/RL) -- Turkmenistan's refusal to sign an oil pipeline agreement in Turkey last week may put it at odds with its neighbors and the United States. President Saparmurat Niyazov's decision not to participate in the pact for the Baku-Ceyhan pipeline highlights the problem of finding common ground among many regional interests.

The U.S.-backed agreement was signed in Ankara by Turkish President Suleyman Demirel with the leaders of Azerbaijan, Georgia, Kazakhstan and Uzbekistan. But when Niyazov was approached by Turkish Energy Minister Cumhur Ersumer, he declined to join in the accord.

The pact remains largely symbolic, because the Azerbaijan International Operating Co. has delayed its decision on a recommended route for a main export pipeline until at least Nov. 12. But the discord has put political differences on display and suggests trouble for any possible solution to the Caspian's problems.

So far, there have been two reasons given for Niyazov's dissent. The first reports quoted Niyazov as saying that his country is in the gas rather than the oil business, giving him a motive for staying out of the agreement on an oil route. Turkmenistan signed a separate deal with Turkey last week for the delivery of 16 billion cubic meters of gas per year that would presumably be carried by a trans-Caspian line.

But the argument that it has no oil interest seems weak in light of Turkmenistan's pursuit of Caspian offshore oil business and its deals with U.S.-based Mobil Corp. and Britain's Monument Oil and Gas. Turkmenistan has also announced that it is working with Kazakhstan on a north-south oil route through Iran to the Persian Gulf. In yet another contradiction, Turkmenistan announced this week that its oil production has risen to record levels of 20,000 tons per day.

A second report quotes Niyazov as saying that an Iranian oil route would be cheaper and more secure than the east-west pipeline plan. This reason also raises questions. If Iranian routes are cheaper and safer for oil, then why not also for gas?

There are likely to be at least three real reasons for Niyazov's action. The first is his country's geographical position. Turkmenistan shares the longest border with Iran among the interested parties, and it has become almost entirely dependent on its neighbor for its energy exports. The republic's long-held policy of neutrality is dictated simply by where it is.

Secondly, Ashgabat would benefit by selling its gas to Ankara sometime in the future. But it is not clear that the returns would be so great as to justify supporting Turkey's interests exclusively on the oil pipeline, particularly if they conflict with the current interests of Iran.

Part of the problem is a matter of competitive influence. Like Russia and Iran, Turkey occupies a geo-strategic position that makes it a gatekeeper to the region. But unlike Russia and Iran, it is a net energy consumer that depends on outside sources, rather than being an energy source itself.

That fact may make it impossible for Turkey to lead all participants toward a single policy that will be subservient to its own security interests. Such a dominant role has proved difficult enough for Russia in the CIS since the collapse of the Soviet Union. But even with U.S. backing, Turkey's influence at its strongest may still not equal that of Russia at its weakest in regional affairs.

The third issue has to do with the benefits of following the U.S. lead on the Caspian. So far, Turkmenistan can expect relatively little reward for signing onto the U.S. policy.

Because the plans for an east-west corridor are aimed at excluding Tehran, Washington has indefinitely delayed a decision on allowing Mobil to swap oil with Iran, making exports from Turkmenistan more difficult. Although U.S. Energy Secretary Bill Richardson has offered to mediate Turkmenistan's dispute with Azerbaijan over the Kyapaz-Serdar oil field in the Caspian, there is no sign that any such efforts have met with success.

Under the circumstances, it is little wonder that Turkmenistan has refused to endorse the Baku-Ceyhan project, which is so closely identified with the interests of Azerbaijan. After Turkmenistan's action, Azerbaijan President Heydar Aliyev announced a mission to Ashgabat to settle differences over the disputed oil field. But Turkmenistan's initial reaction has been cool.

While Azerbaijan's fortunes have grown, Turkmenistan's economy has withered since disagreements with Gazprom halted exports through Russia 19 months ago. U.S. policy has made the interests of Azerbaijan and Turkey high priorities, but it has shown less concern with the problems of Turkmenistan.

In addition to ruling out a role for Iran in Caspian oil access, the U.S. policy continues to discourage construction of an Iranian gas pipeline that would give Turkmenistan an alternate route for its energy exports.

All these factors make Turkmenistan less likely to support the U.S. agenda in the region. Unless greater incentives or flexibility become part of Washington's policy, it may have to consider a more limited east-west energy corridor without Turkmenistan.

(Michael Lelyveld is national correspondent for the Journal of Commerce. This analysis was written for RFE/RL)