Turkmenistan turned Kapaz field into tool of defense from west

• Thursday, June 21, 18:23

Baku. Why did Turkmenistan decide to start scientific-research works on then disputable field Kapaz? For this purpose one needs to understand logics of the Turkmenistan government.

Azerbaijan and Turkmenistan have not signed the intergovernmental agreement on the Caspian Sea bottom division yet. The main reason is Kapaz field, which was discovered by the Azerbaijani oilmen at the end of the 1980s. Turkmenistan named this field Serdar after the first President Saparmurad Niyazov.

During the years of independence Turkmenistan officials tried to seize this field several times and in January 2005  Turkmenistan attempted to sign a production sharing agreement (PSA) with Canadian Buried Hill Energy company. However, after Baku's protests the Canadian company has left the Caspian Sea.

In June 2009 the Turkmenistan officials demanded groundless compensations from Baku for development of offshore fields Azeri and Chirag. The contract on these fields was concluded on September 20, 1994 and production on Azeri-Chirag-Guneshli contract area started on November 7, 1997. Ashgabad threatened the Azeri government that it going to apply to the International Economic Court. However, Turkmenistan has no legal right for that, because it has not signed several international conventions.

The situation seems to calm down. Since July 2010 Azerbaijan started transportation of Turkmen oil and by June 1, 2012 total volume of pumping via the Baku-Tbilisi-Ceyhan pipeline already exceeded 4 million tons. In October 2011 Turkmenistan, Azerbaijan and EU started tripartite talks on construction of the trans-Caspian gas pipeline. Six rounds of talks have been held by now. The countries were expected to sign the agreement on construction of the gas pipeline. However, Turkmenistan has slowed down all these processes for an indefinite time.

Judging by all, the Turkmenistan officials realized what construction of the gas pipeline via the Caspian Sea will lead to. First of all, there are political risks for the government (first of all from Iran and Russia), secondly, economic risks (all Caspian basin states are rich in gas and they try to sell their gas at the European markets. Being the first one is worse for a small and unprotected state, than the dividends.) Thirdly, Turkmenistan did not want to commit itself to guard the underwater gas pipeline in its own sector (the Turkmenistani officials have repeatedly requested the representatives of Brussels to do that. The Turkmenistan representative even said that Turkmenistan would like to sell its gas to the buyer on its own ground borders.  At fourth, the Turkmenistan officials understand that PSA should be concluded with the western companies to export gas to Europe. In the future this could lead to liberalization of the market and sooner or later to change of the political and economic model of the country. On the other hand, some foreign geologists say that Kapaz resources are insufficient for Turkmenistan to do everything for them. This means that this is a matter of political plans of the Turkmen officials, rather than economic and national interests (dividends of the trans-Caspian gas pipeline are higher for the Turkmen people).

The best way to avoid these consequences is to close the western window for Turkmenistan, which is Azerbaijan.  

In this situation nobody could forecast successful development of the trans-Caspian gas pipeline project.