SHARING THE RESOURCES OF THE CASPIAN SEA: PARTICIPANTS, INTERESTS, AND PROBLEMS

Veniamin GINSBURG
Dr. Manuela TROSCHKE


Veniamin Ginsburg, Ph.D. (Technology), researcher at the Institute of Eastern Europe (Munich, Germany)

Manuela Troschke, D.Sc. (Econ.), researcher at the Institute of Eastern Europe (Munich, Germany)


A Brief History

One of the most urgent and demanding problems that have arisen since the Soviet Union collapse is how to share the natural resources of a nation that was once an integrated whole. This is a rather complicated process and the disagreements emerging among the parties involved are the frequent source of regional conflicts.1 In so doing, the situation is being complicated even more by the claims of third countries requesting that the provisions of agreements entered in the past with the Soviet Union be reconsidered.

A graphic example is the dilemma that has evolved around dividing up the Caspian Sea, since its shelf has large deposits of hydrocarbons and its waters boast some 90 percent of the worlds sturgeon supplies. Five countries, Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan, are currently making claims to its seabed and aquatic area, which used to be under the jurisdiction of the Soviet Union and Iran. According to the results of a preliminary experts examination conducted in 1990-1995 by specialists from these and other countries, the regions hydrocarbon supplies could be initially compared with the resources in the Persian Gulf. This news engendered several promising projects and drew the attention of large oil companies interested in developing and investing in them. But it soon transpired that some of the richest deposits were located in the seas aquatic area, whereby very unevenly. So depending on the Caspians future status and the method used to divide it up, a particular state could find itself in sole possession of one of these hydrocarbon-rich fields, leaving others with a less enticing piece of the pie. This is also the main reason for the disagreements and conflicts arising among the coastal states, which have been unable for more than a decade now to find a solution that pleases everyone.

Nor is it impossible to ignore other very objective reasons for the elevated political tension in the region and the stubborn and uncompromising way in which these five countries are defending their interests. An important role is being played by the countries mutual dependence on each other and Russias dominating policy in the region. At the initial stage of their independent existence, Azerbaijan, Kazakhstan, and Turkmenistan, which have the largest hydrocarbon supplies, were struggling with severe economic difficulties. They had to deal with having no major consumers of these resources in their immediate vicinity, with not having their own gas and oil pipelines of the required capacity and length, and with not having the waterways needed for oil transportation and commerce, which makes them dependent on Moscow. Russia, on the other hand, with its extensive network of gas and oil pipelines and sales markets inherited from the Soviet Union, essentially has a complete monopoly on the transportation and sale of petroleum products in the region. The Russian oil and gas companies maintained by Boris Yeltsins government placed severe and almost uncompromising pressure on the authorities and oil and gas complexes of these countries in order to extract the highest economic benefits.

And whereas Azerbaijan and Kazakhstan already had a somewhat export-oriented industry, Turkmenistan, the second largest gas producer and exporter in the region after Russia, found itself in an extremely difficult position. During the Soviet years, its economy had a pronounced raw material proclivitynatural gas, crude oil, and petroleum products (in small amounts) constituted more than 60 percent of this Union republics export. But its neighbors, Kazakhstan, Uzbekistan, and Iran, now have their own hydrocarbon refineries and do not need to make large purchases from Turkmenistan, while the political situation in Afghanistan is extremely unstable. Russia wanted to buy Turkmen gas at artificially low prices and refused to transport it to West European countries. The main consumers of this gas were Ukraine, Georgia, and several other post-Soviet republics. Ashghabad was forced to cut back on gas production. Then the situation deteriorated even more. Importing countries did not fulfill their payment obligations, which meant that the export of blue fuel did not yield the anticipated revenue and the foreign trade balance plunged into the red. Although Turkmenistan had its own major debtors, it still had to take out credits to support and develop its own economy. The gross domestic product dropped and only since 1998, according to the Turkmenistan Statistics Forecasting Board (Turkmenstatprognoz), has a trend toward its stabilization and gradual growth started to show.

Between 1992 and 1999, all the post-Soviet countries of the region were feeling this kind of pressure from Russia to one extent or another. And their economic and political alienation complicated their interrelations, increased their desire to become completely independent of each other, and prompted them to search for new allies and partners and toughen up competition. Instead of searching for the most acceptable solution, each country began independently looking for a way out of the current situation. Grandiose pipeline construction projects have been generated and are being implemented for delivering oil and gas to new consumers, the price-setting policy is being revised, and economic priorities are changing.

