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(Left to right:) Azerbaijani President Ilham Aliyev, Iranian President Hassan Rohani, Kazakh President Nursultan Nazarbaev, Russian President Vladimir Putin, and Turkmen President Gurbanguly Berdymukhammedov pose after the signing ceremony for a new convention on the status of the Caspian Sea on August 12.

The leaders of Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan met in Aqtau, Kazakhstan, on August 12 for what was supposed to be the long-awaited signing of a convention on the legal status of the Caspian Sea.

The leaders met, and signed the convention, but after more than 20 years it was clear that some of the same issues that have prevented an agreement that suited all five countries remained.

While the five presidents agreed on most of the issues, Iranian President Hassan Rohani mentioned that the delimitation of the sea remains an issue for Iran. Rohani said further talks would be needed to resolve the division of the Caspian, though it was unclear if he was speaking about the 22-kilometer stretch from each country's shore that is considered the territorial waters of each state, or the lines drawn to the maritime midway point where states meet.

Rohani also indicated further talks would be needed to clarify obligations to the responsibilities of the littoral states for guaranteeing the environmental safety of the Caspian.

In his opening remarks, Rohani praised the part of the agreement that excludes any foreign military presence in the Caspian, but in his closing statement he mentioned that should include shipment of foreign militaries' cargo across the Caspian. Rohani did not name any countries but he almost surely was referring to the agreement the United States has to ship cargo from Azerbaijan to Kazakhstan’s Aqtau and Quryq ports.

In what was perhaps a telling remark, Turkmen President Gurbanguly Berdymukhammedov concluded his opening remarks by saying another summit should be held in Turkmenistan.

The leaders used their opening statements to highlight aspects of the Caspian agreement that were most important for their individual countries.

Kazakh President Nursultan Nazarbaev and Azerbaijani President Ilham Aliyev both stressed the trade links that would surely expand with greater shipping across the Caspian. Both Nazarbaev and Aliev spoke of a new trade bridge between Asia and Europe.

President Rohani echoed this message pointing out trade among Caspian states was still only a small fraction of what it could be.

He touted the potential of railway connections from the eastern and western side of the Caspian to Iran and on to the Persian Gulf, rather than referring to an Asian-European trade route. Aliyev and Berdymukhammedov also mentioned the railways passing through their countries to Iran.

Toward the end of his opening statement, Aliyev also drew attention to the ongoing conflict with Armenia over the Nagorno-Karabakh region, saying the unresolved issue was an obstacle to fully developing trade potential through the Caucasus.

Russian President Vladimir Putin said in his opening remarks and closing statement that the parts of the agreement that dealt with fighting terrorism were especially important given the Caspian’s proximity to Afghanistan and the Middle East.

Although the five presidents signed documents at the end of the summit, it would be difficult to qualify the event as a clear success. It was evident there are still unresolved matters, particularly from Iran's perspective.

The fact that there was even mention of another summit in the future could indicate that indeed, while the convention on the legal status of the Caspian was signed, key issues still need to be discussed.

The views expressed in this blog post do not necessarily reflect those of RFE/RL
Turkmen President Gurbanguly Berdymukhammedov would like to open a pipeline further west still -- to Azerbaijan and Europe.

It has taken more than 20 years. But on August 12, the leaders of Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan will meet in the Kazakh port city of Aqtau, reportedly to sign a new convention on the legal status of the Caspian Sea.

An 18-page draft of the agreement, posted briefly on Russian Prime Minister Dmitry Medvedev's website in June and obtained by RFE/RL, lists 24 articles, including territorial waters, maritime borders, rules for navigation, fishing rights, environmental matters, and, importantly, use of the sea's resources.

The Caspian seabed hides some 50 billion barrels of oil and nearly 9 trillion cubic meters of gas in proven or probable reserves. At current market prices, that is several trillion dollars' worth of energy resources; with further exploration, it could turn out to be much more.

So it is perhaps unsurprising that it has taken this long to reach a deal on the Caspian's legal status.

Debate has always hinged on whether the Caspian is a "sea" or a "lake." It is an inland body of water, with no exits to any seas or oceans. The draft suggests the five littoral states will agree in Aqtau that the Caspian is a sea.

Classifying it as a lake would mean the resources of the Caspian should be divided equally among those five countries. The sea designation means the five countries should draw lines extending from their shores to the midway point with littoral neighbors.

Iran is arguably the loser under such an arrangement, as it would get only about 13 percent of the Caspian -- and the deepest and saltiest part at that. That has seemingly led Tehran to resist any deal recognizing the Caspian as a sea.

