Today we associate many of the world’s conflict flashpoints with offshore oil and gas exploration zones. Hydrocarbon reserves have heightened tensions in far flung locations including the Falkland Islands, the Eastern Mediterranean, Sea of Japan, and reefs off the Philippines. Though it has received far less global attention, the Caspian Sea should tragically be added to that list. In recent months, a disputed oil field discovered in the waters between Azerbaijan and Turkmenistan has resulted in increased tensions and another indicator that Turkmenistan, long a country that has sought neutrality in global affairs, is increasingly asserting itself in international politics.
The latest round of the Azeri-Turkmen crisis started this summer. On June 20th, Turkmenistan issued a vague statement, asserting Azerbaijan’s State Border Service took unjust measures against a “scientific” vessel. Azerbaijan’s responded by claiming that a seismic vessel had been carrying out unlawful explorations in the area and was acting contrary to a previous agreement.
In 2008, following similar incident, the two states reach an agreement that was supposed to halt all exploration until the status of the field was agreed upon. In September, Turkmenistan upped the ante when it staged its first combined arms war game in Turkmenistan history. The wargame simulated a hostile power's seizure of an oil tanker on the high seas followed by a mock raid on a major oil refinery. Military units participating in the drill were color coded blue or green to represent opposing forces. By coincidence or design, green is the traditional color worn by the Turkmen sports teams, whereas blue is the color of choice of the Azeri national football team. Turkmen President Berdymukhamedov personally watched the maneuvers which included artillery, air force, infantry, air defense, elite units, and warships. In the days following the maneuvers, Turkmenistan announced President Berdymukhamedov's personal visit to Armenia. Azerbaijan and Armenia fought a brutal war in the 1990s, and the two countries remained locked in a brutal cold war over the Armenian occupation of the Nargano-Karbakh region in Azerbaijan.
Yet just weeks before these maneuvers Turkmenistan’s Ambassador to Baku, Toyli Komekov, had struck a conciliatory tone in his comments during a private meeting of the Azerbaijan Diplomatic Academy. “We respect the opinion of all other littoral states on the basis of international law. For us [The Caspian Sea] is a sea of unity."
Ambassador Komekov blamed the dispute in part on the vague international status of the Caspian Sea, which after the end of the Cold War went from having two littoral states to five. Indeed, the Stalinist gerrymandering of the land borders of Central Asia are mirrored in the disputed borders of the Caspian Sea. Today, Iran, Azerbaijan, and Turkmenistan all dispute various oil fields discovered in the Caspian. The oil field at the center of the Azeri-Turkmen dispute is called “Kapaz” in Azeri and “Serdar” in Turkmen. When the field was discovered during the Soviet era, the hope was it would be jointly developed--a plan that the American government also supports.
Turkmenistan energy discoveries have also lead the country to take a greater role in the region. Ambassador Komekov also underscored Turkmenistan’s interest in diversifying the countries to which it exports gas. "We have an interest in providing gas in all directions, including toward the European Union" Toyli Komekov stated in Baku. Indeed the latest flare up in tensions is a setback, especially for the European Union, who would like to see Turkmenistan begin gas exports to Europe through Azerbaijan, therefore by-passing Russia.
At present, Turkmenistan sells its natural gas directly at its borders with China, Russia, and Iran. In 2011, Turkmen gas exports to Russia (10 bcm), to Iran (10 bcm), and to China (14 bcm) were substantial. However, these markets may dry up in coming years. Russia and Iran have some of the world’s largest natural gas reserves and China will likely develop its shale gas potential by the end of the decade.
Ambassador Komekov also drew attention to the fact that Turkmenistan succeeded in signing Gas Sales and Purchase Agreements (GSPA) with energy hungry India and Pakistan as part of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline in May--a move that will transport gas from Turkmenistan to those markets via some 1,700 kilometers of pipeline.
The agreements were hailed as success for a project which has been criticized because it will transverse some of Afghanistan’s most politically volatile regions, including Herat, Helmand, and Kandahar. No GSPA has yet been signed between Turkmenistan and Afghanistan. Yet Turkmenistan can point to a tradition of working with difficult regimes. In 1999, Turkmenistan signed an important energy pipeline deal with Taliban-ruled Afghanistan. However, a Turkman energy analyst familiar with the TAPI project who spoke on condition anonymity is more skeptical about the project. “Of course TAPI is the largest pipeline project in Asia at the moment and has important geopolitical significance. However, I have little hope the appropriate agreements will be signed in the near future. For example Afghanistan’s MOU with Turkmenistan is not a proper business agreement and will not necessarily provide the business framework Turkmenistan hopes for. Additionally, Pakistan will be a transit country for new Indian gas supplies, and Dehli may not want to concede that kind of leverage.” Securing the political agreements that will make TAPI a success will lead to further political prominence for Turkmenistan.
