Azeri and Turkmen relations dive in Caspian oilfield spat

By bne IntelliNews June 20, 2012

Clare Nuttall in Almaty -

A diplomatic row has broken out between Azerbaijan and Turkmenistan over the ownership of an offshore oilfield in the Caspian Sea, with the pair accusing one another of "illegal" moves and issuing threats of further "action" against one another.

Turkmenistan is reported to have started exploration work at the field - known as Kapaz in Azerbaijan and Serdar in Turkmenistan - which lies on the maritime border between the pair's Caspian waters. On June 18, the Azeri Ministry of Foreign Affairs (MFA) summoned Turkmen Ambassador Toyli Komekov.

At the meeting, Deputy Foreign Minister Khalaf Khalafov "strongly objected" to the attempt by Turkmen geologists to start seismic work in the area, according to a statement on the Azeri MFA website. "The illegal activities of Turkmenistan in the Caspian Sea, are unacceptable to Azerbaijan, which is taking appropriate actions in connection with the protection of their sovereign rights," Khalafov said.

The following day, Turkmenistan's Foreign Ministry responded with its own statement saying that it had sent a diplomatic note to Azerbaijan "strongly protesting" the "illegal actions" by Azerbaijani border guards "against [a] civilian vessel conducting research and development in the sector of the Caspian Sea which does not belong to Azerbaijan."

"It was also stressed that in case of continuation of such provocations the Turkmen side would take appropriate actions," says the statement, which was published by quasi-official news site

Ashgabat and Baku signed a deal in 2008, under which they agreed not to explore the field until issues concerning the depth of the sea bed and the division of the field could be resolved. The Kapaz/Serdar field has estimated reserves of 80m tonnes of oil and 32bn cubic meters of gas. It was discovered by Azeri geologists in 1959, when both Azerbaijan and Turkmenistan were part of the Soviet Union. Drilling started in 1986 but was put on hold after the breakup of the Soviet Union in 1991.

Since then, the pair has been unable to reach agreement on how the subsea resources should be divided. Azerbaijan wants to divide the sea along a median line from the shore, while Turkmenistan insists that the oilfield's location relative to the shore should be taken into account.

Disputes over the delimitation of the Caspian Sea between all five littoral states have held back drilling work for the last two decades. The disagreements also prevented the construction of a proposed subsea pipeline that would carry gas from Central Asia to Baku, allowing Kazakhstan and Turkmenistan to bypass Russia whilst pursuing gas exports to Europe.

Before 1991, the sea was divided between Iran and the Soviet Union, but the situation is now clearly far more complex. Russia - backed by Azerbaijan and Kazakhstan - wants the sea to be divided according to the length of each country's coastline. Iran, which would get just 12-14% of the sea by this measure, says that each country should get 20%. Turkmenistan has wavered between the two, but since President Gurbanguly Berdymukhamedov came to power has moved closer to the Russian position.

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