Due to the long years of economic slump and for several other reasons, each of these countries is naturally incapable of independently exploring and working deposits, developing its own oil- and gas-refining industry, and designing and building transcontinental pipelines. In order to do this, they are seeking the help of large foreign investors and executors. In so doing, in addition to purely economic interests, they are also clearly hoping for political protection from interested partners. But big investors are mainly participating in potentially promising projects based on the prospects for developing high-resource fields, which is fanning the flames around the struggle for possession of the deposits on the Caspian shelf. Disputed deposits are appearing, and controversies among the regions countries are becoming more intense. This protracted period of tense confrontation is having a negative effect on the economy of these countries and on the political situation in the region.

Positive trends in resolving the designated problems did not begin until 2000, after the change in the Russian government. During his first months in office, President Vladimir Putin visited all the Caspian states and held constructive negotiations with their leaders. Instead of leaning heavily on these countries, Moscow began conducting a much more flexible and effective policy aimed at searching for common interests and mutually advantageous economic and political solutions. During the past three years, definite progress has been made in this area. Several agreements have been entered that are helping the Caspian states to move closer together again. For example, Moscow and Astana are successfully drawing up and entering agreements on the joint development of previously disputed oil fields and on the transportation of oil through Russia,2 it is very likely that some of Kazakhstans oil will be pumped through the Baku-Tbilisi-Ceyhan pipeline, Russia is increasing its purchases of Turkmen gas at mutually advantageous prices, its transit conditions are improving, and so on. Although there are still many disputes to be resolved, it is crystal clear that the leaders of all the regions states are willing to discuss them and look for constructive solutions acceptable to everyone.

Dividing the Caspian Sea, the Standpoint of Each Country

At first, the mass media and the leaders of some of the coastal states reduced the problem of dividing the Caspian Sea to defining its status. The question of what this closed body of water actually was, a lake or a sea, is still a topic of discussion today, although to a much lesser extent. The arguments put forward by the supporters of each alternative are so extensive and convincing that decision-making gets more complicated by the day. (This topic is widely covered by the mass media, so there is no point in dwelling on it here.) It is presumed that recognition of the water bodys status will automatically lead to its division in compliance with international standards and the problem will be resolved. But the way events are developing shows that trying to make a non-standard body of water comply with the regulations of international law is not likely to yield the desired result. For the countries are not actually dividing up the sea itself, but the oil and gas fields on its shelf. And this demands special approaches, which the governments of the five Caspian states are currently trying to find and coordinate.

Russia

After the Soviet Union collapsed, the Russian Federation continued to think of the Caspian Sea as a closed body of water under the legal jurisdiction of the Soviet-Iranian treaties. Turkmenistan and Iran were in full support of this. In 1992, Moscow declared the Caspian a closed sea with a 12-mile zone of territorial waters belonging to the coastal states and gave its consent to third countries being involved in assimilating its natural resources under conditions agreed upon by all the Caspian states.3 But this heartening phrase did not have any substance, no official statements about agreements were forthcoming, and each country invited the partners it wanted to develop the fields it considered its own.

Soon doubts arose about how right the original decision had been and Russia began to change its opinion with incredible frequency. In 1995, it came forward with the initiative to establish a 20-mile zone of territorial waters and grant the Caspian states equal rights to develop the fields in the center of the sea. As early as October 1996, Moscow signed a memorandum of intention with Tehran and Ashghabad to found a trilateral oil company for developing the bed of the Caspian Sea, and supported Irans alternative for dividing it up, according to which each of the Caspian states had the right to sovereign use of their 20-mile zone of territorial waters and an additional 20-mile exclusive economic zone. In November of the same year, it suggested defining a zone of exclusive jurisdiction over the mineral resources within national sectors that extended 45 miles from the shore. In July 1997, Russia and Azerbaijan signed an agreement on joint oil development on the Azeri part of the shelf, including the fields disputed by Turkmenistan. In July 1998, Boris Yeltsin and Nursultan Nazarbaev, without notifying the leaders of the other Caspian states, signed a treaty On Delimitation of the Seabed in the Northern Part of the Caspian Sea for Observing Sovereign Rights to Subsurface Use. Of course, this approach was disparaged by the neighboring states and aggravated the situation even more.

