Turkmenistan to sue Azerbaijan over oil fields
Turkmenistan considers as its own the oil and gas
fields in the Caspian Sea being developed by Azerbaijan and will
assert its rights in an international court, Turkmen television
quoted President Kurbanguly Berdymukhamedov as saying.
Berdymukhamedov said what he called the disputed part of the basin holds abundant natural resource deposits that Azerbaijan deems as its own.
"Turkmenistan considers as its own the oil and gas fields Osman, Omar as well as Sardar [Azeri, Chirag and Kapaz fields], which are located in the disputed part of the Caspian and are already being tapped by Azerbaijan," Berdymukhamedov said.
He claimed that, according to the legal acts in place since the Soviet times, these fields are within Turkmenistan`s borders and unequivocally belong to the Central Asian state. The Turkmen leader noted that the two countries have held talks on the issue 16 times, but as yet to no avail.
"Such unilateral activity in the Caspian Sea is unacceptable for Turkmenistan," Berdymukhamedov said.
Given the current situation, Berdymukhamedov has instructed his Foreign Minister, Rashid Meredov, to convene lawyers dealing with disputed maritime territories to prepare relevant documents for the international court of arbitration. The president emphasized that Ashgabat will accept any ruling on the matter that is issued by the court.
Berdymukhamedov also issued orders to inform international companies currently operating in the allegedly disputed part of the Caspian that, if the court rules to recognize the energy fields in question as fully or partly belonging to Turkmenistan, Ashgabat will demand that these companies reimburse Turkmenistan for any losses.
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, referred to as Sardar by the Turkmen side, was discovered by Azerbaijani oil workers and holds an estimated 150 million barrels of oil. During the Soviet era, the field was considered "intermediate" due to its being located on the medium 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.
Iran supports equal division in which each coastal state is to receive 20% of the sea.
Rustam Mammadov, the head of the Caspian-Partnership for the Future International Movement public union, says Ashgabat`s intent to conduct a scrutiny regarding the Kapaz field is legally unsubstantiated. According to him, there is no prospect for reviewing the case at the court of arbitration, as such hearings would require both countries to file lawsuits and this court does not consider unilateral claims.
"Turkmenistan is simply trying to take possession of the field, which was discovered by Azerbaijani oilworkers during the Soviet times and where Azerbaijan has injected considerable investments."
The analyst noted that Turkmenistan is seeking to take over not only Kapaz, but also the Azeri and Chirag fields, by delineating the maritime borders in its own way, without negotiating the Caspian status.
"If Turkmenistan were indeed right, it would behave differently," said Mammadov. "The truth is not on their side, and the method they are using has no legal basis whatsoever. On the other hand, Turkmenistan`s claims are not being accepted by any international oil company. This [Ashgabat`s actions] is merely of propaganda nature."
Political analyst Rasim Musabayov said bilateral talks were the best way to resolve the differences between Azerbaijan and Turkmenistan. But, if discussions fail to produce fruit, he believes settling the case in court is a decent option as well. "For this to be possible, however, the sides, having conducted talks, are required to file mutual suits so that the court would review the case upon [their] agreement."
Musabayov added it was unlikely that the litigation would reveal any premise for a dispute between Baku and Ashgabat over the Azeri and Chirag fields.
The analyst said, however, that the court might make a decision on the Kapaz field, i.e. its ruling might reflect the way the medium line in the Caspian should be drawn most fairly. He said settling the case in court could, in fact, benefit both sides and resolve the long-standing discrepancies between the two countries.
Also, Musabayov said Azerbaijan and Turkmenistan could join effort in countering Iran`s claims on the Caspian, as these allegations target not only Azerbaijan but also the Turkmen section of the basin.
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 Azeri-Turkmen relations, and, for some time, it appeared as if the dispute between the two countries had come to an end.
Azerbaijani former state adviser, political analyst Vafa Guluzada believes Russia has a hand in the dispute. He emphasized that 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 Guluzada, Russia, which is opposed to the exports of gas from Azerbaijan and Turkmenistan to Europe, is now seeking to purchase and sell both countries` natural resources on its own.
"I believe there has been powerful pressure exerted by Moscow upon Turkmenistan," Guluzada added.
Unlike the former state adviser, Rustam Mammadov believes that not one, but several other countries are involved.
"I see Iran behind this, Russia behind this, but none of these options [actions] will work," Mammadov concluded.
