Current Geopolitics in the Caspian Littoral States

Caspian Littoral States

Caspian Sea is in an endorheic basin and is bounded to the northwest by Russia, to the west by Azerbaijan, to the south by Iran, to the southeast by Turkmenistan, and to the northeast by Kazakhstan. These 5 countries are known as Caspian Littoral States.

Caspian Basin and World Energy

With growing tensions and instability in the middle east after the US invasion of Iraq and its inability to stabilize the country fast in the near future, possible explosion of terrorism in and around Saudi Arabia, the heartland of Islam, the Caspian basin is likely to attract investors as alternative source of energy and in related industry, although it is also not free from terror.

Caspian Basin could become a major petroleum producing area like the Gulf, North Africa, etc.

It is potentially world’s third largest oil producer region, with reserves of more than 200 billion barrels (Saudi Arabia’ s are around 250 billion barrels ) and 800 billion cubic meter of gas.

In the Caspian Basin, world’s first offshore wells and machine-drilled wells were made in Bibi-Heybat Bay, near Baku, Azerbaijan. In 1873, exploration and development of oil began in some of the largest fields known to exist in the world at that time on the Absheron peninsula near the villages of Balakhanli, Sabunchi, Ramana and Bibi Heybat.

Background of the Current Political Disputes:

The major issue with the Caspian Sea is that it can be defined both as a sea as well as a lake. This has caused a political confusion over the status of the Caspian Sea. The second major problem is the demarcation of the Caspian Sea Basin. Negotiations related to the demarcation of the Caspian Sea have been going on for nearly a decade among the states bordering the Caspian – Azerbaijan, Russia, Kazakhstan, Turkmenistan and Iran. Due to the unclear status of Caspian Sea, access various resources such as Oil & Natural Gas, Fishing has been a sensitive issue. Access to the Volga River, which is the longest river in Europe, has been another important issue, as access to it is vital for landlocked states of Azerbaijan, Kazakhstan and Turkmenistan.

As per a treaty signed between Iran and Soviet Union, Caspian Sea is a lake. The resources of Caspian Sea have thus to be shared commonly.

After the dissolution of the Soviet Union, Russia and Iran announced that they would continue to adhere to the old treaty but not all of the newly independent states assumed continuation of the old treaty.

Since Soviet Union got split into 15 countries, Iran called for an equal division of the Caspian Sea Resources among the five littoral countries: Iran, Azerbaijan, Turkmenistan, Kazakhstan, and Russia. Iran also said that if this division does not come to pass, then it intends to recognize only its old treaty, but then the Kazakhstan, Azerbaijan and Turkmenistan announced that they do not consider themselves parties to this treaty.

Russia, Kazakhstan and Azerbaijan have agreed to a solution about their sectors. Russia and Kazakhstan signed a treaty, according to which, they divide the northern part of the Caspian Sea between them into two sectors along the median line. Each sector is an exclusive zone of its state. Thus all resources, seabed and surface are exclusive to the particular state. Russia and Azerbaijan signed a similar treaty regarding their common border. Kazakhstan and Azerbaijan signed a similar treaty regarding their common border. These treaties recognize the Caspian as a sea consisting of separate sovereign territorial waters, with each country having exclusive access to the reserves in its domain. In this arrangement, Azerbaijan has the largest share. But these bilateral treaties are not recognized by Iran. Iran continues to insist on a single multilateral agreement between all five littoral states (as the only way to achieve 1/5-th share).

There are no problems between Kazakhstan and Turkmenistan, but the latter is not actively participating, so there is no agreement either.

Azerbaijan is at odds with Iran over some oil fields that the both states claim. There have been occasions where Iranian patrol boats have opened fire at vessels sent by Azerbaijan for exploration into the disputed region.

There are similar tensions between Azerbaijan and Turkmenistan (the latter claims that the former has pumped more oil than agreed from a field, recognized by both parties as shared).

There are some minor issues between Turkmenistan and Iran.

In 2007, the Caspian littoral States had signed an agreement that bars any ship not flying the national flag of a littoral state from entering Caspian waters.

The above discussion makes it clear that the question, of which countries own the fossil fuels under Caspian waters, remains unsettled. With smaller reserves of oil lying adjacent to their Caspian shorelines, Iran and Turkmenistan argue that the Caspian should be regarded as a lake, meaning that its lakebed resources should be treated as common property, with shares divided equally among the five surrounding states.