Turkmen-Azeri oil dispute to go to UN court

Turkmenistan says it is taking its dispute with Azerbaijan over the ownership of potentially lucrative sections of the energy-rich Caspian Sea to the United Nations.

Oil and gas minister Kakageldy Abdullaev said in a statement that Turkmenistan would pursue its claim for the contested oil-and-gas zone at the United Nations` International Court of Justice.

Tensions between Turkmenistan and Azerbaijan over the territory flared earlier in June after an Azerbaijani border patrol boat stopped a Turkmen vessel that Ashgabat said was conducting research in the disputed region.

The two sides have accused each other of provocations and vowed to defend their rights.

The dispute between Ashgabat and Baku is mainly over the Kapaz field, referred to as Sardar by the Turkmen side. Experts estimate that the Kapaz field could hold about 50 million tons of oil.

Abdullaev claimed that on the basis of the Caspian median line delineated in accord with internationally accepted principles, the Sardar field is located completely in the Turkmen sector of the basin.

The minister said Turkmenistan has repeatedly demanded to halt operations in the territories whose legal status has not yet been defined, in particular, Osman and Omar fields, referring to the Azeri and Chirag offshore deposits being developed by an international consortium consisting of world energy majors. He claimed that Baku has ignored these calls, therefore, Ashgabat sees no solution other than taking the matter to court.

Abdullaev alleges that the operations carried out in these territories by SOCAR, BP, Chevron, ExxonMobil, Hess, Inpex, Itochu, Statoil and TPAO -- the Azeri-Chirag-Gunashli (ACG) project shareholders -- run counter to international legal norms.

Abdullaev added that Turkmenistan was disappointed over what he called uproar raised over the issue by Azerbaijani media, which ``does nothing to strengthen friendship relations`` between the two countries.

Two of the mentioned fields are part of Azerbaijan`s major Azeri-Chirag-Gunashli (ACG) offshore block being developed under the historic agreement referred to as the Contract of the Century which was reached by the South Caucasus republic with Western companies in 1994.

The other field, Kapaz, was discovered by Azerbaijani oil workers. During the Soviet era, the field was considered ``intermediate`` due to its being located on the median line between Azerbaijan and Turkmenistan. A major dispute over possession of the field surfaced between the two countries in the 1990s.

During talks on the legal status of the Caspian, Baku previously offered Ashgabat joint development of the Kapaz field.

Azerbaijan, Russia and Kazakhstan have signed their own bilateral deals dividing 64 per cent of the Caspian Sea among them. Turkmenistan and Iran do not recognize the agreements, but the countries have used the deals to start developing oil and gas resources in the sea.

Turkmenistan had leveled claims to the Kapaz oil field as early as during the tenure of its former leader Saparmurat Niyazov. Later, tensions temporarily subsided, and the incumbent Turkmen President, Kurbanguly Berdymukhamedov, paid an official visit to Azerbaijan in May 2008, while his Azerbaijani counterpart Ilham Aliyev visited Turkmenistan in late November. Thus, a rapprochement discerned in Azerbaijani-Turkmen relations, and, for some time, it appeared as if the dispute between the two countries had come to an end.

Some analysts believe Russia has a hand in the dispute. They say this is not a new issue, as Turkmenistan had put forth its claims to Azerbaijan when the project on the Baku-Tbilisi-Ceyhan (BTC) main export pipeline came to the forefront. According to the pundits, Russia, which is opposed to the exports of gas from Azerbaijan and Turkmenistan to Europe, is seeking to purchase and sell both countries` natural resources on its own.