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Tuesday, 23 April, 2002, 17:38 GMT 18:38 UK
Caution ahead of Caspian summit
Oil rigs in Baku harbour, Azerbaijan
It is not known how much oil lies beneath the sea
Media reports from the five Caspian littoral states - Russia, Iran, Azerbaijan, Kazakhstan and Turkmenistan - have played down hopes of a final settlement on how to divide the sea at a presidential summit in the Turkmen capital Asgabat.

Russia, Azerbaijan and Kazakhstan want the Caspian sea bed divided along a modified mid-line, with each state free to develop the mineral resources in their sector while cooperating on use of the actual water basin.

Iran meanwhile, wants the seabed divided equally among the five, while Turkmenistan's shifting position seems to have moved towards dividing both the sea bed and water basin into sectors, with a 20-mile zone in the middle reserved for free navigation.

The host of the two-day summit, Turkmen President Saparmyrat Nyyazow, has declared that all participants have agreed in principle to his proposal for a Caspian "zone of peace".

One should not be too optimistic, because the status of the sea can hardly be resolved immediately.

Turkmen TV

According to state-run Turkmen TV, he said the five states would develop fishing and navigation rights with due regard for ecology and one another's interests.

But this did not address the main issue of what lies beneath the sea bed - oil - the television commentary was quick to point out.

And, it added: "one should not be too optimistic, because the status of the sea can hardly be resolved immediately. Each littoral state has its own view of the division of the sea and method of delimitation."

Bilateral deals

Mikhail Kozyrev, writing in the Russian newspaper Vedomosti on Tuesday, said "it is unlikely that the five presidents, who are meeting together for the first time, will perform a miracle".

Russian Deputy Foreign Minister Viktor Kalyuzhnyy told the paper that the final document is "90% ready" and is based on the Russo-Azeri-Kazakh position, but refused to specify the prospects of agreement on the remaining 10%.

Agreement can only come after a lengthy process.

Iranian spokesman Hamid Reza Asefi

Russian government sources have also told Vedomosti that Russia is basically interested in striking bilateral deals with Kazakhstan and Azerbaijan, which they have said are already well-advanced.

A representative of the Russian oil company NIKoil said that foreign investors would reserve their judgment until a final-status agreement is reached.

Iran stands firm

Iranian Foreign Minister spokesman Hamid Reza Asefi said on Monday that Iran was sticking to its position of carving up the sea equally, and that agreement could only come after a "lengthy process".

Iranian commentators have been broadly united in their opposition to any compromise on this stance.
Iranian President Mohammad Khatami
Khatami: sea must be divided up equally

Interviewed in the newspaper Nourooz, Hoseyn Nasiri, an economic adviser to Iranian President Mohammad Khatami, has said some of the states will try to isolate Iran and draw the United States into the Caspian as a counter-balance.

Putting the summit in the context of Khatami's broader tour of Central Asian states, which follows the Asgabat summit, he said Iran could not abandon its stance on the Caspian and so should also use the meeting to develop bilateral oil and trade ties with its neighbours.

"The importance of Khatami's visit is in the elimination of misunderstandings," he said.

Kazakh vulnerability

Russia prefers to develop the structures jointly, albeit with a predominant Russian share, and to have the oil exported through Russia. Continuing instability in Afghanistan is another block to the Kazakh plan.

US role in the Kazakh interest as regards national security.

Kazakh Foreign Minister Kasymzhomart Tokayev

Interfax-Kazakhstan news agency said on Monday that Kazakh Foreign Minister Kasymzhomart Tokayev had told parliament that US commercial involvement in the Caspian was also "in the Kazakh interest as regards national security".

Dmitriy Glumskov, writing in the Moscow magazine Ekspert on 15 April, saw the Kazakh position as vulnerable.

He made the point that speculation about the amount of oil under the Caspian was based on old Soviet statistics, and that actual development was at a very early stage.

The Kazakh budget strategy is based on high volume of production and a high price for oil, so the state-run Kasmunaygaz firm is determined to press ahead as soon as possible with developing the Kazakh claim to the Caspian.

It needs large amounts of foreign investment to finance this, which will only be available if the status of the sea is settled.

One way forward would be joint development with Russia, as planned for a meeting in mid-May, but disputes remain here also over the division between Russia and Kazakhstan.

Azeri isolation

A commentator in the Azerbaijani newspaper Ekho on 17 April, said there were unofficial indications that Iran might be willing to accept a 14.5% share of the sea in order to freeze the United States out.

He also proposed that the summit might agree to differ, allowing Russia, Azerbaijan and Kazakhstan to proceed with their bilateral deals while Iran reached other arrangements with its neighbours.

Azerbaijan could be alone to face the irrepressible claims of Iran and Turkmenistan.

Ekho newspaper comment

The worst scenario for Azerbaijan would be a north-south division of the sea, as was mooted by Kalyuzhnyy in Izvestiya newspaper on 6 March, as this would allow Russia and Kazakhstan to press on with their agreement and leave Azerbaijan "alone to face the irrepressible claims of Iran and Turkmenistan".

Iran and Turkmenistan dispute two oilfields with Azerbaijan, so this prospect would mean isolation for Azerbaijan.

BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.

The BBC's Catherine Davis
"Few here expect this summit to produce any significant breakthrough"
See also:

23 Apr 02 | Asia-Pacific
Caspian summit makes little progress
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