Magazine article Washington Report on Middle East Affairs

With Billions of Petrodollars at Stake, Russia Offers Compromise on Whether Caspian Is Sea or Lake

Magazine article Washington Report on Middle East Affairs

With Billions of Petrodollars at Stake, Russia Offers Compromise on Whether Caspian Is Sea or Lake

Article excerpt

With Billions of Petrodollars at Stake, Russia Offers Compromise on Whether Caspian Is Sea or Lake

The meeting of Kazakh President Nursultan Nazarbayev and Russian President Boris Yeltsin on April 9 seems to have opened a new phase in the developments on Caspian Sea oil. The presidents agreed that a document on the status of the Caspian and, thus, how to share its wealth would be prepared for April 28.

This date coincides with a meeting in Moscow of the Customs Union among Russia, Belarus, Kazakhstan and Kyrgyzstan. And the Customs Union meeting immediately precedes the CIS (Commonwealth of Independent States) summit April 29.

The disputes over the oil-rich Caspian and the mineral resources of the surrounding area are long-term ones. From the very beginning, Iran and Russia were trying to persuade the other three Caspian states -- Kazakhstan, Azerbaijan and Turkemenistan -- to share the point of view of Moscow and Tehran on the matter. The Caspian, they said, was a land-locked "lake," and all who surround it should share jointly. Azerbaijan and Kazakhstan openly refused, insisting that the Caspian is a sea, and that it is necessary to establish sectors among the five Caspian states, taking into account the coastal length of each country. Turkmenistan tried to be neutral, changing its viewpoint several times.

Russia recently expressed a new attitude, saying it agrees the seabed of the Caspian could be divided into sectors, but the water itself, and anything in it, should be considered common property of the five states. Moscow also demanded free surface navigation for all ships of the five states.

In another surprise move, Russia announced that it would pay, this year, part of its $115 million debt to Kazakhstan for use of the Baikonur Space complex. The balance of $345 million will be paid off over several more years.

This has been a top problem in Russia-Kazakhstan relations. Russia has made no payments on the Baikonur lease nor for several military test fields in various regions of Kazakhstan. For its part, Russia has complained of Kazakhstan's energy-related debts.

Kazakh officials have, on various occasions, proposed six oil-transport routes. The first (called Atyrau-Samara) extends from western Kazakhstan to Samara, Russia.

The second (known as KTK -- Konsortsium Kaspiyskiy Truboprovod) is a planned pipeline across the Caspian seabed. …

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