Caspian: Summit Fails To Resolve Key Question

The five leaders failed to make much progress toward a new legal regime in the Caspian (ITAR-TASS) October 16, 2007 (RFE/RL) -- Sea or lake? Hopes were high that the leaders of the five Caspian littoral states, who met today in Tehran, would finally resolve their long-standing dispute over the definition of the world’s largest inland body of water. The answer to that question is key to clarifying the Caspian’s legal status -- and establishing how to exploit, and export, the vast energy reserves beneath its seabed.

Alas, it wasn’t to be. In their declaration after the summit, the leaders of Azerbaijan, Kazakhstan, Iran, Russia, and Turkmenistan dodged the key question of legal status. Instead, they called for rational use of Caspian biological resources, and also pledged not to be involved in an attack on any of the other littoral states.

The declaration stated that "the parties underline that under no circumstances would they allow other nations to use their territory for waging aggression or other military action against any of the parties." Analysts said that clause could be aimed at easing concerns in Tehran over possible attempts by the United States to use Azerbaijani territory for a military attack on Iran, which has defied Western calls to cooperate on its nuclear program.

"It is also important that we talk about the impossibility of providing our own territory for other countries in case of aggression or some other military actions against one of the Caspian Sea states," Russian President Vladimir Putin said.

Pipeline Restriction

Another point of the declaration raised eyebrows. Seemingly at the request of Russia and Iran, one section requires consent from all five nations before any of them can build a pipeline under the Caspian. Western countries led by the United States currently back such projects as way to bypass both Russian and Iranian territory.

Another point specifies that only vessels flying the flag of one of the five littoral states are allowed to ply Caspian waters. Putin suggested such wording confirms the "sovereignty over the Caspian of only the Caspian states, including the use of subsoil resources."

Nonetheless, it was the status of the hydrocarbon-rich Caspian Sea that brought the leaders to Tehran. That question has aggravated relations among the five states since the collapse of the Soviet Union in 1991 -- when Caspian waters were suddenly washing the shores of five countries, not two.

In the absence of any new deal, relations and cooperation is still guided by treaties signed in 1921 and 1940. Moscow was essentially able to call all the shots in both of those treaties, and little attention was devoted to any eventual exploitation of fossil fuels such as natural gas and oil.

The central question -- whether sea or lake -- quashed any progress at the first Caspian summit more than five years ago. Likewise, today’s summit did not produce any specific solution to the key dispute among the littoral five.

If the Caspian is classified as a sea, then the bigger a country's coastal area, the greater the share it can expect to control and develop. Such a deal would greatly favor Kazakhstan -- not simply because it has the longest Caspian coastline but also because the rich Kashagan oil field and other potentially lucrative fields would presumably lie within its territorial waters. Kashagan is regarded as the largest oil field to have been discovered in decades.

Lakeside Iran

Iran would be the biggest loser if the Caspian is defined as a sea, because its sector in the southern Caspian would be among the smallest and -- according to exploratory work -- its most energy-poor. Not surprisingly, Tehran favors its definition as an inland lake. That would leave all littoral states sharing equally in the riches of the Caspian. As a result, profits from Kazakhstan's multibillion-dollar Kashagan oil field would be distributed equally among all five countries.

Moscow has traditionally favored labeling the Caspian a sea -- not merely because Russia's sector is the largest after Kazakhstan but also because Russian businesses are active on Kazakhstan's Caspian shore. Putin said today that the Caspian's "territory should not be covered with state borders, sectors, and exclusive zones. The less area they occupy, and the more the waters and the surface remain for common use by the Caspian states, the better."

Putin said that he and the other leaders welcomed a proposal by Iranian President Mahmud Ahmadinejad to establish a Caspian economic grouping. Putin said that as a first step toward its creation, Russia would host an economic conference of Caspian states next year.

The summit declaration also repeats previous calls for regular meetings between the leaders of Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan -- something called for at the first summit in 2002 but never realized. An announcement that the next Caspian summit will be held next year in the Azerbaijani capital, Baku, could be an indication that the five parties are more serious about holding such regular meetings.