Azernews.Az

By Sara Rajabova

The importance of the resource-rich Caspian Sea in world politics, investments and energy security was discussed in Istanbul during the Caspian Forum last week, with discussions focusing on the role of energy resources of the region in Eurasian energy supply and economic development of the coastal countries.

Officials, experts, representatives of international organizations, companies, media and NGOs from Turkey, Azerbaijan, Russia, the United States, Britain, Israel, and Georgia attended the forum, which was organized by the Caspian Strategy Institute.

Delivering a keynote speech at the event, Secretary General of the Institute, Haldun Yavas, said the forum was an opportunity to promote regional cooperation, which would expand investments and trade between the countries of the region.

Yavas stressed the critical importance of the Caspian region, which attracts the attention of all world countries today.

Former US Secretary of Defense Robert Gates said in his remarks that the U.S. is encouraging peaceful resolution of frozen conflicts in the region in line with international law.

Gates said the unresolved Armenia-Azerbaijan conflict over Nagorno-Karabakh has become an obstacle to regional cooperation in the energy sector. He underlined the importance of both governments' putting forward strong will to reach a solution.

The former secretary of defense noted that the five Caspian littoral states - Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran - have failed to agree many times on the status of the Caspian Sea though talks have been ongoing for more than 20 years.

According to Gates, however, negotiations are continuing on construction of the Trans-Caspian gas pipeline to Europe -- which is part of the EU's efforts to diversify the routes and sources of energy supply and thereby increase its energy security.

The Trans-Caspian pipeline running around 300 kilometers is to be laid from the Turkmen coast of the Caspian Sea to Azerbaijan, where it will be linked to the Southern Gas Corridor.

The negotiations between Turkmenistan and the EU and other countries on the construction of the pipeline have been held since late 1990s.

In September 2011 the EU authorized negotiations between the EU, Azerbaijan and Turkmenistan on the Trans-Caspian project.

Gates also said that with the signing of the U.S.-Georgia Charter on Strategic Partnership bilateral cooperation strengthened based on the U.S. support for Georgia's territorial integrity and its commitment to democratic reforms.

"The US assistance is designed not only to aid recovery from the 2008 conflict but also help Georgia progress politically and economically," he said.

In August 2008, diplomatic tensions and clashes between Georgia and South Ossetia erupted into a brief war between Russia and Georgia. Moscow crushed a Georgian assault to reassert control over Abkhazia and South Ossetia and later recognized the rebel regions. In response, Tbilisi broke off diplomatic relations with Moscow and announced the two unrecognized republics as occupied territories in September 2008.

Turkish Deputy Foreign Minister Naci Koru said that energy resources of the Caspian Sea are a key for international energy security.

"The Caspian region has strategic importance. And Turkey is fully committed to the development of relations with all countries of the Caspian region," Koru said.

He said Turkey is committed to peace, dialogue and cooperation with the coastal nations.

Koru also stressed the negative impact of the conflicts flaring in the region. "Turkey will make every effort to contribute to the resolution of the conflicts, and we support territorial integrity, in particular, that of Azerbaijan," he said.

Also addressing the forum, Azerbaijani Deputy Foreign Minister Khalaf Khalafov said that Azerbaijan today has a powerful infrastructure system, which allows it to play an important role in ensuring Europe's energy security and act as a reliable partner.

The Contract of the Century signed in 1994 with energy majors served to opening a new page in Azerbaijan's oil and gas sector. Since 1995, investments worth over $120 billion have been made in Azerbaijan's economy, Khalafov said.

According to Khalafov, ensuring peace and security as well as sustainable economic development in the Caspian region should be the key goal.

He said progress has recently been observed in bringing closer the coastal states' positions on the Caspian status.

"Azerbaijan, Kazakhstan and Russia have reached an agreement, and we hope that there will be an agreement with Iran and Turkmenistan," Khalafov said.

He also said Azerbaijan is ready to contribute to the implementation of the Trans-Caspian gas pipeline project.

"Azerbaijan is ready to provide its territory for transit of Central Asian gas," he said.

During his speech Khalafov also touched upon the Nagorno-Karabakh conflict.

"For over 20 years, Azerbaijan has suffered from occupation of 20 percent of its territories by Armenia, as a result of which one million Azerbaijanis became refugees and IDPs. Armenia does not observe decisions taken by international organizations. If we want to see Eurasia stable, it is necessary to end the occupation based on international norms," Khalafov said.

Turkish Energy Minister Taner Yildiz in his speech at the forum noted the importance of the TANAP project, which aims to transport Azerbaijan's natural gas across Turkey to European markets.

"We have been holding talks with the European Union on membership, but the EU has not yet started discussions on energy. But at a time we are experiencing this problem with the EU, the TANAP project, which we signed with Azerbaijan, can be a very important factor in the uninterrupted supply of energy to Europe," Yildiz said.

Yildiz said that the Shah Deniz consortium is to make a decision whether the pipeline would reach Austria via Bulgaria or Italy via Greece, adding that Turkey would not be a part of this decision but it would make a contribution.

