Caspian Sea and its resources

Oxford Analytica's The World Next Week wrote a piece The struggle for the Caspian

The struggle for the Caspian
Despite the shows of bonhomie between the Russian and Iranian presidents and their Azeri, Turkmen and Kazakh counterparts at a meeting a fortnight ago, a dispute is smouldering over the legal status of the Caspian Sea. Without a pact on sharing resources or clear demarcation of the sea's boundaries, tensions will continue to grow. Much is at stake. The leaders of the littoral states know that an estimated 50 billion barrels of oil and reservoirs containing 230 trillion cubic feet of gas lie beneath the seabed. The waters are also the world's main source of caviar. Access to the Volga River is also particularly important for the otherwise landlocked states of Azerbaijan, Kazakhstan and Turkmenistan. Demarcation of the Caspian's boundaries is problematic, for it is a geographical sui generis: technically it is not a true sea. That puts it beyond the jurisdiction of the UN Convention on the Law of the Sea. Russia champions the idea of joint use of the Caspian water surface for general use, while accepting the division of the seabed into national sectors. In other words, the seabed and the water surface should be considered as objects with separate sets of regulations. Moscow likes this plan because the Russian sector of the sea does not have much fish. It will also have more room to manoeuvre its Caspian armada of around 100 navy ships. Kazakhstan, Turkmenistan and Azerbaijan agree. Each littoral state would be able to seek oil and gas resources in its sector without consulting one another and fish pretty much anywhere they choose. Azerbaijan and Kazakhstan have even started extracting hydrocarbons and signed bilateral accords with Russia. But Iran wants to divide the Caspian into five equal portions and does not recognise any existing bilateral seabed demarcation agreements. Russia's method used to divide the Caspian would give Iran between 9% and 14% of the seabed. Yet Tehran and Moscow have not yet come to blows over their differing positions, mainly because they have found common ground elsewhere. Russia has proposed the creation of Casfor, a five-party navy force that will counter terrorism, arms and drugs trafficking threats on the Caspian. Casfor has found support only in Tehran, primarily because it aims to exclude the United States from the region. But the lack of agreement elsewhere has led to various disputes between Azerbaijan and Iran, and Azerbaijan and Turkmenistan, regarding the ownership of oil fields. In 2001, the escalation of tensions between Azerbaijan and Iran almost led to a military standoff. The issue looks set to become increasingly politicised and internationalised, as the nuclear non-proliferation dispute with Iran unravels, and energy exports to international markets from Azerbaijan and Kazakhstan continue to rise. The fact that Moscow has no allies, apart from Tehran, on the issue of dividing the Caspian Sea surface may partly explain its continuing moderate stance on Tehran's nuclear ambitions. The next Caspian summit will be hosted by Azerbaijan in October 2008, but progress before then looks unlikely.