Glance from Russia: Special Caspian sea legal status needed

The Russian authorities must solve the accumulated problems related to the Caspian Sea legal status, the experts believe. Although Russian Premier Medvedev’s trip to Astrakhan on October 3 to familiarize with the unique production technologies did not give answers to the questions, there is hope that part of the problems will be solved, Moscow believes.

Russian Minister of Natural Resource Sergei Donskoi said that the Caspian oil and gas resources total over 1 billion tons of conditional fuel. The region has been geologically studied.

Meanwhile, there are many problems here, said experts polled by Russian Nezavisimaya Gazeta.

“The hydrocarbon potential of the Caspian Seas has been proved. In particular, LUKoil has discovered several big fields and has been extracting oil on  Korchagin field, said Gregory Birg, co-Director of analytical department of Invest café agency. The main issues, which must be solved, are related to the access to the Caspian Sea. It is important to determine the status of the Caspian Sea and divide the sections between the countries, which have an access to it. This will allow implementing the projects for transportation of hydrocarbons via its territory.”

He said the agreements between Turkmenistan and China partially solve the problem of the market for the Central Asian gas, but this does not mean that the tendency towards diversification of the gas suppliers will stop. Gas extracted by Azerbaijan on the Caspian shelf will be transported to Europe and it is planned to invest significant amount of funds into construction and development of the gas transport infrastructure. “Turkmenistan gas could be delivered to Europe via these channels, if construction of the trans-Caspian gas pipeline is completed,” Birg said. 

Tamara Kasyanova, senior Vice President of the Russian Club of Financial Directors, reminded that a unique location of the Caspian Sea makes it necessary to determine the legal status of the Caspian Sea.

“Caspian Sea does not have a natural outlet to the World Ocean and the international maritime law, in  particular the UN Convention of 1982, is not applied to it. At present the legal regulation is based on the agreements signed between the Soviet Union and Iran in 1921 and 1940 and also several other agreements, including the agreement between Russia and Kazakhstan on delimitation of the bottom of the northern part of the Caspian Sea to execute the sovereign rights of use of bowels earth (signed on July 6, 1998 and the protocol signed on May 13, 2002); the agreement between Russia and Azerbaijan on delimitation of adjacent sections of the northern part of the Caspian Sea (of September 23, 2002) and the agreement between Russia, Azerbaijan and Kazakhstan on the point of juncture of the delimitation of the adjacent sections of the Caspian Sea bottom (of May 14, 2003). 

The talks between the Caspian Sea basin states hinder the issue of the principle of division: Kazakhstan, Azerbaijan and Turkmenistan offer to take the medium line as the basis, while Iran insists on providing one fifth to each state. The oil and gas transportation is a separate issue. Since 2001 oil from several fields is being transported via the pipeline, which connects the Kazakhstan Tengiz field with Novorossiysk. However, this is not enough, because a pipeline network is needed.-0—