The new Russian government has a much more flexible and efficacious approach to this problem. After carrying out additional analysis of the situation and holding consultations with the leaders of the other coastal states, it suggested dividing the seabed down the median used as the basis for defining border coordinates. All the post-Soviet countries concerned were essentially in agreement with this procedure, but in so doing new controversies arose. The level of this body of water is constantly changing, even its average seasonal and annual fluctuations significantly influence the coordinates of the median and (depending on the initial data used) several of the most lucrative fields are in the economic zones of different states. The methods for defining the coordinates of the median also set off heated discussions, new unprecedented disputes arose, and a mutually acceptable solution was slow in coming.

And time is clearly not working on Russias side. At first, many of its specialists and mass media were extremely skeptical about the planned construction of major Azerbaijan and Kazakhstan oil pipelines and Turkmenistan gas pipelines that were giving these countries access to European and Asian markets. They considered such ideas insubstantial and impossible to implement. But these countries kept stubbornly headed in the designated direction, gradually found investors and guarantors, and not only did the projects acquire tangible features, but they even began being implemented, and at quite rapid rates. The danger of Moscows political influence in the region being undermined was aggravated by the very real threat of it encountering serious competition on the hydrocarbon market.

By this time, new factors had also arisen: the region had become a focus of attention for big investment capital from third countries, and Russias weakened foothold in the post-Soviet states led to a sharp increase in the political and economic presence of investor states and guarantors, primarily the U.S., Great Britain, and Germany. The threat of losing its influence in the region gave a powerful boost to the activity of Russian political and economic figures and caused further liberalization in Moscows policy.

Literally within a one-year time span, consultations were held at every possible level, and political and economic treaties were signed with all the post-Soviet states in the region. The range of topics covered at the negotiations to resolve issues and enter agreements was wider than ever beforefrom military and economic cooperation with Azerbaijan to the joint development of fields with Kazakhstan and purchases of most of the gas produced by Turkmenistan for export at Ashghabads prices and under its conditions. The largest Russian companies were willing to help implement projects that just recently seemed utopian.

In order to simplify the situation and speed up division of the Caspian, Moscow suggested defining a so-called modified line by means of bilateral agreements. In addition to the general negotiation process, Russia held consultations with Kazakhstan and Azerbaijan, which resulted in the signing of a trilateral agreement on the interception point of the borders delimitating the contiguous sections of the seabed on 14 May, 2003. Pursuant to this document, Moscow got 19%, Astana 29%, and Baku 18-19% of the Caspian seabed.4 It is obvious that a leading role in the negotiation process was played by a preliminary agreement among the states on joint activity in the exploration, production, transportation, and sale of hydrocarbons from previously disputed fields.

The Islamic Republic of Iran

Iran has the shortest stretch of Caspian coastline, as the result of which Tehran has approximately 14% of the shelf when the sea is delimitated along the median.5 Naturally, it does not like any of the division methods based on calculating the length of the coastline. So it insisted initially on the sea being divided into equal sectors for all the Caspian states or agrees to dividing the coastal zones with the right to joint use of the hydrocarbons on the central shelf.

A serious conflict situation between Tehran and Baku arose over the field that Azerbaijan calls the Alov-Araz-Sharg field. Despite Irans claims and incomplete division of the shelf, that is, a dispute was clearly in the offing, Azerbaijan signed an agreement with several foreign companies on 21 July, 1998 on exploring, assimilating, and sharing the production6 of this field and tried to begin work on it. Events unfolded very unfavorably, but extremely legitimately: a willful decision by one country was followed by forceful actions by another. For example, on 21 July, 2001, Tehran announced that it would not allow its rights and national interests in the Caspian to be violated. Of course, the matter primarily concerned the disputed field. Despite the clear warning, Azerbaijan tried to go on implementing the project and made plans to begin drilling the first exploratory well as early as August, for which it sent a rented ship, Geofizik-3, to the region. On 23 July an Iranian naval ship approached the explorers with the demand to immediately vacate the disputed territory. Of course, this demand was met and all further work postponed until a final decision was made on whom the disputed territory belonged to.7

At present, Iran is participating quite actively in negotiations with Russia and other Caspian countries in resolving the problems around division of the sea and ensuring its environment is protected. The more recent meetings between Russian and Iranian diplomats were marked by significant positive shifts, but the specific problems have not yet been resolved. Tehran is interested in Moscows latest proposals to divide the territories in terms of resources rather than area percentage. It is also holding bilateral talks with Ashghabad and is showing an interest in the joint development of several fields.

