Just over a week ago, the presidents of Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan met in the Kazakh city of Aqtau and signed the Convention on the legal status of the Caspian Sea. Few expected this to happen so soon.
This agreement, perceived as the fact of reaching consensus on this important matter, would seemingly end any disputes about use of the Caspian and its resources. Such expectations are not quite met. There have been many disputes related to this issue in Iran. According to some observers in Tehran, failure to inform the public caused the commotion about the convention. Well, that is what it is. The agreement has been creating a lot of debates about the share of Iran among Iranians. That’s understandable.
Having the second shortest shoreline (724 km) among the five Caspian nations, Iran has a lot to lose if the basin is divided on the coastline principle.
From this point of view, Kazakhstan, having the longest shoreline (2320 km) among the five countries, proves to be in a more favorable position, than the other four countries of Caspian region, to take advantage of opportunities.
Turkmenistan has about 1200 kilometers of shoreline along the Caspian Sea. And it is said to have the smallest share of oil reserves in the Caspian Sea compared to other four countries. As one of the largest producers of hydrocarbons, Turkmenistan relies mainly on its onshore gas fields. What matters more to this country is that the said convention offers the opportunity to facilitate shipping water transport and carriage along new routes. According to the estimates of the British firm Gaffney, Cline and Associates, the three most significant gas fields in the country, Yoloten, Osman, and Yashlar, hold between 4.25 and 15.5 trillion cubic meters of natural gas. They are all part of the Murghab Basin, and are far away from the Caspian Sea.
With Azerbaijan which has 955 kilometers of shoreline along the Caspian Sea and heavily relies on the development of its offshore oil fields and gas deposits, it’s a different story. According to the 2018 BP Statistical Review of World Energy, the country holds 0.4 percent of the world’s total oil reserves, and it is currently producing about 800,000 barrels of oil (more than two times less compared to Kazakhstan) and around 17.5 billion cubic meters of gas (more than three times less compared to Kazakhstan) from several fields, including Ashrafi, Azeri, Azeri–Chirag–Gunashli and Gunashli. The offshore platforms represent the bulk of hydrocarbon production in Azerbaijan.
As for Russia’s attitude to the Caspian Sea’s hydrocarbon potential, it is very similar to that of Turkmenistan. The Russian Federation, with 695 km of the Caspian shoreline, doesn’t seem to be very much interested in extracting oil and gas from its Caspian resources anytime soon, since the country, just like Turkmenistan, has a number of the world’s largest oil fields and gas deposits in its non-Caspian regions.
The same observation could potentially be made about Iran’s attitude to the Caspian Sea’s hydrocarbon potential, yet the reality is quite different. Tehran seems to have taken great interest in the underwater production of hydrocarbons. Since the beginning of this century, Iran had discovered a number of offshore petroleum and gas deposits in the southern part of the Caspian Sea. But that’s as far as it went. Despite the above mentioned discoveries, Iran is not currently recovering any oil or gas from its Caspian resources. Having gigantic easily-recoverable oil and gas reserves in the Persian Gulf and southern regions, the country seems to feel no need to tap into its costly Caspian reserves. But Iran does not intend to remain complacent when it comes to the development of the legal status of the Caspian Sea. That is particularly true now when Azerbaijan claims rights to the seabed and the subsoil of the submarine areas that Iran views as its own ones.
This is especially the case of a gas field discovered by Iran in 2002 and named Sardar-e Jangal. It contains total proven reserve of around 1.414 trillion cubic meter of natural gas. Following the precedent based on a number of agreements between Russia and Kazakhstan with regard to dividing the Caspian basin by a line equidistant from the five coastlines, Azerbaijan contends that Sardar-e-Jangal should be a shared field. It is therefore not surprising that there has been concern across the Iranian political spectrum about the convention – or, to be more accurate – the share of Iran. The predominant view in the public opinion is that although the Caspian Sea Treaty recently signed in Aqtau does not define the share of each of the littoral states, Tehran needs to be very vigilant and alert and quite wise in outlining the steps for a favorable decision on this issue.
In a televised interview Iranian Foreign Minister Mohammad Javad Zarif said: «Iran’s territorial interests have been safeguarded in the Convention, because, the Leadership and President are very sensitive to the country’s territorial interests».
At the same time, he pointed out the futility of a notion that Iran’s share of the Caspian Sea is 50 percent. «Islamic Republic of Iran had already claimed that the Caspian Sea has been shared between the Caspian Sea littoral states, so that the idea of a 50 percent share of Iran from the Caspian Sea is wrong», Mr. Zarif noted.
He in this way responded to Mahmud Sadeghi, a member of the Majlis and representative of Tehran, who had via Twitter asked the following: «Is it true that Iran’s 50 percent share fell to 11 percent?».
Mr. Zarif , for his part, argued that those percentage figures (50 percent and 11 percent) were not relevant. According to him, Iran should share about 20 percent of the Caspian Sea’s resources. Not more, but not less either. «The illusory 11 percent line is no longer valid. Of course, some tried to revive this illusory historical procedure that had been forcibly imposed on Iran during the former regime, but the Islamic republic rejected it», Iranian Foreign Minister said during his televised interview.
One thing is clear now: Iran’s share of the sea’s resources will be concretely defined through negotiations with its immediate neighbors, Azerbaijan and Turkmenistan. And this has no bearing on how the Kazakhstan conducts its business in the Caspian Sea and its coastal zone. However, diplomatic disagreements between the Iranian and Kazakhstani sides over the the Caspian issue continue to occur.
Last Friday, Astana firmly rejected a call by Iranian President Hassan Rouhani to continue negotiations on the legal status of the Caspian Sea, insisting that the agreement in principle reached last weekend at the 5th Caspian Summit is definitive.
«The convention stipulates that the Caspian seabed is delimited by the coastal states’ agreement on the basis of the norms and principles of international law. That means, the agreement in principle prevails», ambassador-at-large of the Ministry of Foreign Affairs of the Republic of Kazakhstan Zulfiya Amanzholova said at a press conference in the Kazakh capital.
According to her, the agreements which had been concluded by Azerbaijan, Kazakhstan, Russia, Turkmenistan and Iran do not allow for changes to the framework for demarcating the seabed.
«These principles will be agreed upon by those who have not yet demarcated their sections of the seabed. This will be accepted by the convention’s other participants», she said. As the saying goes, once words are marked down on paper, they cannot be taken back.
Zulfiya Amanzholova also responded to Iranian President Hassan Rouhani’s observation that the convention had yet to be ratified by the parliaments of the signatory countries.
«We intend to ratify the convention in the very near future. The Kazakh Foreign Ministry will begin to apply the internal procedures immediately», she said.
«We have certain deadlines and procedures, but I do not think the resolution of this issue will be delayed. It makes no sense to take a long time to reach an agreement to then delay ratification», the diplomat noted.
The text of the convention is not yet publicly available. This leaves plenty of room for various kind of loose talk. Zulfiya Amanzholova said the text of the convention would be published after the ratification. It relates to the procedures established by law. What we know so far is that this multilateral instrument endorses the principles that are to govern the activities of the signatory nations on the Caspian Sea, as well as issues related to the demarcation of territorial waters and seabed, navigation, environmental conservation and security.