Kazakhstan is seemingly the biggest winner under the "sea" definition, since more than half of the Caspian's hydrocarbon wealth is said to lie in what would be Kazakhstan's sector.

The absence of an agreement has not stopped Azerbaijan, Kazakhstan, Russia, and Turkmenistan from exploring and developing sections of the Caspian they have always believed to be their sectors. In that sense, the convention will formalize what was de facto already decided by those four countries years ago.

Last TCP Hurdle Cleared?

The intriguing part of the convention is Article 14, which according to the draft text states that "the parties can lay underwater pipelines along the Caspian floor" (Section 2) "according to consent by the parties through whose sector the cable or pipeline should be built" (Section 3).

Turkmenistan has wanted for more than 20 years to build a gas pipeline to ship its gas across the Caspian to Azerbaijan, where it would be pumped into pipelines leading west to Turkey or the Black Sea and, ultimately, to Europe.

Some felt that under international law, there was no obstacle to this Trans-Caspian Pipeline (TCP) being built -- even without an agreement on the Caspian's legal status from all five states -- so long as Turkmenistan and Azerbaijan, through whose territories the pipeline would pass, approved the deal.

Russia and Iran have opposed the TCP on the grounds that it poses a potential environmental hazard to the Caspian's unique biosphere. The claim seemed especially suspect from Russia, since Russia's Gazprom has laid gas pipelines along the Black Sea to Turkey (Blue Stream) and is planning to build another one (TurkStream), and has also completed one pipeline across the Gulf of Finland to Germany (Nord Stream) and is hoping to build another pipeline to Germany (Nord Stream 2).

All those pipelines are said to be more technically challenging than construction of the TCP, and appear to face greater obstacles -- the best example being unexploded bombs from World War II in parts of the Gulf of Finland.

Some felt Tehran and Moscow's environmental concerns were actually economic concerns, stemming from the desire of each to hinder gas-exporting competitors, in this case Turkmenistan, from selling to markets in Europe. The European Union supports construction of the TCP and has included it as a potential part of the EU's Southern Gas Corridor strategy.

Environmental Concerns

While Article 24, Section 2, of the draft allows littoral states to lay pipelines, it goes on to stipulate that such activities hinge on "the condition of the accordance of their projects with ecological demands and standards."

It appears to be the same loophole that has held up construction of the TCP for all these years, though it is unclear whether this would represent an effective veto that other littoral states could employ to halt projects.

Other parts of the agreement hold individual countries responsible for any damage they cause to the sea through exploration, development of sites, or construction of platforms or pipelines, which seems to place the responsibility for safety on the parties involved in future hydrocarbon development or export projects.

There is a precedent for pipeline accidents in the Caspian. Two pipelines (one oil, one gas) leading from Kazakhstan's offshore Kashagan site ruptured and leaked shortly after production started in September 2013. The other littoral states did not take any action, or even voice any criticism of Kazakhstan on that occasion.

However, it should be remembered that the Caspian Sea is home to sturgeon that produce the world's finest caviar. Iranian Almas caviar, for example, is the most expensive in the world, selling for more than $30,000 per kilogram.

Turkmenistan has anticipated concerns about potential environmental damage to the Caspian and has hosted several recent conferences on ecological safety and publicly touted the efficient and thorough work of the country's environmental organizations.

A report on August 8 on the Caspian Environmental Service (CaspEcoControl) in Turkmenistan "monitoring the environment, surface seawater and bottom sediments, groundwater of coastline, atmospheric air [and] analyzing the hydro-chemical regime in the sea at the stations located in Turkmenbashi Bay, Kiyanly Bay, Garabogaz, and Avaza."

Kazakhstan and Azerbaijan also have plans to build the Kazakhstan Caspian Transportation System (KCTS) oil pipeline to bring Kazakh oil across the Caspian from the Kazakh port town of Quryq to Baku. If construction of that pipeline goes ahead, it is difficult to imagine that the TCP would not be built.

The agreement also forbids the presence on the Caspian of any military forces except those of the five littoral states. This part of the document would appear to favor Russia, which has by far the largest and most advanced naval force in the region.

The signing of the convention on the legal status of the Caspian would draw to a close nearly 22 years of work to reach an agreement. The document appears to resolve many of the problems that have given the littoral states, and potential foreign investors, pause when considering whether to go ahead with projects. But given the Caspian's oil and gas wealth, it is unlikely this single document will settle all the differences that exist over the sea's division and use of its resources.

The views expressed in this blog post do not necessarily reflect those 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. Content will draw 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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