Nevertheless, the Iranian side considers the trilateral agreement among Russia, Kazakhstan, and Azerbaijan to be illegal,8 continuing to insist on its right to 19.7-20.3 percent of the Caspian. Moscow, on the other hand, is resolutely in favor of sticking to the adopted agreement.9

Kazakhstan

Kazakhstan is currently in the most advantageous position. The supplies of its large fields have been confirmed and are being successfully developed. According to its own forecasts, by 2005 the republic will be producing up to 60 million tons of oil annually, with an increase to 88 million tons by 2010, that is, almost twice as much as in 2002. The current pipelines will be able to sustain the countrys oil export until 2008-2009. These are primarily the Atyrau-Samara route (which can pump 15 million tons of Kazakh oil a year), the Caspian pipeline consortium (with an annual capacity of 28.2 million tons, which delivers oil to Novorossiisk and on to the foreign markets), and several other routes. It may be possible to hook up to the Baku-Tbilisi-Ceyhan oil pipeline, and the country is also looking at the possibility and expediency of building another two pipelines, the Kazakhstan-Turkmenistan-Tehran pipeline with a capacity of 25 million tons, and the Kazakhstan-Turkmenistan-Kharq pipeline with a capacity of 50 million tons. The Chinese vector is also thought to be promising.10

The disputes with Russia and Azerbaijan have been resolved bilaterally, and the decisions adopted do not infringe on the interests of other coastal countries. According to the agreement signed by Vladimir Putin and Nursultan Nazarbaev on delimitation of the seabed and subsurface, Russia got the Khvalyn and Central fields, and Kazakhstan the richest Kurmangazy field. All three fields are to be developed on an equal share basis.

Most important is the fact that both countries intend to increase their cooperation in this area.

Azerbaijan

Azerbaijan has been the most active in assimilating the Caspians hydrocarbon resources. While the other countries concerned were looking for ways to resolve the problem of dividing up the sea shelf, Baku was actively striving to bring in investments to explore and develop oil and gas deposits on the Caspian seabed, a part of which it insistently declared its property without coordinating this properly with the other states in the region. This approach gave rise to several severe conflicts and put Azerbaijan in a difficult political and economic position. The situation was aggravated even more when, after clarification, the actual supplies of several deposits turned out to be far less promising than expected. The country concentrated its efforts on rapid unilateral development of the confirmed but disputed (in terms of possession) sectors.

Between 1994 and 2001, the republic signed more than 20 international agreements on developing its hydrocarbon resources with the participation of about thirty foreign companies. It was presumed that by 2015-2020, foreign investors would be able to help bring the annual oil production to approximately 60 million tons and natural gas production to 60 billion cubic meters. This would be quite sufficient to cover all the investments and ensure the country rapid economic growth. The investments came, but several economic and political difficulties that have arisen are curbing progress toward the set targets. For example, preliminary drilling did not confirm the predicted supplies of several land-based and offshore fields.11 The resources of the Karabakh, Kurdashi, Araz Deniz, Oguz, and Apsheron structures, the Dan-Ulduz-Ashrafi block, and so on, proved very disappointing. This will naturally have a negative impact on the predicted economic upswing. But there are also the large confirmed fields, Azeri-Chirag-Gunashli and Shakh Deniz, and they could well provide the country with a decent level of exports.

Oil transportation problems are also being resolved quite successfully. Construction of the Baku-Tbilisi-Ceyhan route has begun, along which oil is to be pumped to the world oil markets. Discussions about this route (it is 1,730 km long, has an estimated cost of 2.95 billion USD and an annual throughput capacity of 50 million tons) have been underway since the beginning of the 1990s. The project participants did not officially announce that it would pass through Azerbaijan, Georgia, and Turkey until 2001. According to the shareholders, the amount of oil needed for the pipeline to be profitable could be extracted from the Azeri-Chirag-Gunashli field by 2008-2009. But in order to make fuller use of the production capacity and push for faster remuneration of the pipeline, there are plans to use it to pump oil from other fields. What is more, the possibility of involving new partners is being considered, in particular using the pipeline to pump some of Kazakhstans oil. Everything would appear to be going normally, but when it comes to dividing up the Caspian Sea and its resources, Azerbaijan has been inclined to make unilateral decisions that are not always sufficiently justified and has been extremely uncooperative in coordinating these decisions. It is obvious that this is partly due to the disputes about who has possession of the Kiapaz, Azeri, Chirag, and Alov-Araz-Sharg fields it so badly needs.

