Two neighborly nations Azerbaijan and Turkmenistan separated by Caspian Sea exchanged bitter messages on Tuesday, after a Turkmen exploration vessel started working on an oil and gas field disputed by Baku and Ashgabat. The field called Kapaz by Azerbaijan and Serdar by Turkmenistan contains up to 80 mln tons of oil and 32 bcm. It was discovered by Azerbaijan in 1959 and an exploration drilling was commenced in 1986. After the dissolution of Soviet Union, Turkmenistan contested Azerbaijani ownership of Kapaz leaving the field undeveloped unlike dozen others that became a source of investment from foreign oil and gas companies. Since neither of the parties conceded, the negotiations remained completely deadlocked and bilateral relations between Azerbaijan and Turkmenistan soured, until the incumbent President of Turkmenistan Gurbanguly Berdimuhamedov assumed the responsibilities of the President in December 2006 after the death of the first autocratic and long serving President Saparmurat Niyazov, also known as Turkmenbashi (Leader of Turkmens). With Berdimuhamedov in office, the relations between Azerbaijan and Turkmenistan started improving.
In 2008, the parties signed an agreement suspending any exploration works at Kapaz field until all issues involving the field are resolved. On June 16, a private Turkmen vessel entered the disputed field with an intent to conduct exploration work, but was warned off by an Azerbaijani armed patrol boat. Azerbaijani Ministry of Foreign Affairs summoned the Turkmen ambassador in Baku, Toyli Komekov, and issued a note, accusing Turkmenistan of violation of the 2008 agreement and warned that Azerbaijan would take all necessary measures to ensure its sovereign rights in Caspian Sea are not violated. Turkmenistan, in turn, accused Azerbaijan of “illegal action” against a private Turkmen ship carrying out a seismic exploration in the sector of the sea which “has nothing to do with Azerbaijan”. Returning the favor, Ashgabat warned that it would take all “adequate measures” if Azerbaijan continued the “provocations.”
The alleged violation of 2008 accords between Azerbaijan and Turkmenistan on Kapaz (Serdar) field by Turkmenistan is especially surprising because just a few weeks ago, the First Deputy Prime Minister of Azerbaijan, Yagub Eyyubov flew to Ashgabat to meet President Berdimuhamedov. The sides had a warm exchange and discussed further development of bilateral relations including joint projects in oil and gas sector. According to media reports, President Berdimuhamedov stated Azerbaijan was a “sincere friend and reliable partner, a country holding the same views with us in addressing many urgent issues of regional and global policy and we attach great importance to the development of traditionally friendly Turkmen-Azerbaijani relations”. Both Azerbaijan and Turkmenistan have been exporting their energy resources from the Caspian Sea to Western and Asian markets, and are considered important potential suppliers to the planned Nabucco natural gas pipeline, backed by the United States. Caspian basin is extremely rich with oil and gas resources and has caused an uneasy relationship between all 5 countries sharing it. In accordance with the Soviet-Iranian treaty, the sea was treated as a lake, which the Caspian technically is and was therefore divided into two sectors (Soviet and Iranian) with the international border running almost along the Iranian coastline. After the collapse of Soviet Union, Iran demanded an equal division of the Caspian into 5 even sectors, mainly because most of offshore energy resources are located away from the Iranian coastline. Azerbaijan, Turkmenistan and Kazakhstan disagreed, instead offering the division based on median lines, giving each state a share proportional to its coastline length. As expected, Iran rejected the offer and has since made bold moves against Azerbaijan. For instance, in 2001, it sent its navy onto an ExxonMobil operated exploration vessel which worked on Alov offshore field in Azerbaijani sector, known as Alborz in Iran. After warning was issued to the captain, the American vessel retreated and all exploration work was suspended. Azerbaijan issued a diplomatic note to Iran and soon enough, Turkish F-16s circled the Azerbaijani airspace from Baku to Astara (border town on Azerbaijani-Iranian border) what was presented as a military show in Baku but was deemed a firm warning to Tehran from Azerbaijan’s ethnic kin, Turkey. Ever since the incident at Alov field, the West, which had heavily invested itself in the Caspian since the break up of Soviet Union, started allocating more financial and military aid to the newly independent republics sharing the basin to counter any Iranian navy build up. Russia subsequently increased its own military presence and conducted several navy exercises in its sector of the sea in the last decade.
With the rising tensions between the West and Iran, Azerbaijan quickly came to the spotlight and its significance grew. Iran was among the issues to be discussed when Secretary of State visited South Caucasus in early June. In her remarks in Baku, she reiterated her support for partnership of Azerbaijan with the United States in energy and security issues, which includes America’s aid to Azerbaijani navy and protection of its borders. A message of commitment from the United States for protection of American interests in South Caucasus did not worry Iran as much as it worried Russia. That’s one of the reasons Clinton’s arrival was foreshadowed by clashes of Azerbaijani and Armenian forces on the front lines, leaving several dead on both sides. Russia refuses any scenarios where the United States may intervene and assume leadership in its immediate backyard and is evidently ready to showcase why and how it controls the events in South Caucasus. An exploration operation started by a Turkmen vessel in Kapaz field is no exception. Russia and Turkmenistan have had close ties since the break up of Soviet Union. Turkmenistan used to export about 70% of its gas through a Russian pipeline network, but the relations became strained after a pipeline explosion in Russia which effectively cut Russian imports of Turkmen gas. Since then, Turkmenistan diversified its exports by building closer ties with Eastern Asia and construction of Central Asia-China gas pipeline in late 2009. Soon after abandoning the Turkmen market, Russian committed to buy natural gas from Azerbaijan, at significantly higher price than it bought from Turkmenistan. It is possible that Russia may resume its close cooperation with Turkmens and could be sending warning signals to Azerbaijan and the United States against any overtures that run counter to Russia policies in South Caucasus. One thing is for sure: if the diplomatic clash between Azerbaijan and Turkmenistan does not subside and instead, yields deployment of navy boats around the field from both sides, Russia and Iran will both use the occasion as an excuse to increase their military build up in the Caspian, a move which will turn the region into a time bomb.
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