Perhaps Turkmenistan’s growing reserves has added some extra confidence to the regime in international relations. In fact, the BP 2012 Statistical Review noted that Turkmenistan’s proven reserves had grown to 24.3 trillion cubic meters almost doubling the 13.4 trillion cubic meters of proven reserves in previous editions. A substantial portion of Turkmenistan’s gas is located in the South Iolotan field, discovered in 2006. Furthermore, recent international appraisals of Turkmenistan’s South Iolotan natural gas field now rank it second in the world size. The field is now ranked behind only the South Pars/North Field which straddles the maritime border between Qatar and Iran. This is great news for Türkmengaz, already the largest natural gas company in Central Asia and the field’s operator. Such new discoveries suggest that Turkmenistan could produce as much as 40 bcm per annum of natural gas exports to Turkey and Europe. More modest estimates suggest 16 bcm per annum could be exported to the West.
As Qatar has proven, the discovery of vast hydrocarbon resources can thrust a country into the center of global affairs. Turkmenistan’s rising status in global energy geopolitics may cause it to shift in its policy of permanent neutrality adopted following independence. Curiously, the U.S government supports both Turkmenistan’s pipeline projects and joint Azeri-Turkmen development of the disputed field. However, a final agreement on the disputed oil field may be necessary to breathe new life into hopes of a Trans-Caspian pipeline. Still, it appears Turkmenistan’s approach is increasingly assertive, at least in terms of its relationship with its neighbors. Indeed in the past Turkmenistan has not hesitated to close the tap on its neighbors over price disagreements, and it appears increasingly willing to drive a hard bargain. While Turkmenistan’s ambassador to Baku spoke of a “sea of brotherhood”, Turkmenistan is leaving nothing to chance. Following the completion of its war game last month, Turkmenistan reiterated its plan to build a naval base and radar instillation on the Caspian.
Joseph Hammond is a former Cairo correspondent with Radio Free Europe and former editor for a publication focused on the energy sector. He is an alumni of Young Turkey, Young America, and the Atlanti Brueke Young Leader programs, and has completed the energy school of the Azerbaijan Diplomatic Academy.
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Caspian Tensions Reveal Turkmenistan’s Rising Confidence
December 3, 2012
Today we associate many of the world’s conflict flashpoints with offshore oil and gas exploration zones. Hydrocarbon reserves have heightened tensions in far flung locations including the Falkland Islands, the Eastern Mediterranean, Sea of Japan, and reefs off the Philippines. Though it has received far less global attention, the Caspian Sea should tragically be added to that list. In recent months, a disputed oil field discovered in the waters between Azerbaijan and Turkmenistan has resulted in increased tensions and another indicator that Turkmenistan, long a country that has sought neutrality in global affairs, is increasingly asserting itself in international politics.
The latest round of the Azeri-Turkmen crisis started this summer. On June 20th, Turkmenistan issued a vague statement, asserting Azerbaijan’s State Border Service took unjust measures against a “scientific” vessel. Azerbaijan’s responded by claiming that a seismic vessel had been carrying out unlawful explorations in the area and was acting contrary to a previous agreement.
In 2008, following similar incident, the two states reach an agreement that was supposed to halt all exploration until the status of the field was agreed upon. In September, Turkmenistan upped the ante when it staged its first combined arms war game in Turkmenistan history. The wargame simulated a hostile power's seizure of an oil tanker on the high seas followed by a mock raid on a major oil refinery. Military units participating in the drill were color coded blue or green to represent opposing forces. By coincidence or design, green is the traditional color worn by the Turkmen sports teams, whereas blue is the color of choice of the Azeri national football team. Turkmen President Berdymukhamedov personally watched the maneuvers which included artillery, air force, infantry, air defense, elite units, and warships. In the days following the maneuvers, Turkmenistan announced President Berdymukhamedov's personal visit to Armenia. Azerbaijan and Armenia fought a brutal war in the 1990s, and the two countries remained locked in a brutal cold war over the Armenian occupation of the Nargano-Karbakh region in Azerbaijan.
Yet just weeks before these maneuvers Turkmenistan’s Ambassador to Baku, Toyli Komekov, had struck a conciliatory tone in his comments during a private meeting of the Azerbaijan Diplomatic Academy. “We respect the opinion of all other littoral states on the basis of international law. For us [The Caspian Sea] is a sea of unity."