From the very outset, the countrys leaders demanded that the Caspian be divided into national sectors with the status of full sovereignty as areas of state territory.12 They were not in agreement with Russias original proposal to create a 12-mile coastal zone for each state with joint use of the other resources on the shelf. Then Baku categorically rejected Moscows initiative to create a 45-mile zone from the shore of each state, since beyond the borders of Azerbaijans 45-mile zone there are potentially promising supplies of oil and gas. Until January 2001, the country insisted on its alternative for dividing not only the seabed, but also the waters and the airspace above them. Acute conflicts arose with Iran and Turkmenistan, whereby Azerbaijan simply ignored their very fair demands regarding the immunity of disputed fields until a common decision was reached.

The first positive shifts were not forthcoming until January 2001 after Vladimir Putin visited Baku. Azerbaijan agreed to carve up the bed of the Caspian into sectors using the principle of a modified median. Significant changes occurred after Iran demonstrated in no uncertain terms its intention to defend its interests by means of military force. Naturally, Baku was in no position to confront Tehran single-handedly. With the threat of a military conflict looming over their heads, it was pointless to talk to investors about developing the hydrocarbon fields. Russia, apparently already weary of the constant bickering, wisely stepped aside of the conflict, but activated negotiations with Iran and the other countries concerned.

A conflict with Turkmenistan arose largely due to differing approaches to defining the coordinates of the modified line used to delimitate the sectors. The rich fields that Baku calls Chirag, Azeri, and Kiapaz, and were renamed Osman, Khazar, and Serdar by Ashghabad, respectively, are the ones under dispute. Turkmenistans claims are entirely justified, and of course they must be discussed and resolved. This is particularly pertinent since the fields are indeed closer to the Turkmen coast, Kiapaz is 80 km nearer, Azeri approximately 40 km, and Chirag 16 km.13 But each of these countries interprets the concept of coast in their own way. The difference in viewpoint basically boils down to the following. Ashghabad insists on the latitudinal method of division,14 that is, a parallel is drawn between the shores, and the median plotted through equidistant points along the geographical latitude. Baku, on the other hand, is proceeding from the end points along the coast, from the end of the Apsheron Peninsula (from its side), which protrudes several dozen kilometers into the sea.

Both states resolutely insist on their standpoints, but the problem must be resolved, and if possible peacefully. However, instead of looking for mutually acceptable alternatives, Azerbaijan is still working the disputed sectors and ignoring all of Turkmenistans statements, which has aggravated the situation and complicated the overall negotiation process.

Turkmenistan

Despite its relatively small population, on the order of 5.5 million people, the republic occupies third place in the world in terms of natural gas supplies. The volume produced by its land-based fields alone is close to 3 trillion cubic meters, and experts estimate the production volume on the Caspian shelf to be 5.5 trillion cubic meters.15 The available production capacities are quite sufficient to maintain its production and export at an annual level of 60-70 billion cubic meters, whereby if necessary this level could be raised even higher. Several information sources are talking about the unsatisfactory technical state of the gas pipelines, but are not giving any specific confirmatory facts. But even if this were true, restoring and raising the projected capacities is only a matter of time and money. According to many specialists, the countrys natural gas potential gives it every opportunity to increase annual production to 120-160 billion cubic meters. At the same time, the republic has appreciable supplies of oil and other fossil fuels. So given sales markets and means of transporting the hydrocarbons, it would be entirely capable of ensuring itself a stable economic existence and development.

The problem lies in its inconvenient geographic location in terms of selling gas and oil, as well as in its economys long years of specializing in the production and sale of raw materials. The country does not have any powerful gas and chemical complexes for refining its own gas, and building them requires not only time, but large investments. The most propitious source of funds for further developing the economy in the near future is still gas exports.