According to Mammadov, what he called forces muddying the waters are simply trying to deprive Azerbaijan of its profits.
Berdymukhamedov said what he called the disputed part of the basin holds abundant natural resource deposits that Azerbaijan deems as its own.
"Turkmenistan considers as its own the oil and gas fields Osman, Omar as well as Sardar [Azeri, Chirag and Kapaz fields], which are located in the disputed part of the Caspian and are already being tapped by Azerbaijan," Berdymukhamedov said.
He claimed that, according to the legal acts in place since the Soviet times, these fields are within Turkmenistan`s borders and unequivocally belong to the Central Asian state. The Turkmen leader noted that the two countries have held talks on the issue 16 times, but as yet to no avail.
"Such unilateral activity in the Caspian Sea is unacceptable for Turkmenistan," Berdymukhamedov said.
Given the current situation, Berdymukhamedov has instructed his Foreign Minister, Rashid Meredov, to convene lawyers dealing with disputed maritime territories to prepare relevant documents for the international court of arbitration. The president emphasized that Ashgabat will accept any ruling on the matter that is issued by the court.
Berdymukhamedov also issued orders to inform international companies currently operating in the allegedly disputed part of the Caspian that, if the court rules to recognize the energy fields in question as fully or partly belonging to Turkmenistan, Ashgabat will demand that these companies reimburse Turkmenistan for any losses.
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, referred to as Sardar by the Turkmen side, was discovered by Azerbaijani oil workers and holds an estimated 150 million barrels of oil. During the Soviet era, the field was considered "intermediate" due to its being located on the medium 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.
Iran supports equal division in which each coastal state is to receive 20% of the sea.
Rustam Mammadov, the head of the Caspian-Partnership for the Future International Movement public union, says Ashgabat`s intent to conduct a scrutiny regarding the Kapaz field is legally unsubstantiated. According to him, there is no prospect for reviewing the case at the court of arbitration, as such hearings would require both countries to file lawsuits and this court does not consider unilateral claims.
"Turkmenistan is simply trying to take possession of the field, which was discovered by Azerbaijani oilworkers during the Soviet times and where Azerbaijan has injected considerable investments."
The analyst noted that Turkmenistan is seeking to take over not only Kapaz, but also the Azeri and Chirag fields, by delineating the maritime borders in its own way, without negotiating the Caspian status.
"If Turkmenistan were indeed right, it would behave differently," said Mammadov. "The truth is not on their side, and the method they are using has no legal basis whatsoever. On the other hand, Turkmenistan`s claims are not being accepted by any international oil company. This [Ashgabat`s actions] is merely of propaganda nature."
Political analyst Rasim Musabayov said bilateral talks were the best way to resolve the differences between Azerbaijan and Turkmenistan. But, if discussions fail to produce fruit, he believes settling the case in court is a decent option as well. "For this to be possible, however, the sides, having conducted talks, are required to file mutual suits so that the court would review the case upon [their] agreement."
Musabayov added it was unlikely that the litigation would reveal any premise for a dispute between Baku and Ashgabat over the Azeri and Chirag fields.
The analyst said, however, that the court might make a decision on the Kapaz field, i.e. its ruling might reflect the way the medium line in the Caspian should be drawn most fairly. He said settling the case in court could, in fact, benefit both sides and resolve the long-standing discrepancies between the two countries.
Also, Musabayov said Azerbaijan and Turkmenistan could join effort in countering Iran`s claims on the Caspian, as these allegations target not only Azerbaijan but also the Turkmen section of the basin.
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 Azeri-Turkmen relations, and, for some time, it appeared as if the dispute between the two countries had come to an end.
Azerbaijani former state adviser, political analyst Vafa Guluzada believes Russia has a hand in the dispute. He emphasized that 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 Guluzada, Russia, which is opposed to the exports of gas from Azerbaijan and Turkmenistan to Europe, is now seeking to purchase and sell both countries` natural resources on its own.
"I believe there has been powerful pressure exerted by Moscow upon Turkmenistan," Guluzada added.
Unlike the former state adviser, Rustam Mammadov believes that not one, but several other countries are involved.
"I see Iran behind this, Russia behind this, but none of these options [actions] will work," Mammadov concluded.
According to Mammadov, what he called forces muddying the waters are simply trying to deprive Azerbaijan of its profits.
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