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Azerbaijan: Caspian Sea Accord With Russia Considered

Azerbaijan has been facing heavy political pressure from the north and the south as it considers an agreement for a legal division of the Caspian Sea. Russia is counting on signing a bilateral deal with Baku, but an Iranian delegation also paid a surprise visit last week to press Tehran's case. RFE/RL's Michael Lelyveld files this assessment.

Boston, 27 November 2000 (RFE/RL) -- Recent reports of a possible agreement between Azerbaijan and Russia on a legal division of the Caspian Sea seem to show little appreciation for the political pressure that has been brought to bear on Baku.

Russian and Azerbaijani officials confirmed earlier this month that they are nearing a common position on the Caspian issue, as Moscow pursues its drive for a settlement among the five shoreline states. An expected pact on cooperation could tip the balance toward Russia's formula for dividing only the Caspian seabed into national sectors. Kazakhstan has already endorsed the plan, leaving only Iran and Turkmenistan opposed.

In an editorial last week, the Financial Times hailed the anticipated bilateral agreement as "welcome" and a "symbolic step forward." Oil companies have been hoping for a resolution of the Caspian division issue because of concerns about possible legal challenges to development. But recent events have raised questions about whether Azerbaijan's assent is being given under stress or duress.

During the past week, the government of President Heidar Aliyev has suffered nationwide protests against recent parliamentary elections and the lack of basic services such as heat, power and water. The 77-year-old leader has also made few public appearances since his hospitalization in the United States two months ago, renewing concerns about his health.

In the midst of this turmoil, both Russia and Iran have been pressing Aliyev over the Caspian issue, while alternately providing and withholding supplies of gas and electric power. On the surface, the problems of energy deliveries to Azerbaijan should have nothing to do with a Caspian settlement. But the country continues to struggle in the shadow of its great neighbors to the north and the south, as both seek compliance with their Caspian plans.

To the north, Azerbaijan has become dependent, at least for this winter, on supplies of Russian gas. Earlier this month, Russia started deliveries and then stopped them because of obscure customs rules. According to the Petroleum Argus newsletter, the Russian government told Azerbaijan that it would get no more gas until it started pumping oil through a Russian pipeline to the port of Novorossiisk.

That situation placed Baku in a tough position, because it had already negotiated to use the Russian gas at its power plants instead of its own oil, so that it could then export the oil through the Russian pipeline to meet Moscow's demands. But instead, Russia was now demanding to get the oil first, leaving Azerbaijan with neither oil nor gas for its generators.

This trouble came in the midst of last week's demonstrations, giving Russia powerful leverage. Last Thursday, Russia turned the gas back on after the president of the Azerbaijani state oil company SOCAR flew to Moscow. It is not clear how much oil was promised for the Russian pipeline or whether any further pledges were made about Azerbaijan's position on the Caspian legal question.

As if the problems with its northern neighbor were not enough, Baku also received a sudden visit from an Iranian delegation last week. The officials led by Deputy Foreign Minister Ali Ahani, who is Iran's Caspian envoy, came to press their side of the division issue before the expected arrival of Russian President Vladimir Putin to seal a bilateral deal.

Like Moscow, Tehran also holds a strong energy card. It has recently cut off electricity to Azerbaijan's autonomous republic of Nakhichevan, citing unpaid debts of $45 million.

According to the Russian news agency Interfax, President Aliyev told Ahani, "If Azerbaijan had the financial capacities, this debt would already have been repaid, but there are no such capacities at the moment." Although Iran called the talks on the Caspian "constructive," Ahani left Baku on Thursday without an agreement and without promising to restore power to Nakhichevan.

It can only be assumed that last week's events weighed heavily on the Azerbaijani government. After international criticism of election irregularities, officials have had to contend with popular protests, aggravated by power shortages. Instead of helping the government by assuring gas and electricity deliveries, Russia and Iran have apparently used the situation to further their Caspian demands. The tense week ended in a greater misfortune for Baku as the country's worst earthquake in 40 years struck Saturday, causing an estimated 24 deaths.

In this atmosphere, any agreement on the Caspian may be a sign of Azerbaijan's vulnerability rather than strength in an accord with its neighbor to the north. And if it does choose to side with Russia on the Caspian question, Azerbaijan seems likely to face greater discord with its neighbor to the south.