Ambassador Komekov blamed the dispute in part on the vague international status of the Caspian Sea, which after the end of the Cold War went from having two littoral states to five. Indeed, the Stalinist gerrymandering of the land borders of Central Asia are mirrored in the disputed borders of the Caspian Sea. Today, Iran, Azerbaijan, and Turkmenistan all dispute various oil fields discovered in the Caspian. The oil field at the center of the Azeri-Turkmen dispute is called “Kapaz” in Azeri and “Serdar” in Turkmen. When the field was discovered during the Soviet era, the hope was it would be jointly developed--a plan that the American government also supports.
Turkmenistan energy discoveries have also lead the country to take a greater role in the region. Ambassador Komekov also underscored Turkmenistan’s interest in diversifying the countries to which it exports gas. "We have an interest in providing gas in all directions, including toward the European Union" Toyli Komekov stated in Baku. Indeed the latest flare up in tensions is a setback, especially for the European Union, who would like to see Turkmenistan begin gas exports to Europe through Azerbaijan, therefore by-passing Russia.
At present, Turkmenistan sells its natural gas directly at its borders with China, Russia, and Iran. In 2011, Turkmen gas exports to Russia (10 bcm), to Iran (10 bcm), and to China (14 bcm) were substantial. However, these markets may dry up in coming years. Russia and Iran have some of the world’s largest natural gas reserves and China will likely develop its shale gas potential by the end of the decade.
Ambassador Komekov also drew attention to the fact that Turkmenistan succeeded in signing Gas Sales and Purchase Agreements (GSPA) with energy hungry India and Pakistan as part of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline in May--a move that will transport gas from Turkmenistan to those markets via some 1,700 kilometers of pipeline.
The agreements were hailed as success for a project which has been criticized because it will transverse some of Afghanistan’s most politically volatile regions, including Herat, Helmand, and Kandahar. No GSPA has yet been signed between Turkmenistan and Afghanistan. Yet Turkmenistan can point to a tradition of working with difficult regimes. In 1999, Turkmenistan signed an important energy pipeline deal with Taliban-ruled Afghanistan. However, a Turkman energy analyst familiar with the TAPI project who spoke on condition anonymity is more skeptical about the project. “Of course TAPI is the largest pipeline project in Asia at the moment and has important geopolitical significance. However, I have little hope the appropriate agreements will be signed in the near future. For example Afghanistan’s MOU with Turkmenistan is not a proper business agreement and will not necessarily provide the business framework Turkmenistan hopes for. Additionally, Pakistan will be a transit country for new Indian gas supplies, and Dehli may not want to concede that kind of leverage.” Securing the political agreements that will make TAPI a success will lead to further political prominence for Turkmenistan.
Perhaps Turkmenistan’s growing reserves has added some extra confidence to the regime in international relations. In fact, the BP 2012 Statistical Review noted that Turkmenistan’s proven reserves had grown to 24.3 trillion cubic meters almost doubling the 13.4 trillion cubic meters of proven reserves in previous editions. A substantial portion of Turkmenistan’s gas is located in the South Iolotan field, discovered in 2006. Furthermore, recent international appraisals of Turkmenistan’s South Iolotan natural gas field now rank it second in the world size. The field is now ranked behind only the South Pars/North Field which straddles the maritime border between Qatar and Iran. This is great news for Türkmengaz, already the largest natural gas company in Central Asia and the field’s operator. Such new discoveries suggest that Turkmenistan could produce as much as 40 bcm per annum of natural gas exports to Turkey and Europe. More modest estimates suggest 16 bcm per annum could be exported to the West.
As Qatar has proven, the discovery of vast hydrocarbon resources can thrust a country into the center of global affairs. Turkmenistan’s rising status in global energy geopolitics may cause it to shift in its policy of permanent neutrality adopted following independence. Curiously, the U.S government supports both Turkmenistan’s pipeline projects and joint Azeri-Turkmen development of the disputed field. However, a final agreement on the disputed oil field may be necessary to breathe new life into hopes of a Trans-Caspian pipeline. Still, it appears Turkmenistan’s approach is increasingly assertive, at least in terms of its relationship with its neighbors. Indeed in the past Turkmenistan has not hesitated to close the tap on its neighbors over price disagreements, and it appears increasingly willing to drive a hard bargain. While Turkmenistan’s ambassador to Baku spoke of a “sea of brotherhood”, Turkmenistan is leaving nothing to chance. Following the completion of its war game last month, Turkmenistan reiterated its plan to build a naval base and radar instillation on the Caspian.
Joseph Hammond is a former Cairo correspondent with Radio Free Europe and former editor for a publication focused on the energy sector. He is an alumni of Young Turkey, Young America, and the Atlanti Brueke Young Leader programs, and has completed the energy school of the Azerbaijan Diplomatic Academy.
