BAKU-MOSCOW CASPIAN DEAL ANOTHER BLOW TO ISLAMIC REPUBLIC
By Hamid Sahra’I, IPS Energy Correspondent
LONDON 24 Sept. (IPS) As expected, isolated Islamic Republic rejected Tuesday as "null and unacceptable" bilateral accords signed Monday by Russia and the Republic of Azerbaijan defining their borders in the Caspian Sea.
"This type of accord signed on a bilateral basis is invalid in our eyes", Iranian Foreign Affairs Ministry spokesman Hamid-Reza Asefi told reporters.
The agreement, signed by Azerbaijani President Heydar Aliyev and his Russian counterpart Vladimir Putin was the second blow to Tehran, as it came days after the official launch of the Baku-Tblisi-Ceyhan (BTC) pipeline taking Azeri oil to European markets via Turkey.
Both signing presidents defended the move but also promised to continue negotiations with Iran.
"Iran's position has not changed. We have determined our position and have signed the agreement with Russia, but we are working with Iran. Our experts are meeting both in Iran and here", added Aliyev, a former senior KGB officer.
"This is a positive step in solving the issue of Caspian Sea’s legal status and we hope that other nations of the region would join us", Mr. Putin commented.
The accord divides the Caspian seabed along a modified median line, but is opposed by both Iran and Turkmenistan, insisting on an equal sharing of the Sea’s waters by the five littoral nations, giving Iran the control of 20 percent of the Sea’s bed, including some parts of prospective oilfields that Azerbaijan insists belong to it.
In their last Summit held at Eshqabad, the Capital of Turkmenistan on 24 April, Turkmen President Saparmurat Niyazov, Azerbaijani President Heydar Aliev, Iranian President Mohammad Khatami, Kazakh President Nursultan Nazarbayev and Russian President Vladimir Putin, failed to agreed on how to divide Caspian Sea resources, estimated at world’s largest after those of Persian Gulf and Siberia.
As Iran insists on the equal sharing of Caspian resources, Russia, Kazakhstan and Azerbaijan, whose Caspian coastlines are longer, want the sea divided into portions whose size is based on the length of each country's shoreline and which end at a median line drawn down the middle of the sea.
Such a division would give Iran only a 13-percent share of the Sea that some experts, including Mr. Bahman Aqa’i Diba, an Iranian Council to several international oil firms, says has not much oil.
"Any unilateral measure or agreement that fails to consider the consensus among Caspian littoral states will never help resolve the disputes (but) rather will
merely spur misunderstandings", Tehran has warned.
"Although the Islamic Republic has repeatedly rejected any unilateral deals over the energy resources of the Caspian Sea as null and void before the issue of the sea's legal regime is settled, certain littoral states seem to be loathe to take notice of Iran's amicable approaches to settling Caspian issue", repeated Tuesday the English-language daily "Tehran Times", which is controlled by Iranian conservatives.
"Russia, that heads a camp with Azerbaijan and Kazakhstan advocating the division of the sea according to each country's shoreline, seems to be not very interested in Iran's position that any decision on the sea's resources requires the consensus of all five littoral states", it added.
"The conclusion of bilateral accords to divide Caspian Sea resources flies in the face of the agreement of the littoral states at the Ashkhabad Summit to the effect that any effort to draw up the legal regime of the sea must win the approval of all littoral states", the paper said, urging Russia and Azerbaijan to "remember that the Islamic Republic will never accept any bilateral deals to determine the fate of Caspian energy resources before the issue of the legal regime of the Caspian is settled".
"The new Moscow-Baku agreement follows the failure of talks in April on a broader deal between five Caspian littoral states - Azerbaijan, Iran, Russia, Kazakhstan and Turkmenistan", Mr. Aqa’i Diba told Homayoon Majd, the Washington correspondent of the Persian service of Radio Free Europe-Radio Liberty.
"Tehran's moderate approach in dealing with Caspian issues must never be misunderstood as a sign of weakness or indifference to the fact that other nations are ignoring its rights", said the daily.
"But there not much Iran could do against others sharing the Caspian resources between them", Mr. Aqa’i Diba told the Prague-based Radio station.
"If Iran uses force, it would face both Russia and the United States. If it goes to international courts, it would loose, not only because of its isolation on international scene, but also because the others have acted on internationally recognised principles", he explained.
