Moscow appears to be softening slightly its stance on division of the Caspian Sea territory among the states that border it. But it remains to be seen how quickly the five littoral states-Iran, Russia, Kazakh- stan, Azerbaijan, and Turkmenistan-will settle their dispute over ownership of natural resources in the waters.
Iran and Russia have argued that the sea should be shared in a condominium-type arrangement, under which income from developing Caspian Sea resources would be shared proportionately by the littoral states. Kazakhstan, Azerbaijan, and Turkmenistan, on the other hand, want clear, agreed-upon international boundaries in the waters.
Meanwhile, Russian energy giants Lukoil, Yukos, and Gazprom have agreed to form a joint venture to explore hydrocarbons in the Caspian Sea. This represents a great leap forward for Yukos, which is following the example of Lukoil by expanding the geographical scope of its operations.
Russia's stance
Addressing the seventh international Oil & Gas Exhibition in Baku earlier this month, Andrei Urnov, head of a Russian Foreign Ministry working group on the Caspian, disclosed that, pending a formal agreement by all five Caspian littoral states on the sea's legal status, Moscow now advocates, "on an interim basis," dividing the seabed into national sectors while preserving general use of the sea's waters and surface.
Urnov added, however, that no subsea pipelines should be built until the littoral states reach a formal agreement on the sea's status or at least resolve environmental problems. Unusually high concentrations of mercury in coastal waters have been blamed for the deaths of thousands of seals off the coast of Kazakhstan and Dagestan in recent weeks. Urnov's proposed moratorium on subsea pipeline construction could further hinder plans for the beleaguered Trans-Caspian gas pipeline, to which both Moscow and Tehran have expressed opposition on environmental grounds. That pipeline is intended to transport Turkmen gas to Turkey via Azerbaijan.
Iran's stance
Iran also has expressed its eagerness to settle the territorial dispute. President Mohammad Khatami said at a recent summit of regional leaders that Tehran is prepared to share Caspian Sea resources in an equitable manner.
Opening the discussions at the summit of the Economic Cooperation Organization, Khatami suggested that the Caspian Cooperation Organization, formed when the Soviet Union broke apart, should be reactivated in order to work out a system for sharing Caspian resources. Previously, Iran had called only for setting up a collective legal framework to determine the distribution of the resources.
Iran, Turkey, and Pakistan founded the group in 1985 to promote regional economic cooperation. ECO accepted Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan as new members in 1992 and Afghanistan in 1993.
Caspian venture
The new venture, which has not yet been named, will explore for oil and gas in the northern Caspian, the partners said. They noted that equity in the venture would be split equally among the three companies but did not provide any other details.
Two years ago, Yukos lost out to Lukoil in a fight to receive the license granting exploration rights to the northern part of the Caspian Sea. Under this latest agreement, however, Lukoil has now resolved to share the investment risks of exploration with its former rival and with Gazprom.
Earlier this year, Lukoil and the Offshore Kazakhstan International Operating Co. consortium made what appears to be a major oil discovery in the Russian sector of the Caspian on the North Caspian Shelf (OGJ, Apr. 3, 2000, p. 32).
