Oil and Geopolitics in the Caspian Sea Region

By Michael P. Croissant; Bülent Aras | Go to book overview

5

Azerbaijan: Oil and Politics in the Country's Future

Nasib Nassibli

During the Soviet era, the name “Azerbaijan” conjured up a terra exotica in the mind of Western readers. Towards the end of the Soviet Union, Azerbaijan was mentioned frequently in association with the Karabakh conflict. Recently, the furor about Caspian oil has gained renewed attention for Azerbaijan; the fact that it has been the topic of the world's attention so often in this century—because of its oil resources or its cultural and geographical fascination—indicates that Azerbaijan will dominate the attention of world events in the future.

Today, as in the past, oil constitutes a major component in the political and economic life of Azerbaijan. During the early years of the country's independence in the 1990s, it became apparent that the claims of the existence of large hydrocarbon reserves, which the Soviets considered to be anything but rumors, were real. As a result, talks began with the world's largest petroleum companies. It was soon realized that utilizing the oil deposits in the Caspian off the shore of Azerbaijan would require a large capital base and advanced technology.

The main obstacle to realizing the newly discovered wealth is the geographic location of the Republic of Azerbaijan. Since the country has no access to the sea, Azerbaijan has to transport its oil through other countries in order to market its wealth. In the beginning of the 1920s, Azerbaijan's direct territorial links with the Turkish Republic—the country's main strategic ally—were severed by Russian and Armenian intrigues. Today, while Azerbaijan is struggling to consolidate its independence, it is once again witnessing the old expansionist policies of Russia, An independent Azerbaijan with a strong economy and democratic political structure will not suit Russia or its other large neighbor—Iran. Further, Armenia's collaboration with Russia and Iran in the South Caucasus has caused the entire region to become a hostage of the well-known Karabakh conflict. Azerbaijan's only land connection to Europe is Georgia, a country that is itself in a difficult geopolitical situation. Thus, the Georgian-Turkish path is Azerbaijan's only window to the world. Azerbaijan's access to the world means

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