"The new deal between Moscow and Baku would further isolate Iran and Turkmenistan, who could be forced to soften their positions on the division of the Caspian", Mr. Aqa’i Diba said, adding once Eshqabad’s differences with Azerbaijan solved, it would also join Moscow, Almati and Baku on the median line, leaving Tehran alone.
"The Russian-Azeri agreement is the logical continuation of our bilateral work and it will be a very important event for the whole Caspian region", Azeri Foreign Minister Velayat Guliyev said.
The landlocked sea has needed a new legal status since the breakup of the Soviet Union in 1991. Until then, it had been governed by a 1940 agreement between Iran and the Soviet Union, then the only littoral states.
Tensions remain high in the Caspian, especially between Azerbaijan and Iran, whci, last year, sent its gunboats to chase off Azeri vessels that were exploring the Alov (Alborz, for the Iranians) oil block for the oil giant BP.
BP has said it would not explore until Iran and Azerbaijan ended the row.
The inter-state conflicts are forcing foreign investors to hold off one some critical multi-billion dollar investments.
However, after several failed attempts to resolve territorial issues with its Caspian neighbours, Iran appears poised to begin developing unilaterally its energy resources in its portion of the sea, experts said.
While Tehran does not seem intent on trying to develop resources in disputed areas, the announcement is sure to raise regional tension. Iranian Oil Minister Bizhan Namdar-Zanganeh told the Iranian official news agency IRNA on 23 May that Tehran would begin operations on the Caspian seabed without the consent of its neighbors once $300 million worth of drilling equipment is fully installed.
The Minister stated that Iran's two-year drilling projects would take place in the southern sector of the Caspian. He declined to specify whether Iran intended to explore the Alborz oilfields that lie in a disputed area currently claimed by both Iran and Azerbaijan.
"Yet rather than reflecting a coherent change in strategy, Tehran's dramatic alteration of policy is a manifestation of its inability to control the Caspian situation in the face of other regional developments", Dr. Parveez Mina, a former director of the Iranian national Oil Company (NIOC) now an international oil consultant based in Paris, told Iran Press Service.
Iranian leaders also perceive Russia’s military buildup in the region as a threat to their negotiating position on the Caspian issue.
Shortly after the late April Eshgabad summit, President Putin called for massive military exercises in the region that will involve the Caspian fleet, border guards, the Fourth Air Force Group and troops from the North Caucasus Military District. The size of Russia's Caspian flotilla has expanded in recent years, with several rapid-attack craft arriving from the Baltic and Black Sea fleets.
Adding to this already sizeable force, Russia will soon deploy a ship that will be the Caspian's largest and armed with the latest missile and artillery equipment. A land-site missile base has also been relocated from the Baltic to the Caspian region.
Though Russian and Iranian territorial interests in the area do not openly clash, Russian oil companies are set to profit from Azerbaijan's oil fields, and the threat of conflict perpetuated by Iran has hampered investment in Russia's sector of the Caspian.
The impending display of Russian military force may work to undermine Iran's coercive diplomatic strategy while simultaneously reducing Tehran's negotiating clout. While much has been made of the American military presence in Georgia and Central Asia, the United States has also been helping Azerbaijan to enhance its naval capabilities in the Caspian.
In late March, US and Azerbaijani military officials held high level consultations concerning maritime defence, and the US Air Force has expressed interest in acquiring a base in Azerbaijan. In addition, Congress has lifted a ban on arms exports to Azerbaijan and has begun to render tangible military support to Baku.
Such assistance leaves Baku less susceptible to Iranian military and diplomatic pressure. On May 31, Ilham Aliyev, the son of the Azerbaijani President and deputy head of the SOCAR state oil company, said Azerbaijan would not back down in the face of Iranian pressure.
Thirty-eight new Iranian warships were recently deployed in the Caspian, and Tehran seems to be trying to keep some leverage by fomenting conflict until the other littoral states, most notably Azerbaijan, capitulate to their demands.
The dangers of this new approach are self-evident; as any attempt by Iran to forcibly annex disputed oilfields via pre-emptive drilling could lead to a military escalation far more dangerous than the gunboat incident of last summer. ENDS MOSCOW-BAKU CASPIAN ACCORD 24902