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Caucasus/Central Asia: Will Petroleum Divide Or Unite Caspian Nations?

Disputes among Caspian nations may dash hopes for regional cooperation. But countries that have already developed strong bilateral ties seem likely to prevail. Our correspondent Michael Lelyveld looks at the issues.

Boston, 7 March 2000 (RFE/RL) -- More than five years since the signing of the first Caspian contract, it is still unclear whether petroleum will drive the nations of the region toward common goals.

Events of the past week suggest that oil and gas may instead play a divisive role in the Caucasus and Central Asia, particularly if Azerbaijan and Turkmenistan cannot settle their differences over a trans-Caspian pipeline.

Last week, Turkmenistan President Saparmurat Niyazov let it be known that he will skip a summit of Turkic countries in Baku next month because of a "busy working schedule," the Interfax news agency reported. Regional leaders may well be watching Niyazov's public events on April 6 and 7 for a sign of what he considers to be more important business.

One possible interpretation is that Turkmenistan's president may wish to slight Azerbaijan because of their dispute over transit terms for the trans-Caspian gas line. Another possibility is that Niyazov may not want to risk a similar slight over the issue if he visits Baku.

Whatever the reason, Niyazov has chosen to set his country apart at the first major regional gathering since November 18, when pipeline agreements were signed at the OSCE security summit in Istanbul.

In nearly four months since the summit, little has happened to advance either the trans-Caspian gas line from Turkmenistan or the Baku-Ceyhan oil line from Azerbaijan. National demands have blocked progress on both projects.

Azerbaijan has claimed half the capacity of the trans-Caspian line as a condition of transit, even though it has announced plans to deliver its own gas to Turkey through existing lines. Meanwhile, Azerbaijan has been stalled on Baku-Ceyhan because of Georgian demands for higher transit fees and a share of the oil.

Last month, Azerbaijan became so impatient with Georgia that it reportedly declined to send a delegation to Istanbul for talks on the problem, until it was persuaded to do so by Washington. The delay in negotiations has taken so long that the schedule for "main flows" of oil from the Azerbaijan International Operating Company have been pushed back from 2004 to 2005, Interfax reported last week.

But so far, Azerbaijan has not allowed its disagreement over a pipeline to wreck overall relations with Georgia. Last week, President Heidar Aliyev issued a decree awarding the country's highest honor, the Istiglal order, to Georgian President Eduard Shevardnadze, recognizing his contributions to bilateral ties.

Perhaps the reason for the continued closeness between the two countries, despite frictions, is that energy routes have already developed. Most of Azerbaijan's oil already moves through Georgia by either pipeline or rail. If Azerbaijan does pipe its gas to Turkey through existing lines, those deliveries will also be through Georgia. Bilateral interests are larger than the Baku-Ceyhan line.

Ties have not developed in the same way between Azerbaijan and Turkmenistan. Although Turkmen oil passes through Azerbaijan by rail, the two countries have feuded over the ownership of a Caspian oilfield. Turkmenistan's vital interest is in exporting its huge reserves of gas. Disagreement between the two countries may become bitter and deep. Turkey has so far found it difficult to bring the rival neighbors together by appealing to commonalities. As the region's largest energy buyer and western outlet, Ankara has found it hard to balance its interests in a way that will please both Turkmenistan and Azerbaijan.

So far, Turkey has not pressured Azerbaijan to ease its claims to the trans-Caspian pipeline. Its geographical closeness to Azerbaijan means that it may ultimately rely on Baku as a major source of gas. In the same way, Azerbaijan will depend on Turkey as its outlet for oil.

But Turkmenistan has so far been unable to develop similar interlocking interests with its neighbors. The latest dispute with Azerbaijan is likely to delay development of such ties. Instead, Ashgabat has tried to reach out in other directions.

Last month, it began talks with Gazprom on increasing gas exports to Russia. Over the weekend, Turkmen Foreign Minister Boris Shikhmuradov visited Pakistan in an effort to restart a long-delayed project to pipe gas through Afghanistan.

But it is unclear whether these attempts to export in other directions will prove to be an effective substitute for cooperation in the Caspian region. Azerbaijan seems to have calculated its moves carefully, so that neighbors like Georgia and Turkey will find its interests difficult to ignore.

By contrast, Turkmenistan remains isolated and disengaged with its neighbors. Its strategy may now be more dependent on Russia and less successful. Skipping next month's meeting in Baku is unlikely to help.