If TANAP is constructed, it will transport gas during the second stage of developing Azerbaijan's giant Shah Deniz gas field in the Caspian Sea.

Delivering a speech at the forum, head of Azerbaijani Presidential Administration's social and political affiars, Ali Hasanov, said the Caspian region is one of the most important geo-political, geo-strategic and geo-economic regions at the end of the last century and beginning of the third millennium.

"The Caspian Sea and its basin is one of the world regions rich in alternative sources of energy, and a region which the world again wants to enter in search of energy," Hasanov said.

"As is known, no foreign country had been present in the Caspian Sea, except Iran and the Soviet Union, from 1921. Some 86 percent of the region belonged to the Soviet Union, and 14 percent - to Iran. Iran engaged in fishing in the region mostly. In the Soviet Union, only Azerbaijan was engaged in oil and natural gas production at sea," he said.

Hasanov underlined that a new stage of the Caspian Sea began in 1994 whenAzerbaijani national leader, former President Heydar Aliyev created and firmly pursued Azerbaijan's new oil strategy.

The Presidential Administration official said that in a geographical context, the Caspian Sea is the center of Eurasia, five countries are located around the sea, the peoples of these countries have historically lived there, and that the area was once the center of wars and ethnic conflict.

In the geo-economic concept, Hasanov said, the Caspian Sea has become one of the most important regions of the world at the end of the 20th and the beginning of the 21st century, given that the Caspian states' energy resources can meet today's needs of the world, Hasanov said.

"That is, from an economic point of view, the whole world has focused on the Caspian Sea," he said.

Furthermore, Hasanov spoke about the new period of the Caspian Sea and Azerbaijan's new oil policy.

Hasanov underlined the importance of the Baku-Tbilisi-Ceyhan oil pipeline in delivering Azerbaijan's energy resources to world markets.

He also said Turkey has turned into one of the major energy centers and plays an important role in the distribution of energy in the world.

Speaking to the Caspian forum, Azerbaijani Presidential Administration's political analysis department head Elnur Aslanov said that Armenia must comply with international law and withdraw its troops from Azerbaijan's territory.

"Only then real peace and stability will be [established] in the region. We believe that the solution to the ongoing conflict over Nagorno-Karabakh is vital for the well-being of the entire South Caucasus region and Eurasia," Aslanov said.

Aslanov stressed that the total economic damage caused by the Nagorno-Karabakh conflict is estimated at $431 billion.

"At the same time, Azerbaijan and Armenia increase their military budgets. In addition, we have a huge humanitarian catastrophe - approximately one million refugees and internally displaced persons - due to the occupation of 20 percent of Azerbaijani territories by Armenia," Aslanov said.

"But our patience is not unlimited. The time to resolve this conflict has come," Aslanov added.

He said all the steps by Baku show that the country is committed to a peaceful resolution of the conflict.

"We have the will and desire to solve this problem. But unfortunately, there have been no such signals from the other side," Aslanov said.

"Nevertheless, we are ready to continue the negotiations on the status of Nagorno-Karabakh within Azerbaijan," he added.

The Karabakh conflict emerged in 1988 when Armenia made territorial claims against Azerbaijan. The two South Caucasus neighbors fought a lengthy war that ended with the signing of a precarious cease-fire in 1994. Armenian armed forces have since occupied over 20 percent of Azerbaijan's internationally recognized territory. Peace talks have been largely fruitless so far.

Armenia has not yet implemented the U.N. Security Council's four resolutions on a pullout from Nagorno-Karabakh and the seven surrounding regions.

Aslanov pointed out that Azerbaijan is also a major strategic partner and guarantor of energy security of neighboring Georgia.

"Azerbaijani companies have a large share in the Georgian economy. For example, SOCAR [Energy] Georgia plays an important part in the economic development of Georgia and is one of the country's largest taxpayers," he said.

Aslanov said Azerbaijan's share in the total investments in Georgia in the first half of 2012 amounted to just over 10 per cent.

"Azerbaijan invested $48.8 million in Georgia. It is next only to the Netherlands (37 per cent) and the U.S. (11 per cent). Azerbaijan's total investment in the Georgian economy is nearing $3 billion," the official said.

He went on to say that Azerbaijan is a guarantor of diversification of energy supplies to Europe.

"Azerbaijan is one of the main suppliers of energy to Turkey, and this relationship is still developing and growing. Soon 10 billion cubic meters of Azerbaijani natural gas will flow through Turkey to Europe, and we plan to increase this trade to more than 20 billion cubic meters per year," Aslanov said.

He pointed out that Azerbaijan has become an investor and expresses its readiness to contribute to the development of its neighbors and partners.

"To date, Azerbaijan's investment abroad constitutes $5 billion and is expected to increase several times in the short term. Azerbaijani investment will play a role in the progressive development of Georgia, Turkey, Ukraine and other countries of the Black Sea region, which will create a favorable environment for the effective implementation of regional projects," he said.

The Caspian Forum ended with an awards ceremony. The Caspian Statesman Award, Caspian Project of the Year Award, Caspian Sports Award, Caspian Art Award and Caspian Scholar Award were presented.