On 16th of March 2015 the Eurasian Research Institute organized a round table on the topic of “Caspian Energy Security: Issues and Prospects.”

During the round table the speakers invited from Kazakhstan, Turkey, Azerbaijan and Russia presented their presentations regarding various issues concerning the Caspian Sea region. Prof.Dr. Oktay Fırat Tanrısever from the Middle East Technical University, Dr. Stanislav Pritchin from the Institute of Oriental Studies RAS, Dr. Miras Daulenov from the KAZGUU Kazakh Humanities and Law Institute and Azad Garibov from the Center for Strategic Studies under the President of the Republic of Azerbaijan have participated in the round table as invited speakers.

In his opening speech the Institute director, Associate Professor Nevzat Simsek, briefly provided information regarding the Caspian Sea’s legal status, energy resources and transportation routes. Simsek stated that in order to reach the full potential of the Caspian Sea the littoral states need to agree on the legal status of the Caspian Sea. He also pointed out that the Caspian Sea oil and gas producers are trying to diversify their export routes and that it could be handled by an exploitation of the South Gas Corridor, the Trans-Caspian, the Turkish Stream and the TAPI projects. Later on, Simsek mentioned that after China, Turkey has become the second fastest energy demanding country in the world and Turkey is not only a market for energy producers but also an important link of the energy transportation routes due to its geographical location. Adding to that, Simsek emphasized that alongside with being an energy corridor, Turkey exceeds its role and aims to become a leading energy hub and a pricing center in the region.

The monitor of the session, Lidiya Parhomchik, mentioned that economies of the Caspian region countries are dependent upon energy export; therefore, issues related to the sustainable development and the energy security are of concern to the countries in the region.

During his presentation on “The Energy diplomacy of Russia after the Ukrainian crisis” Prof.Dr. Oktay Firat Tanrisever stated that even though crisis had significant negative consequences for the Russian energy sector, this crisis is not about energy, it is about geopolitics. As an example, Tanrisever said that the decision of Saudi Arabia to continue production at the current level cannot be seen separately from this geopolitical crisis. Since Europe has become less reliable, Russia started rethinking its energy policy and made certain changes: in order to diversify its export market Russia has turned more to China and India. In this context, Russia has agreed to export gas to China at a lower price compared to the previous negotiations; moreover, Turkey gets 10% decrease in its gas agreements with Russia. Tanrisever stated that Europe is searching for alternative routes, which increases the importance of the TANAP project. Among his analysis concerning Turkey’s energy policies he expressed that the TANAP project is a more important project comparing with the Turkish Stream project, but when it comes to dealing with the projects, Turkey follows a collaborative policy towards all actors.

Dr. Stanislav Pritchin started his speech by providing information about the legal status of the Caspian Sea: he mentioned that in 1998-2004 years Russia, Azerbaijan and Kazakhstan had agreed on dividing the oil and gas resources in the northern part of the Caspian Sea by using the median modified line. On the topic of the international transport routes he pointed out that the Baku-Tbilisi-Ceyhan project had a drastic effect on the geopolitical balance of the region and that there are other alternative routes such as the Baku-Subsa and the Baku-Tbilisi-Erzurum gas routes. In his comments on the international energy market and projects, he stated that the idea of the United States LNG to change the current position of Russia is too optimistic because compared to the current gas prices LNG technology is expensive and not profitable for the United States. In the continuation of his comments, he touched upon the TANAP project and mentioned that Europe is providing political support only, without providing any financial support. After passing through number of pipelines such as the TransCaspian and the TANAP, the cost of the Turkmen gas will increase due to the transportation costs. In his assessment of the Turkey’s potential to become an energy hub, Pritchin stated that in order for Turkey to become a real hub and a pricing center, Turkey needs to establish multiple connections with Europe and it needs to have an infrastructure to connect these routes to Europe, otherwise, Turkey would not have much room to influence the pricing policies.

Dr. Miras Daulenov looked at the Caspian Sea’s region from the international laws perspective by providing detailed information about the importance of the principles and the mutual interest concepts. Daulenov mentioned that the international law could cover the gaps in the legal status of the Caspian Sea which is not covered by the national laws. Daulenov gave an example of all the Caspian region states agreeing upon using the biological resources within 15 nautical miles from their coasts. Adding to that he stated that littoral states of the Caspian Sea have established an understanding regarding the principles and the mutual interest concepts which positively affected the negotiations regarding the legal status of the Caspian Sea. Further, Daulenov explored the principles and pointed out three of them which are non-interference, a duty of cooperation and an estoppel. Daulenov expressed that with using these international principles countries could reach a consensus on the legal status of the Caspian Sea. Alongside with these principles, he mentioned that according to the article 77 of the UN convention on the law of sea, the legal status could have been determined. However, according to the article the limit is 200 nautical miles, while the whole length of the Caspian Sea is around 200 nautical miles; therefore, it cannot be implemented for the case of the Caspian Sea. At the end, he concluded his speech by stating that without solving all of their problems and disputes countries could not reach an agreement on the legal status of the Caspian Sea.

In his speech, Azad Garibov provided brief information about the Azerbaijanian natural resources, its export capacity and the Azerbaijanian energy strategy. Gabirov stated that the Nabucco project was more of a geopolitical project rather than an economical one, and it was a consumer’s project, purely the EU’s project, but due to the lack of political and financial support from the EU the project has failed. On the other hand, the TANAP project is purely economical and is a producer’s project: it is two times shorter than the Nabucco and is less costly. Gabirov in his presentation pointed out that there are number of patterns which Azerbaijan follows in its energy strategy; one of such patterns is Azerbaijan’s clear view of the West as an optimal choice, since the energy resources in the Caspian Sea are complex and only the Western companies have the technology and the financial capacity to extract these resources. He expressed that a key factor of this strategy is reliability: in order to protect its image and to gain trust of the Western companies Azerbaijan have no intentions of changing the terms of agreements once they are settled. In this context, according to Garibov, the South Europe is more profitable partner compared to the North, and for Azerbaijan, Italy is one of the biggest and the most reliable gas importers. Later on, he mentioned another general pattern in Azerbaijan’s energy strategy: İn case of an occurrence of any problems related to the projects, Azerbaijan will have flexible conditions due to an increase in the regional cooperation and in the number of companies in the oil and gas sector.

At the last part of the round table participants from different universities and institutions discussed various topics with the speakers.