Debate over legal status of Caspian Sea continues

Yesterday foreign ministers of the Caspian countries – Russia, Kazakhstan, Azerbaijan, Turkmenistan, and Iran – met in Moscow to prepare for the 4th summit of Caspian states in September. The legal status of the Caspian Sea with its rich reserves of petroleum and natural gas is up for debate. With few borders for maritime territories delineated between the five countries, regular conferences between the countries representing the Caspian region is one of the only effective ways to enhance governance and cooperation in the region.

Tensions simmer beneath the surface, however. Azerbaijani Foreign Minister Khalaf Khalafov declared that Azerbaijan and Turkmenistan are negotiating a “disputed deposit” in the Caspian Sea between Azerbaijan and Turkmenistan.

Russia has joined with Iran in the past to argue for common ownership of the sea by all five states, aiming for potential veto power over Western involvement in the region, but Russia has shifted its stance to dividing the seabed (and oil and gas beneath it) into national sectors, while leaving surface waters for common use. Russia has already signed bilateral treaties with Azerbaijan and Kazakhstan, claiming the northern part of the seabed into three national sectors. Russia seeks to block Western countries from exporting the oil from the region to their regional markets, hoping to cultivate another trump card in the form of energy dominance.

News Briefs:

  • A drug smuggler at Kabul International Airport was arrested with 854 grams of heroin. The Interior Ministry released a statement yesterday declaring that the smuggler was an Afghan national and had been trying to smuggle the heroin inside capsules inserted into his stomach. This incident is only the latest in a string of busted drug smuggling out of the country, with an Italian citizen arrested in March. Cultivation of opium continues in Afghanistan despite the international backlash against Afghanistan for flooding the world with cheap supplies of the drug.
  • The defense ministers of Azerbaijan and Kazakhstan, Colonel General Zakir Hasanov and Serik Akhmetov, met to discuss military cooperation on April 21. Hasanov was quick to declare that the main threat to stability in the region is the Armenian-Azerbaijani conflict, but stressed that the conflict should be resolved in the confines of international law.
  • The Turkmenistan-Afghanistan-Tajikistan (TAT) railway project’s strategic importance was stressed during a session of the Turkmen-Tajik Intergovernmental Commission on Economic Cooperation in Ashgabat yesterday. The participants reasserted their support for the project, which has been called a risky venture by the Asian Development Bank for its passage through war-torn Afghanistan. Coming on the heels of a successful election earlier in the month, the announcement is likely attempting to attract more investment.
  • Turkmenistan Airlines, with the permission of President Gurbanguly Berdimuhamedov, will sign another contract with Boeing for three 737-800 airplanes in an attempt to modernize its fleet and ensure safety, according to the President’s official statement.
  • New Kyrgyz Prime Minister Joomart Otorbaev has given an interview with RFE/RL’s Kyrgyz Service. He gave an optimistic appraisal of Kyrgyz economy, claiming that “even without revenues from Kumtor gold-mining project, the country’s economic growth was some 10.5% in 2013 against an inflation rate of 4%. He also addressed the legacy of corruption in the mining industry, claiming that the Kyrgyz belief that any foreign investor doing business in Kyrgyzstan has used corrupt means to obtain state licenses and dismissed protesters against the Customs Union.
  • Gazprom announced plans for a new gas pipeline in Kyrgyzstan to be constructed, potentially connecting its contentious southern and northern regions and supplying regions devoid of electricity with power. President of Kyrgyzstan Atambayev added further that “Gazprom will cover the debts of KyrgyzGas totaling USD $40 million and will attract investment.” The plans, coming soon after Gazprom purchased a 100% controlling stake in KyrgyzGazProm and Bishkek Fuel Company, is testament to Gazprom’s rapid expansion into the Kyrgyz market.
  • A Ukrainian court seized an Odessa oil refinery, the Ukrainian Interior Minister announced yesterday. Ownership of the refinery has been called into question after reports that it had been acquired by a Russian bank. The story goes that Ukrainian Vetek bought the refinery from Russian Lukoil last year, but that Vetek transferred ownership to a Russian state-controlled bank VTB after failing to repay a loan to buy the plant. Disruptions in energy supplies flowing through Ukraine nonwithstanding, French energy giant Total has defied pressure to disengage from its Russian projects.

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