Turkey Plays Big Brother to Azerbaijan in Opening Skirmishes Over Control of Caspian Resources

By Jon Gorvett

It sounds like a riddle, but the question could have a far from funny answer. “When is a sea not a sea?” is the conundrum that has been occupying the minds of diplomats and generals from countries around the Caspian ever since the Soviet Union collapsed. Finally, in August, the repercussions of the various littoral states’ views on the answer threatened to go critical. In the middle of all this was Turkey, and its age-old rivalry with neighboring Iran.

The substance of the dispute, naturally enough, is very non-semantic. In Soviet days, the Caspian Sea was divided territorially along a national boundary between the Soviet Union and Iran. However, with the independence of Azerbaijan, Turkmenistan and Kazakhstan—all with Caspian coastlines—carving up the waters and what lies beneath them has turned into a so-far insoluble problem. If the Caspian is a sea, the Law of the Sea Convention would apply, establishing full maritime boundaries for the five littoral states bordering the Caspian according to an equidistant division of the sea—and its undersea resources—into national sectors.

If the Caspian is a lake, however, the rules change and the Caspian and its resources would have to be developed jointly—a division referred to as the “condominium approach.”

What gives this legalistic-sounding dispute its edge of course, is that the undersea—or “underlake”—resources could involve up to 250 billion barrels of oil and equally colossal amounts of natural gas. How much sea floor each state gets, therefore, is extremely significant, as is what kind of sea floor, with the areas that look to be holding the most energy reserves naturally being the most contested.

The five littoral states all have been trying to develop these resources in association with both foreign and domestic oil and gas companies. In addition, many out-of-area national governments—including the U.S. and Turkey—have seen it as in their interests to develop these resources in specific ways with specific nations. Central to Washington and Ankara is the Baku-Tiblisi-Ceyhan oil pipeline. This is projected to bring Azeri Caspian oil ashore at the Azeri capital of Baku, ship it northwest (going around Armenia) to the Georgian capital of Tiblisi, then bring it all the way south again to Turkey’s Mediterranean port of Ceyhan. This, U.S. and Turkish strategists hope, will serve to cement the three transit countries together, decrease Turkey’s current dependence on Russia for energy supplies, and do all this while keeping the Iranians—or the Russians—from dominating the region.

In order to satisfy political criteria, the economics largely have been forgotten.

The problem is that, in order to satisfy all these political criteria, the economics largely have been forgotten. The result is a projected pipeline that would most likely be prohibitively expensive, unless oil prices rocketed and stayed there, or unless the transit countries—or possibly the U.S.—stumped up a subsidy. With Georgia and Azerbaijan both economic black holes and Turkey in the midst of a financial crisis, it seems unlikely that the money will be generated locally.

In addition, the route has been in difficulties because the Azerbaijan International Operating Company (AIOC)—the consortium of oil corporations contracted to develop Azeri Caspian energy resources—is split on the issue. Led by BP-Amoco-ARCO, it also contains Russia’s Lukoil and Exxon-Mobil, both of which have extensive interests in rival pipelines. In addition, a recent huge oil discovery (25 billion to 40 billion barrels) at Kazakhstan’s Kashagan field, which is being developed by the French Total-Fina-Elf, and the successful completion of the Caspian Pipeline Consortium (CPC) route from the Kazakh Tengiz field to the Russian Black Sea port of Novorossisk have upstaged Baku-Tiblisi-Ceyhan dramatically.

Christophe de Margerie, head of Total-Fina-Elf’s upstream operations, also suggested recently that the Kashagan oil likely would go to Western markets via Iran. When asked about U.S. sanctions on Tehran, he replied, “Total was back in Iran in 1995 and did not fear punishment from Washington. We don’t intend to be provocative, but we will continue to rely on European and international laws.”

Iranian Maneuvers

With this background of international competition, then—and the apparent flagging of Turkish and U.S. hopes—this summer saw the first clear skirmish on the issue of physical control of Caspian resources.

On July 23, two Iranian air force planes overflew BP-Amoco-ARCO ships that were exploring the Caspian’s Araz-Alov-Sharg area, which is claimed by Azerbaijan. Iran maintains that this region—known to Tehran as the Alborz field—belongs within its sector. Later that evening, an Iranian warship entered what Baku considers Azeri territorial waters and threatened to fire on an Azeri oil exploration ship unless it departed the region. Iranian aircraft then reportedly violated Azeri airspace on three occasions.

These actions led Baku to summon the Iranian ambassador the following day and lodge a formal protest with Tehran. Iran’s Expediency Council secretary and former Revolutionary Guard chief, Mohsen Rezai, then “recalled” that “Azerbaijan belonged to Iran 150 years ago.”

Rezai’s remark set off a chorus of alarm bells in Ankara. Turkey has long been a close ally of Azerbaijan, with which it shares strong ethnic ties. And, with the Baku-Tiblisi-Ceyhan pipeline to consider, it has been closer than ever in recent years. Add in Turkey’s long-standing rivalry with Iran for regional influence, and it was not surprising that Ankara responded rapidly to Rezai’s implied threat. On Aug. 26 the chief of the politically powerful Turkish General Staff, Huseyin Kivrikoglu, arrived in Baku on an official visit, accompanied by 10 Turkish F-16 fighter jets, an action the Azeri newspaper Zerkalo suggested was “a warning” to Azerbaijan’s enemies.

It was certainly interpreted as such by Tehran, which demanded an official explanation from Turkey. Ankara responded that the visit was merely to celebrate the anniversary of Azerbaijan’s independence, though this new-found sovereignty seemed to be rather questionable when, upon Kivrikoglu’s arrival, Azeri President Haidar Aliyev announced that Turkey and Azerbaijan were “two countries, one nation.”

The incident quickly demonstrated how sensitive the Caspian is. The other big local player, of course, is Russia, which recently announced it no longer was keeping to the Soviet Union-era division of the sea between itself and Iran, calling forth a charge of “duplicity” from Tehran radio in July. Iran also points to the fact that, while elsewhere the once mighty Russian military has been contracting—if not falling apart—Moscow’s Caspian Sea Naval Flotilla has been expanding. This is certainly a worrisome point, as the sea in general is becoming rapidly more militarized. Turkmenistan recently also has swapped some of its gas rights for Russian patrol boats.

A summit of littoral states called for October in the Turkmen capital of Ashgabad was subsequently canceled, the issue of the Caspian’s status being the main subject for discussion.

Even though Turkey has no Caspian seashore, Ankara’s role in this dispute may prove to be a crucial one. It has long been the expressed aim of many in Ankara for the country to extend its influence eastward to the “Turkic states” of Central Asia, with an implied right to lead the millions of ethnic Turks who live in that vast geographical area. While Turkey may be assuming far too much, clearly the Azeris found it of considerable benefit to be able to call on their Turkic big brother. With the issue still far from being resolved, however, and all sides demonstrating their ability to rattle sabers, the Caspian looks set to remain a sea—or lake—of troubles for some time to come.

Jon Gorvett is a free-lance journalist based in Istanbul.