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. Last Updated: 07/27/2016

Littoral States Lay Out Caspian Positions

The governments of the Caspian region on Tuesday each set out their own position on how to divide the sea's riches at a Moscow conference, but a final consensus will probably have to wait for an autumn summit.

On Wednesday morning, Prime Minister Mikhail Kasyanov and officials from the Foreign Ministry, the Energy Ministry and the Natural Resources Ministry are expected to put the finishing touches on Russia's position.

They are also expected to finalize a bilateral agreement with neighbor Kazakhstan, which would divide the northern Caspian seabed along a modified median line.

Since the breakup of the Soviet Union, the five littoral states -- Russia, Kazakhstan, Iran, Turkmenistan and Azerbaijan -- have fought each other for possession of the Caspian's oil and gas reserves. With 17 billion to 33 billion barrels of oil reserves, the Caspian oil basin is estimated to be the third largest in the world. The basin also holds 5.1 trillion cubic meters of natural gas reserves.

The conflict became more than just a war of words last July, when an Iranian gunboat forced a BP exploration ship out of disputed waters. The Azeri government gave the BP ship the license to explore the Araz-Alov-Sharg concession, which Iran regards as its own.

The five nations have devised a myriad of ways to divide the Caspian seabed. Azerbaijan, Russia and Kazakhstan have, in principle, agreed on a division that would give them shares extending out from their respective coastlines.

"Today, the Caspian countries' positions on the status of sea coincide like never before," said Khalaf Khalafov, Azeri deputy foreign minister, in remarks reported by Interfax.

Turkmenistan, on the other hand, agrees that the seabed needs to be divided, but the country wants to use a method differing from that proposed by Azerbaijan, Russia and Kazakhstan.

Iran, however, continues to advocate a "condominium" approach to the Caspian, where oil and gas reserves would be developed jointly by all littoral states, said Mekhdi Safari, Iran's envoy to the Caspian Basin. Iran lays claim to 20 percent of the Caspian bed and will not allow other countries to explore in that sector.

"Iran recognizes the sovereignty of the new states and sees the Caspian as an arena for international cooperation," Safari said.

According to bilateral agreements between the Soviet Union and Iran dating back to 1921 and 1940, the two countries jointly share Caspian resources. Although a long-time proponent of the condominium approach, Iran has shown a willingness to agree to division if each government gets 20 percent of the seabed. If Russia gets its way, Iran will be left with 12-13 percent of the Caspian.

Viktor Kaluzhny, Russia's Caspian envoy, said at the conference that Iran is gradually changing its position.

"Iran is looking for a compromise," Kaluzhny said.

While officials from Caspian governments spoke of high hopes and an imminent agreement, the United States expressed its disappointment at the lack of progress made.

"Successful development of the Caspian basin is not something we can consider inevitable," said Steven Mann, the U.S. envoy on Caspian energy issues.

He said corruption had hindered growth in the five Caspian states and a lack of legal guarantees had scared away investors, The Associated Press reported.

Transportation issues, however, are slowly being resolved. Mann said that both an oil pipeline from Baku to the Turkish port of Ceyhan and the Shah Deniz gas pipeline from Azerbaijan to Turkey should be operational by 2005.