Potential large sales markets are far away, neighboring states have their own large supplies of hydrocarbons, and today Turkmenistan can only export a small amount of energy resources necessary for meeting the local needs of contiguous regions. At present, Ashghabad only has conditions for pumping large amounts of blue fuel through the pipeline system that was built as early as Soviet times, due to which it depends on its neighbors and encounters several other serious difficulties.

The pipelines mainly pass through Uzbekistan and Kazakhstan to Russia and then on to the West. Tashkent and Astana are expanding their own exports, so even in the future the transit of Turkmen gas could be limited. Further development of its export in this area will require an increase in the capacity of the current routes or building another pipeline along the seabed or coastline of the Caspian. The situation took a definite turn for the better after an agreement was signed with Russia on 10 April, 2003 on cooperation in the gas industry and subsequent treaties were entered with Ukraine. In this way, in the next 25 years, Ashghabad is ensured sufficiently reliable sales markets, but again is still somewhat dependent on Moscow.

As for carving up the Caspian Sea, Turkmenistan wants to go on with the negotiations. This became evident at the summit of the Caspian states held in the spring of 2002 in Ashghabad. And although no significant progress was made in resolving this problem, there can be no doubt that the meeting itself was extremely constructive. At long last, the heads of all the countries concerned participated directly in the negotiation process, the range of issues for further discussion was clearly delineated, and a decision to continue the dialog was made at the highest level. For starters this is quite a lotthe confrontation and feelings of insult that had accumulated among the countries during the years of standoff and the frequent deterioration in relations due to attempts to resolve the problems unilaterally were so great that it was unlikely a consensus could be reached during the course of just one meeting.

The standpoint of Turkmenistan itself has changed quite dramatically over the past few years depending on what alternatives other states put forward, which confirms Ashghabads intention to continue looking for a solution that suits everyone. In particular the states leaders are now essentially in agreement with the Russian initiative to divide the sea down a modified median, and the current discussions revolve largely around how to define this line. Turkmenistan also has its own alternative to offer: establishing a 12-mile zone along the coastline for all the sates and adding another 35 miles to it as an economic interest zone.16 Turkmenistan does not have any disputed territory or fields either with Kazakhstan or Iran regarding the bilateral interests of neighboring states. But the problem of disputed fields with Azerbaijan needs to be settled.

What Next?

So the standpoints have been defined, the negotiations are continuing, and the number of disputes is gradually dwindling, but there is still a long way to go until all the problems are completely resolved. On 27-28 February, 2003, the eighth meeting of a special working group was held (at the level of deputy foreign ministers of the Caspian states) on drawing up a Convention on the Legal Status and Division of the Seas Resources. The meeting participants reviewed the preamble and three of the twenty-two articles,17 and came to terms on how to approach resolving the problem. In mid-May, the ninth meeting of this working group was held in Almaty. According to the head of the Russian delegation, Mr. Kaliuzhniy, they succeeded in working through the text of the entire convention, came to terms on several more articles, singled out aspects that required additional consultations, and agreed to hold bilateral consultations (prior to the groups tenth meeting) to iron out any disagreements.18 The main issues still have to be resolved at future meetings, in particular, problems must be overcome regarding Irans claims to a 20-percent share in the future division of the sea and dividing up the disputed fields; the routes of the oil and gas pipelines clarified; and several other standpoints coordinated.

The disagreements among Azerbaijan, Turkmenistan, and Iran are not only hindering the adoption of a final decision, but are also fueling the flames. The tense political situation is prompting the countries to take preventive measures to protect their interests. The beginnings of militarization of the sea can clearly be seen. After Tehrans military threat against Baku, the Russian Caspian naval flotilla has been conducting its exercises, and Azerbaijan has been turning to Turkish military specialists for help. At the end of February 2003, Azerbaijan President Heydar Aliev met U.S. President George Bush to discuss the problems regarding the development and exploitation of the Caspian fields, as well as questions of regional security. At the same time, Azerbaijan is signing a treaty on military-technical cooperation with Russia.19 Kazakhstan is getting ready to conduct operative-strategic maneuvers involving all types of national army services and branches of arms. In so doing, the republics Defense Ministry is not hiding the fact that the main purpose of the maneuvers is to plan measures aimed at ensuring the military security of the countrys western region.20 And although Kazakhstan does not currently have any serious disputes with its neighbors regarding the Caspian, Astana is understandably striving to reinforce its power structures and borders21 in this strategically important region with its unstable situation.

