Azeris Baffled by Turkmen Legal Threat

Court action over maritime boundary could harm mutually beneficial gas pipeline project.

Azeris Baffled by Turkmen Legal Threat

Court action over maritime boundary could harm mutually beneficial gas pipeline project.

Tuesday, 22 September, 2009
Political experts are baffled by a Turkmen announcement that it will take Azerbaijan to court over their maritime boundary, saying the decision does not seem to make political, business or legal sense.

European plans to diversify gas supply, by building the Nabucco pipeline from the Caspian region to Austria, could be under threat from the unexpected Turkmen claim, which would disrupt development of Caspian oil and gas fields and interrupts two years of improving relations between Baku and Ashgabat.

Turkmen president Gurbanguly Berdymuhammedov said just a month ago his country was keen to join the Nabucco project, but the legal challenge could harm the route by blocking production from fields on or near the Azerbaijan-Turkmenistan maritime border.

The first sign of trouble began on July 24 when Berdymuhammedov announced he would be appealing to an international arbitration court over ownership of two fields currently being exploited by a British Petroleum-led Azerbaijani consortium, and a third field which is not being worked at present.

The appeal goes to the heart of a problem that has plagued the five Caspian states since the end of the Soviet Union, which is that they have failed to agree on how the sea should be divided up. Should it be considered a lake – and exploited equally – or a sea – and exploited in segments that correspond to the coastlines of the states that border it?

Azerbaijan and Turkmenistan, which face each other across the landlocked body of water, cannot even agree on where the halfway point is between them, which means they cannot agree on which segments belong to which state.

“The delimitation of the floor and resources of the Caspian between Turkmenistan and Azerbaijan must be conducted without consideration of the influence of the Apsheron peninsula and the Chilov island, which are ‘special circumstances’ under international maritime law and, correspondingly, must not be taken into account when resolving the median line,” said the Turkmen foreign ministry on August 4.

Azerbaijan responded uncompromisingly.

“We are ready to defend the interests of Azerbaijan with all acceptable methods, including diplomatically,” said Khalaf Khalafov, a deputy foreign minister. “As for legal procedures, then in a situation when they are required, we are prepared to examine them.”

He said, however, that Azerbaijan was confident that it had a claim to the fields in question. “We have conducted all necessary investigations for the justification of our position and our rights,” he said.

Observers were baffled by Turkmenistan’s actions. Ashgabat had appeared to be becoming friendlier towards Baku since the death of unorthodox president-for-life Saparmurat Niazov in 2006. Berdymuhammedov even visited Baku in May last year and opened an embassy there, and the two countries had begun to discuss jointly exploiting the field that lies closest to their maritime boundary.

The new spat may be connected to the development of the Nabucco pipeline, which would allow European countries to diversify away from their current reliance on Russia for gas supplies. The prime ministers of Turkey, Romania, Bulgaria, Hungary and Austria signed an agreement on the pipeline last month, meaning it is closer to realisation.

That may have given Turkmenistan more confidence in its ability to wring concessions from its potential customers, since the pipeline would probably need Turkmen gas to be shipped under the Caspian to achieve the volumes it needs.

“It would be hard to realise Nabucco without Turkmenistan. Without resolving the argument about the status of the Caspian is it not possible to build the Transcaspian Pipeline, which would take Turkmen gas to the European market avoiding Russia,” said Boyukaga Agayev, an expert on the South Caucasus.

But since building Nabucco would apparently be in Turkmenistan’s interests, other analysts have speculated that perhaps it is being pressured by either Iran or Russia to slow the project down. Or perhaps it is deliberately slowing the project so as to win a better price for its gas.

“You can’t rule out that this is Ashgabat acting unilaterally. Turkmenistan raised the question of sending energy resources to Europe and now is opening a new field for manoeuvres when it comes to negotiations over the cost of gas, and the volumes being despatches,” Agayev said.

But other experts doubted the Turkmen decision to take the case to the arbitration court would resolve anything, since Azerbaijan would have to agree to be bound by its decision. It was not clear which arbitration court Berdimukhamedov was referring to – there are several, most run by chambers of commerce – but whichever one it was, it will not have any enforcement mechanism.

“There is only one court in the world that resolves territorial disputes between states, and this is the United Nations’ International Court of Justice. That means Turkmenistan has to appeal to that institution. However, neither Azerbaijan nor Turkmenistan accept the court’s jurisdiction. And even if Ashgabat unilaterally recognised the jurisdiction of this institution, the case can’t be examined without Azerbaijan’s approval,” said Rustam Mammadov, a political analyst who specialises in Caspian issues.

Kenan Guluzade is editor-in-chief of the web site and an expert from the South Caucasus think-tank.
Support our journalists