In order to prevent any possible escalation in the confrontation and militarization of the region, all disputes must be resolved immediately by means of negotiations. Observers from several mass media are already evaluating the breakdown in forces. But even a minor military conflict will be a no-win situation for all concerned, regardless of its outcome. First, this relatively small closed body of water is not at all conducive environmentally to this kind of human intervention. Its unique ecology could simply cease to exist. Second, if offshore wells and pipelines are destroyed not only due to military action, but also due to terrorist acts, which are becoming increasingly widespread, the inflow of investments will rapidly dry up with all the ensuing consequences.


Study carried out under the scientific research project Zwischen Russland und China: Reformmodelle und Governance in Zentralasien, financed by Volkswagenstiftung.
1 See: H. Clement, M. Knogler, M. Troschke, Das Great Game am Kaspischen Meer und die russische Integrationspolitik. Stand und Perspektiven der Wirtschaftlichen Integration in Ostmitteleuropa und der GUS, Osteuropa-Institut München, Working Papers, No. 216, December 1998.
2 See: K. Sarsenova, A Line of Partnership at the Caspian Sea Is Defined, The Times of Central Asia, 29 May, 2003.
3 A. Budaev, Problema politiko-pravovogo statusa Kaspiiskogo moria, Mirovaia energeticheskaia politika, No. 4, June 2002.
4 See: V. Panfilova, Trekhstoronnii dogovor po Kaspiiu zakliuchen, Nezavisimaia gazeta, 21 June, 2003.
5 See: V.F. Grunin, Pravovoi status Kaspiiskogo moria i problemy natsionalnykh interessov Rossiiskoi Federatsii v prikaspiiskom regione, Zhurnal teorii i praktiki Evraziistva, No. 13, 2001.
6 See: A.I. Gusher, Geostrategicheskie izmereniia Kaspiia, Zhurnal teorii i praktiki Evraziistva, No. 22, 2003.
7 See: A. Fakirli, Neftianoi bum otkladyvaetsia, Neftegazovaia vertikal, No. 13, 2001.
8 See: A. Zharikbaev, Printsipy sotrudnichestva po razvedke, dobyche i razdely, Internet newspaper Gazeta.kz, 27 June, 2003 [http://www.gazeta.kz].
9 See: A. Dubnov, Razgovory o 20-protsentnom printsipe razdela Kaspiiapoteria vremeni, Vremia novostei, 19 May, 2003 [http://www.rambler.ru/db/news].
10 See: M. Kutuzova, Eksport nefti i gaza rossiiskogo regiona, Federal reference guide, Rossianeft, 5 May, 2003 [http://www.rusoil.ru/review].
11 See: Die Energiewirtschaft am Kaspischen Meer: Enttäuschte Erwartungenunsichere Perspektiven, Wochenbericht des DIW 24/98.
12 See: V. F. Grunin, op. cit.
13 See: A. Kurtov, The Turkmenistan Fuel and Energy Complex: Problems and Prospects, Central Asia and the Caucasus, No. 3 (9), 2001.
14 See: V. Kirichenko, Kaspiiskaia buria v bokale KLIKO, Ekspress K, 30 January, 2000 [www.Caspinfo.ru].
15 See: O. Vinogradova, Turkmenskii tiulpan, Neftegazovaia vertikal, No. 12, 2001.
16 See: S. Niyazov, Po Kaspiiu raznoglasii mezhdu Kazakhstanom i Turkmenistanom net, CAN, 5 July, 2001 [www.Caspian.ru].
17 See: A. Dubnov, My ne protiv mnogovektornosti marshrutov eksporta nefti, Vremia novostei, 28 February, 2003 [http://www.vremya.ru].
18 See: A. Dubnov, Razgovory o 20-protsentnom printsipe razdela Kaspiiapoteria vremeni.
19 See: I. Korotchenko and M. Kozhushko, Tonkaia diplomatia Sergeia Ivanova, Nezavisimaia gazeta, 28 February, 2003.
20 I. Plugatarev, Voennye igry na Kaspii, Nezavisimaia gazeta, No. 31 (2864), 17 February, 2003.
21 See: In the Kazakh Sector of the Caspian Sea Frontier Control Has Intensified, The Times of Central Asia, 29 May, 2003.


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